Sonny's Corner: Weighing the Benefits and Costs: Immigrants’ Impact on Nebraska’s Economy and Balance Sheet

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Sonny Foster"Sonny's Corner" is a regular column in Prairie Fire, featuring commentary on civil rights and justice issues. Our friend and Omaha colleague, Joseph P. "Sonny" Foster, died suddenly at age 54 in August 2005. He left an uncompleted agenda, as did many of our civil rights and justice mentors and heroes. We shall attempt to move forward on that unfinished agenda through this column.

 

Juan Manuel Pedroza

The following is a recent commentary I wrote with my colleagues Rob Santos and Molly Scott for ImmigrationImpact.Org, referencing a 2008 study by University of Nebraska at Omaha (UNO) academics Decker, Deichert and Gouveia.

We singled out their “Nebraska’s Immigrant Population: Economic and Fiscal Impacts” as an exemplar of evidence-based research that can help advance our national dialogue on immigration policy. It’s timely, relevant to current policy debates, even-handed, based on the best available data and centered on the difficult questions Nebraskans are asking: What is the economic impact of immigrants on the state? How much do immigrants contribute in state and local taxes? How much public spending is devoted to immigrants?

Using Census Bureau data from the annual American Community Survey (ACS), which includes detailed info from 18,603 Nebraskans, the report finds that immigrant workers boost Nebraska’s state and local economies. The Omaha and Lincoln areas realized the greatest benefits—the increase in immigrant labor resulted in a $1.14 billion effect in 2006, which created some 8,331 jobs. Other parts of the state also benefited from the influx of immigrant labor, which helped the construction, hotel and food services, and meat, poultry and fish-processing industries. Although the report can’t settle the debate over how much immigrants compete with or displace U.S.-born workers, the findings afford Nebraska’s policymakers and voters access to powerful facts and perspectives that they can trust.

The UNO report’s findings are credible and trustworthy because the research met high methodological standards, used multiple data sources and warned readers of any known shortcomings in the data.

The report’s authors also deserve credit for placing their numbers in context. They don’t mislead readers with anecdotes, snapshots and factoids that don’t tell the whole story. Nor do the authors put their thumbs on the scale by conflating “unauthorized immigrants” with “U.S.-born children of unauthorized immigrants.”

The first half of the report uses an established research method (IMPLAN, an input-output model) to estimate immigrants’ economic effects on the state, including industry-specific production and employment. Their computer model also allows the analysts to take Nebraskan immigrants’ actual spending patterns—on health services, food, home repair and maintenance and much more—into account. In addition, they present alternative spending estimates to offset potential limitations of the ACS data.

The second half of the report addresses public spending. To provide a comprehensive estimate, the authors list all contributions and costs associated with immigrants. Since state and local governments spend heavily on integrating immigrant newcomers, it’s easy to assume that immigrants drain public coffers. But the report demonstrates that, in 2006, Nebraska’s immigrant taxpayers contributed enough to cover the costs of the public services they receive and then some. And inconvenient data weren’t swept under the rug. Anti-immigration analysts might have emphasized spending in certain areas (such as K-12 education) while ignoring sizeable contributions (such as sales or property tax). On the other hand, pro-immigration analysts might have simply toted up immigrants’ tax payments, as though policymakers didn’t have to balance Nebraska’s budget.

The authors conclude by discussing key policy issues that can’t be resolved without more evidence-based research. These include access to health services by unauthorized immigrants, possible differences between foreign-born and unauthorized immigrant workers and changes in the composition of the immigrant labor force. A final question is whether wages in specific Nebraskan labor markets (such as construction) change as immigrants come into or leave the state. Only reports as high caliber as UNO’s study will tell.

 

Immigration in Nebraska