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The Economic Impact of DACA Recipients

In recent years, the Deferred Action for Childhood Arrivals (DACA) program has been a subject of much debate and controversy. However, beyond the political rhetoric, it’s essential to examine the tangible impacts DACA recipients have on their communities and the broader U.S. economy. Through eight years of survey data collected by the Institute on Taxation and Economic Policy (ITEP), a clearer picture emerges, revealing the significant contributions DACA recipients make economically.

Employment Rates: Driving Workforce Participation

Nearly 91% of DACA recipients aged 25 and older are employed, a statistic that underscores their active participation in the U.S. labor force. This high employment rate not only demonstrates DACA recipients’ desire to contribute but also fills critical gaps in industries where labor shortages exist.

Wage Growth: Empowering Financial Stability

The data from ITEP reveal a remarkable trend in the wage growth of DACA recipients. From 2015 to 2022, the average hourly wages earned by DACA recipients surged by an impressive 137.2%, from $11.92 to $28.27. Such substantial wage growth not only improves the financial stability of DACA recipients but also boosts their purchasing power, thus stimulating local economies.

Contributions to Social Security and Medicare: Bolstering Safety Nets

DACA recipients play a vital role in supporting Social Security and Medicare programs, contributing an estimated $2.1 billion annually. These contributions are critical for the sustainability of these safety net programs, ensuring their availability for current and future generations of Americans.

State and Local Tax Contributions: Strengthening Fiscal Health

DACA recipients and young undocumented immigrants eligible for DACA make significant tax contributions at the state and local levels. Collectively, they contribute approximately $1.7 billion annually through personal income, sales, and property taxes. These contributions bolster state and local budgets, funding essential services such as education, healthcare, and infrastructure.

Economic Impact of Codifying DACA: A Win-Win Proposition

Codifying DACA into law and enrolling all eligible immigrants in the program would yield substantial economic benefits. According to ITEP’s analysis, such measures could increase estimated state and local revenue by approximately $815 million, further enhancing fiscal sustainability and promoting economic growth.

Consequences of Repealing DACA: A Costly Proposition

Conversely, repealing the DACA program would have dire economic consequences. ITEP estimates that such an action would result in a significant reduction in state and local revenues, amounting to nearly $700 million annually. This loss stems from the termination of legal status and work authorization for DACA recipients, disrupting their contributions to the economy.

The data compiled by the Institute on Taxation and Economic Policy paint a clear picture of the economic significance of DACA recipients. From their high employment rates and wage growth to their substantial contributions to Social Security, Medicare, and state/local taxes, DACA recipients play a crucial role in strengthening communities and fueling economic growth. As policymakers deliberate on the future of DACA, it is imperative to recognize and acknowledge the invaluable contributions of these individuals to the fabric of American society and its economy. By embracing policies that support DACA recipients, the nation can foster greater inclusivity, economic prosperity, and social cohesion for all.

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The content provided on this blog is for informational purposes only and does not constitute legal advice. Readers should not act upon any information presented on this blog without seeking professional legal counsel. The opinions expressed at or through this blog are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. Please consult with an attorney regarding your specific legal situation.

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