Better with Refugees

Refugees and the Economy: Myths and Facts

AUGUST: Afghanistan

Myth: Refugees and immigrants harm America’s economy, as they are a drain on our limited resources.

Fact: Immigrants add to the U.S. Gross Domestic Product and tax revenue. In 2016, immigrants added $2 trillion to GDP, and generated $329 billion in local, state, and federal taxes annually. Experts project that future cuts to the U.S. legal immigration system would have devastating effects on the economy, including a 2% decrease in the U.S. GDP by 2040, a 12.5% decrease in U.S. economic growth, and 4.6 million fewer jobs.

With the U.S. birth rate decreasing and at a historic low, the U.S. needs refugees and immigrants to stay competitive, create economic growth and compensation for our aging workforce. While employment rates and labor force participation rates for new refugees are lower than their U.S.-born counterparts (likely due to language barriers), four years after resettlement, refugees have a higher labor force employment rate and, seven years after resettlement, a higher employment rate than native-born citizens. A recent study calls for large increases to the U.S. immigration rate to combat the declining worker-to-retiree ratio, which is currently 3.0 today but is expected to decrease to 2.0 by 2075.

In addition to their contributions to federal and local taxes which funds schools, highways, and other essential services, immigrants make enormous contributions to the U.S. Social Security program, which is projected to lose $1.5 trillion in revenue if legal immigration pathways were cut by 50%, a figure that would spike even higher if legal immigration pathways are suspended or terminated altogether.

“What has happened to us in this country? If we study our own history, we find that we have always been ready to receive the unfortunate from other countries, and though this may seem a generous gesture on our part, we have profited a thousand fold by what they have brought us.”

- Eleanor Roosevelt, First Lady of the United States

Myth: Refugees hurt American workers by making it harder for Americans to find jobs and decreasing wages.

Fact: Refugees are economic actors. They are consumers, workers, and entrepreneurs who tend to complement, rather than compete with American workers, filling jobs where the U.S. has severe labor shortages and creating jobs as business owners, consumers, and taxpayers. These entrepreneurs start Fortune 500 companies, hire native-born American workers, boost wages and strengthen the middle class. According to the Fiscal Policy Institute, small businesses owned by refugees and other immigrants employed approximately 4.7 million people in 2007 and generated more than $776 billion annually.

40% of Fortune 500 companies were founded by immigrants and their children, employing over 10 million people worldwide, including some of the U.S.'s biggest companies such as AT&T, Big Lots!, Capital One, Colgate, eBay, Kraft Foods, Kohl's, Google, Panda Express, Pfizer, Radioshack, Tesla, and Yahoo!. They are significantly more entrepreneurial than other sectors of the population, launching more than a quarter of all U.S. businesses.

Historical data suggests that immigration has significant long-term benefits for native-born citizens by encouraging higher-paying occupations and accelerating the pace of innovation and productivity. Further, immigration allows the U.S. to increase productivity despite an aging workforce, by helping to satisfy labor needs and fund and maintain our social safety net.

"Every aspect of the American economy has profited from the contributions of immigrants.”

- President John F. Kennedy

Myth: Our government spends too much money on refugee resettlement when it should prioritize the needs of American citizens.

Fact: While initial settlement of refugees cost around $15,000, research shows that within 8 years of resettlement, refugees are paying more in taxes than they receive in benefits, and over 20 years, pay more than $21,000 in taxes than services received. A 2017 report by the Department of Health and Human Services found that refugees “contributed an estimated $269.1 billion in revenues to all levels of government” between 2005 and 2015 through federal, state and local taxes, which was $63 billion more than the public dollars expended on refugee programs.

Study after study shows that admitting refugees and asylum seekers makes the United States better off. Even a 10% reduction in asylum seekers results in a loss of approximately $9 billion to the U.S. economy ($1.5 billion of which would be tax dollars) over five years.

“A policy causing large reductions in immigration in general creates large negative effects on the overall economy and on the fiscal balance of government. There is no meaningful controversy in the economic literature about this general, qualitative conclusion.” Michael Clemens, economist at Center for Global Development.

Myth: Deporting asylum seekers and undocumented immigrants is good for the American economy and American citizens..

Fact: Mass deportations would have nationwide repercussions that would have a dramatic impact on our economy, including the U.S. housing market, agriculture, hospitality, health care, and the nation’s supply chain. A 2016 study estimated that a “policy of mass deportation would immediately reduce the nation’s GDP by 1.4 percent, and ultimately by 2.6 percent, and reduce cumulative GDP over 10 years by $4.7 trillion.”

Three-quarters of the 7.6 million undocumented residents in the labor force are self-employed, and have created jobs for others in the process of creating jobs for themselves. Policies that restrict immigration or force people from our country result in a restriction of economic opportunities and activities by everyone in the country, including native citizens.

Many of the people that would be deported have been in the United States for decades under programs such as the 500,000 young adults protected by DACA and the 700,000 individuals who are protected by TPS designations (temporary protected status for individuals from countries designated as unfit for return due to armed conflicts, environmental disasters or other extraordinary conditions). With approximately 11 million undocumented residents, mass deportations would tear families apart, decimate the household income of households shared by US citizens and undocumented residents, and result in approximately 5.7 million U.S. citizen children being separated from their parents, resulting in public costs to support these minors.

“It says something about our country that people around the world are willing to leave their homes and leave their families and risk everything to come to America. Their talent and hard work and love of freedom have helped make America the leader of the world. And our generation will ensure that America remains a beacon of liberty and the most hope fill society this world has ever known.”

- President George W. Bush

Myth: Refugees are dangerous to our national security.

Fact: It is in America’s national security, foreign policy and economic interests to welcome refugees and it can be done without harming national security,” according to Elizabeth Neumann, former assistant secretary for counterterrorism and threat prevention at the Department of Homeland Security, in an NFAP report. “Over the last two decades, security and law enforcement professionals at all levels have worked to establish, improve and utilize robust security and vetting procedures for individuals admitted as refugees to the United States. These policies and procedures have been reviewed, enhanced and strengthened repeatedly.” Studies have found no causal link between accepting refugees and an increase in terrorist attacks, either from individuals who have been resettled or terrorist groups based in refugee origin countries.

In fact, our willingness to accept and resettle refugees has always been a foreign policy tool, as it helps defuse potential international crises and undercuts the propaganda of those who wish harm on the U.S., claiming that we are xenophobic, Islamophobia, racist, selfish, and hypocritical. “Our reputation for humanity may be as important … as our military might” in our ongoing struggle with terrorist groups.

National security experts from both Democratic and Republican administrations have testified that accepting refugees advances U.S. security and supports the stability of U.S. allies and U.S. interests abroad.

“Refugees are not terrorists. They are often the first victims of terrorism.”

- António Guterres, Secretary-General of the United Nations

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