Tuesday, August 21, 2007

The Economics of the Dream Act

We recently received a comment that stated "taxpayers to pay through the nose to educate, provide health care, and welfare benefits"

Below is information from a number of federal agencies and other reliable sources that will contradict the statement of the taxpayer having to fund services for undocumented immigrants. DREAM Act students would help the economy and produce income that covers the taxes needed for social services. Please see footnotes at the bottom of this post.


DREAM Act Economic Impact Fact Sheet

The DREAM Act will Provide Needed Workers, Increase U.S. Competitiveness and Alleviate the Military Recruitment Crisis

The DREAM Act would help alleviate a labor shortage in the United States.
==> Experts estimate that America will need 5%, or 15.6 million, more workers by 2015 to maintain the current ratio of workers to the total population.

==> The DREAM Act would reduce the cost of recruiting foreign professionals, as processing times for visas range from one to three years, not including the time spent for acculturation and learning the language.

The DREAM Act will increase global competitiveness by utilizing skilled US trained professionals already in this country instead of competing for skilled workers with other countries

==> President Bush has called for training 70,000 math and science teachers to improve US competitiveness. The DREAM Act will help the US to be more globally competitive by resulting in an increase of graduates in the math and science sectors.

==> H-1Bs are visas with a limited yearly quota of 65,000 that are provided to highly skilled foreign nationals. Many US companies recruit engineers, computer programmers and other professionals from around the globe because of the lack of professionals in these fields in the US. For example, Silicon Valley companies are among the main supporters of H-1B visa reform (higher quotas). Due to the lack of available H-1Bs, companies say they are experiencing a reverse brain drain as skilled workers flock to the booming economies of China and India. Data suggests that companies that engage in offshoring work to India submitted H-1B visa applications in heavy volume. ii

The DREAM Act would increase the tax base for state, federal, and local governments.

==> According to the US Department of Commerce, a high school graduate earns $1.2 million in a 40-year span compared to $2.1 million for a person with a Bachelor’s degree. A person with a master’s degree has an average earning of $2.5 million in a 40-year span. iii

==> Therefore, a single person with a bachelor’s degree who earns an average $60,000 of taxable income will contribute $11,564 to taxes and welfare annually; in a 40-year span he/she will have contributed $462,560. iv

The DREAM Act will improve national security by alleviating the recruitment shortages to the armed forces.

==> In April 2005 the Army Reserve and the National Guard failed to meet their recruitment quota. Only 51 percent of Inactive Ready Reserve troops reported for duty.

==> The army expects to reverse the recruiting shortfall by lowering standards (which will increase training costs), and by adding more recruiters and spending more money on advertising. The army is also offering larger bonuses (up to $90,000, in one lump sum) to get existing troops to re-enlist. These methods will increase personnel costs as much as ten percent.v

==> As of 2006, 30,000 foreign-born individuals are currently serving in the armed forces. Every year, 7,200 of the 180,000 new recruits are non-citizens. Immigrants account for 20 percent of recipients of the Congressional Medal of Honor. vi

i. “A stiff learning curve,” Asia Times February 14, 2006.

ii. Prithiv Patel, Infosys, Wipro and TCS under investigation for misuse of H1B visas, India Daily, May 15, 2007.

iii. Economics and Statistics Administration, Census Bureau. (2002) Available: http://www.census.gov/prod/2002pubs/ p23-210.pdf

iv. 2006 Tax Table. Available at http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

v. www.strategypage.com, April 2005.

vi. American Immigration Law Foundation. (2006) Defending America: Immigrants Fight for Our Nation. Available at http://www.ailf.org/pubed/defendingamerica.shtml

Thanks to United Leadership Initiative (ULIC) and Julieta G. for sending this information

Photo: book cover "Americans Who Tell the Truth" http://www.americanswhotellthetruth.org/images/americans_book_cover.jpg

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