How the DACA Program Impacts the U.S. Economy

On June 18, 2020, the United States Supreme Court upheld a decision to extend the DACA program through which hundreds of thousands of Dreamers across the United States can live and work without the fear of deportation.

Since 2012, the Deferred Action for Childhood Arrivals (DACA) program has shielded many young undocumented immigrants from deportation.  The Department of Homeland Security (DHS) set forth guidelines allowing young people brought to America as children who do not present a risk to public safety or national security and meet other criteria to stay in the country.

The program is good news for our economy as it allows for immigrant talent and skills to contribute to the overall economic health of our country.

How does the DACA program impact the economy? Here are a few key highlights.

Who are the Dreamers?

• According to a 2018 report on the economic impact of the DACA program, there are about 800,000 Dreamers who are currently protected from deportation by the program.
• Around 81 percent were born in Mexico and the remainder of the recipients are from more than 190 countries around the world.
• Nearly 45 percent of the nation’s DACA recipients live in California or Texas and the average age of a DACA recipient is 26.

Now that the life of DACA has been extended, what is the Dreamers’ economic contribution?

Macroeconomic Contribution:

• The DACA program has saved the federal government $60 billion in deportation expenses and could boost economic growth by $280 billion.
• Now that the life of the program has been extended, this could now create in the United States more than $460 billion in economic output over a decade.
• Contributions to critical public programs like Social Security and Medicaid will likely increase significantly.

Tax Contribution:

• More tax revenue for government: DACA-enrolled and -eligible immigrants contribute roughly $2 billion each year in state and local taxes, including personal income, property, sales and excise taxes.
• Dreamers pay, on average, 8.9 percent of their income in state and local taxes, higher than that paid by taxpayers in the top 1 percent.
• DACA-eligible workers contribute $1.4 billion in federal taxes, $2 billion in Social Security taxes, and $470 million in Medicare each year.

Consumer Spending Power:

• About 24 percent of DACA recipients over age 25 have bought their first home.
• In 26 states, DACA-eligible spending power is at least $100 million.

Entrepreneurship:

• More than 5 percent of DACA recipients under age 25 have started a small business.
• Eight percent of Dreamers over 25 years old are entrepreneurs and employing workers.
• Many businesses and jobs are now protected because of the DACA program.

Small-Business Workforce:

• Millions of small firms around the country rely on Dreamers for a qualified, trained and stable workforce.
• Direct savings to employers of Dreamers will be more than $6 billion in worker turnover costs, including hiring and training.

The cost to employers of rescinding DACA would be the equivalent of an estimated 30 major regulations — more than $3 billion in annual costs falling directly on employers.

It is impossible to deny that the DACA program has helped better the lives of immigrants — from better wages, access to educational funding resources, investments and safety. It is also impossible to deny that immigrants contribute to the overall health of the American economy.

During the COVID-19 crisis, we can heave a big sigh of relief to know we have kept DACA recipients who are frontline healthcare workers (29,000+ employed), teachers (15K+ employed) and food-related occupations (142K+ employed) in their roles when we need them the most.

EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor and contributor for several media outlets. He’s a non-profit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.

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