Thanksgiving – An American Holiday that Holds Special Significance for Every Proud Immigrant

November 24, 2014. An opinion piece in Sys-Con Media explains why immigrants give special thanks around Thanksgiving:

With our personal calendars filled with holidays that range from religious observances to children’s birthdays there is only one day of the year that we can all sit down together as one large, diverse family of Americans and celebrate who we are, where we came from and why this remains an extraordinary country of opportunity. Welcome Thanksgiving.

…This author came to the United States from Iran in 1969. I had no grand plan. Rather, I only had the promise of a job in the emerging information technology field with a young family to support. But I knew, like every hopeful immigrant around the globe knows, that only in America can success be achieved through hard work, since, regardless of all our societal problems, it is our work ethic that remains the most important criteria by which we judge our fellow citizens.

When these new American citizens sit down for their holiday meal this week, the odds are they personally locked up their businesses and shops to observe the day. The Fiscal Policy Institute (FPI) reports that foreign-born individuals start their own businesses across the nation at more than twice the rate of those born here (with the Greek community holding the top honors in their analysis of which immigrant group is most likely to open a small business). In New York, our nation’s most famed melting pot, the last census data available reveals that some 48% of the city’s entrepreneurs were foreign-born.

(This piece overstates our data a little. FPI data shows that immigrants make up 18 percent of small business owners in the United States and 16 percent of the labor force. So, immigrants are indeed more likely to be small business owners…but, not twice as likely.)

President’s Immigration Action Expected to Benefit Economy

November 21, 2014. In response to President Obama’s announcement that he will use the power of the executive office to shield about 5 million people from deportation and give them authorization to work, the Fiscal Policy Institute has prepared answers to the following questions.

What are the economic implications of administrative relief?

The Fiscal Policy Institute expects a 5 to 10 percent increase in wages for the roughly 5 million workers expected to be eligible for legal work status. A number of studies have looked at the economic benefits of gaining full legal status. In 2013, the Fiscal Policy Institute did a meta-study of these analyses, and found that they converged around the conclusion that the wage gain is about 10 percent.

David Dyssegaard Kallick, director of the Fiscal Policy Institute’s Immigration Research Initiative, explains the reason for the wage gain: “Administrative relief should help currently unauthorized immigrants to find a better job match, and they will be less likely to be taken advantage of by employers.”

“We’re talking about immigrants who are already here, so the issue is not new workers competing with existing ones,” adds Jared Bernstein, senior fellow of the Center on Budget and Policy Priorities. “In fact, bringing these workers out of the shadows will not only boost their wages, it could also bring some improvement for other workers. After all, if you find yourself working next to a group of workers who can be taken advantage of by your employer, that’s bad for them but it’s bad for you, too.”

What about the impact on taxes and spending?

The net fiscal implications are expected to be clearly positive.

Immigrants who gain this status will be paying taxes, and they will pay them on somewhat higher earnings than they have today. This will not change eligibility for programs such as SNAP (Food Stamps) or Temporary Assistance for Needy Families, and the newly registered immigrants are specifically excluded from subsidies in the Affordable Care Act.

State and local tax revenues would increase as a result of administrative relief. The Institute on Taxation and Economic Policy (ITEP) modeled a closely related question in 2013, and provides a state-by-state breakdown. Tax revenues would go up for two reasons. First, immigrants would be paying taxes on higher wages (see above). And second, they would be brought into full compliance in paying taxes.

The ITEP analysis considered a scenario in which all of the estimated 11 million unauthorized immigrants were given legal status. Administrative reform would be available to a little less than half that number, and wage gains would also be lower, so we estimate the gains in state and local tax revenues to be correspondingly lower. How much less? About a third to a half the size, at a first very rough approximation. The main reason is that administrative relief is expected to cover fewer people.

Looking at the cumulative gain in state and local taxes in all 50 states, Matt Gardner, executive director of the Institute on Taxation and Economic Policy, concludes: “President Obama’s executive action could raise nearly a billion dollars a year in new state and local tax revenue—and our research suggests that if Congress were to enact a more comprehensive approach to legalizing undocumented families, the states could bring in twice that amount.”

In New York State, for example, the net gain due to administrative relief would be about $100 million in added state and local revenues per year.

What about federal taxes and spending?

Even before this action, roughly half of unauthorized immigrants had payroll taxes withheld (which account for the biggest tax payment for all low-wage workers), and about the same share filed income tax returns. Immigrants granted administrative relief would be brought into full compliance on both payroll and income taxes.

The Council of Economic Advisors put out a report today that estimates that the federal deficit would be reduced by $25 billion over the next 10 years as a result of the administrative relief.

Is this the immigration reform we’ve been waiting for?

This is a major step forward. But, it is not a full immigration reform. It leaves an estimated 6 million unauthorized immigrants in the shadows. It does not address a system for workplace IDs. And, it does not address the question of future flows of legal immigrants. To implement a full immigration reform, as envisioned for example in the Senate bill passed in 2013, requires either that the House of Representatives vote on S.744, or that both houses pass a new immigration reform bill.

“It’s a very good moment for the president to be doing this,” Kallick adds. “There has been comparatively little unauthorized immigration in recent years. The next obvious step is for Congress to pass a bill that will not just be a stopgap measure but will address this problem permanently.”

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Experts Face Off on Economic Impact of President’s Immigration Plan

November 21, 2014. Fox Business News reports on the economic impacts of the president’s immigration action, quoting the Fiscal Policy Institute:

On economic impact:

At the liberal-leaning Economic Policy Institute , Director of Immigration Law and Policy Research Daniel Costa argued that the plan would actually be good for low-wage U.S. workers and small businesses.

“Businesses should like it. Those who are paying minimum wage won’t have to compete with those paying less than minimum wage, or who are not paying overtime to unauthorized workers,” Costa said.

The Fiscal Policy Institute’s Immigration Research Initiative Director David Kallick agrees.

“It means that it can be harder for employers to pay [immigrants] lower wages and take advantage. It’s good for them but also good for U.S. workers who are standing next to them,” he said.

And, on fiscal impact:

While Kallick said the plan “can only have positive impacts on the economy,” he said it is difficult to assess what temporary relief could mean in terms of tax collection and for the deficit.

“The [Congressional Budget Office] estimated there would be a $158 billion decrease in the deficit for comprehensive reform,” Kallick said. “If Congress would pass full reform, this is the level of impact we’d see. This is significantly less than that.”

However, Kallick gave a ballpark figure, estimating that on the state and local level, authorizing these immigrants would mean an additional $1 billion in taxes.

Experts: Obama’s Action Should Increase Tax Collections

November 21, 2014. The Arizona Republic ran a story about President Obama’s administrative action on immigration that cites the Fiscal Policy Institute’s work, as well as our partners at the Institute on Taxation and Economic Policy:

 

Undocumented immigrants who qualify for President Barack Obama’s executive action, announced Thursday, will pay far more in new taxes than they will gain in credits, providing a significant boost to state and federal coffers, tax researchers predicted Friday.

Legalizing millions of workers also will tend to push up wages for both immigrants and U.S. citizens, researchers said.

Undocumented immigrants who qualify for deferral will be able to get work permits and Social Security numbers. They also must pay all relevant state and federal income and payroll taxes.

Under the executive action, they will be eligible for child and earned-income tax credits, but will not be eligible for other government benefits, according to White House officials.

“The net of that is undoubtedly going to be positive and pretty substantial,” both at the state and federal level, said David Dyssengaard Kallick, a senior fellow at the Fiscal Policy Institute, a nonpartisan New York think tank.

“While estimates are obviously imprecise, about half of undocumented immigrants pay payroll taxes already, and about half file income-tax returns,” Kallick said.

Elaine Maag, a senior researcher at the Tax Policy Center, a Washington-based nonpartisan think tank, said undocumented parents of children who are U.S. citizens or legal permanent residents already qualify for child tax credits under current federal law.

“More people will claim that credit, but overall, you’ll see revenue go up,” Maag said.

And, a little further on:

Both Arizona’s Department of Revenue and the Joint Legislative Budget Committee said they have not estimated the tax and revenue impact of Obama’s executive action. However, the Institute on Taxation and Economic Policy, a Washington-based think tank, estimated last year that undocumented immigrants currently pay about $10.6 billion a year in state and local taxes around the country and more than $374 million a year in Arizona.

“Most of those are sales, excise and property taxes — taxes that don’t depend on citizenship status,” said Matt Gardner, the institute’s executive director.

The institute estimated that providing a legal presence to all the estimated 11 million undocumented immigrants in the country would boost state and local tax revenues by $2 billion a year and increase tax revenue in Arizona by about $54 million, most from gains in state income tax.

Although Obama’s executive action will allow 3.8 million to 4.3 million additional people to work legally, the basic dynamic is the same, and there would be a proportional gain in revenue, Gardner said.

“There’s absolutely going to be a wage boost; there will be in increase in income-tax compliance, and more will pay income taxes regularly,” he said. “That’s a win-win for states.”

 

Undocumented Workers, Meet the IRS

November 20, 2014. In Politico, a story about the economic and fiscal impacts of President Obama’s executive action on immigration:

Obama’s new immigration order, which will shield about 5 million undocumented workers from deportation, will have tax implications that are sure to irk Republicans who are already calling foul on his bid to bypass Congress to ease immigration laws.

That’s because most of that group of 5 million will be adults with U.S.-born children, meaning they’ll theoretically be able to claim up to $1,000 per child for child tax credit, or several thousand dollars as part of another tax credit for the working poor, experts said.

But the 5 million will also pay a modest amount of new taxes to Uncle Sam that experts said will more than make up for the credits the government pays to them — potentially even creating a small plus-up for the Treasury.

“You would see a gain in earnings, in tax compliance, and some gain in the claim of tax credits — and the net of all that would almost surely be positive,” said David Kallick, a senior fellow at the immigration research initiative at the Fiscal Policy Institute.

 

(A small correction: Kallick’s title is actually senior fellow and director of the Fiscal Policy Institute’s Immigration Research Initiative.)

Detroit’s Immigrants Sustain City as Debate Consumes Washington

November 20, 2014. As President Obama puts immigration back on the front burner of the national debate, a story in Bloomberg Business Week focuses on the important role immigrants are playing in the Detroit economy, using some data from a Fiscal Policy Institute report to make the case:

The 18th-largest U.S. city ranks 135th in the number of foreign-born residents, said Steve Tobocman, director of Global Detroit, a nonprofit agency that promotes legal immigration as an economic catalyst.

Still, in 2007 they accounted for 11 percent of the economic output in a four-county area that includes Detroit while making up 9 percent of the population, according to the most recent data from New York’s Fiscal Policy Institute, a research organization.

 

Fiscal Policy Institute Names Ron Deutsch as Interim Executive Director

November 17, 2014. The Board of Directors of the Fiscal Policy Institute announced today that it has appointed Albany veteran Ron Deutsch as Interim Executive Director effective immediately.

After a year of dedicated service, Dr. Frederick G. Floss has decided to return to his position as professor of economics and finance at Buffalo State College but will continue to work with the organization as a Senior Fellow.

“Income inequality and tax fairness will be two of the most important issues facing New York when the 2015 Legislature convenes.  For over two decades the Fiscal Policy Institute has been the most respected public voice on these issues and the Board is pleased to have Ron Deutsch lead us in a new era as we intensify our focus and advocacy for progressive policies that will serve all New Yorkers, especially those with lower and middle incomes,” said Michael J. Burgess, Chairman of the FPI Board of Directors.

Deutsch has been a tireless advocate for working families for the past 22 years in Albany.  He led the Statewide Emergency Network for Social and Economic Security (SENSES, a statewide anti-poverty advocacy organization) for 13 years and has been the Director of FPI’s sister 501(c)(4) organization, New Yorkers for Fiscal Fairness for the past 8 years. Deutsch will be taking the helm as FPI enters the 2015 legislative session and will use his decades of organizing and advocacy experience to complement FPIs outstanding analysis and research capabilities. FPI’s budget work will focus on building broad coalitions around the renewal of the millionaires tax, ending the States austerity budgeting and reinvesting in our schools and cities, boosting the wages of working families, addressing deficiencies in our economic development system and promoting a progressive state and local tax structure that works for all of us.

“I am honored to have been chosen as FPI’s Interim Executive Director and am very excited about the opportunity to work more closely with FPI’s excellent and dedicated staff. I look forward to working with FPI’s allies, elected officials and the public on the development and implementation of progressive public policies that improve the lives of low and middle-income New Yorkers,” Deutsch said. “The Board and I are also pleased to announce that Dr. Floss has agreed to become a Senior Fellow with FPI. His leadership during our transition period is greatly appreciated and I am happy he will continue to work with me and FPI.”

Deutsch is a graduate of the State University of New York at Albany.  He also leads an all volunteer non-profit (www.thegivingcircle.org) that works to help improve the lives of families in the Capital District, nationally and internationally.

“Ron Deutsch will continue the tradition of solid analysis and common-sense policy proposals that have made FPI a trusted voice in New York,” said Nicholas Johnson, Senior Vice President for State Fiscal Policy at the Center on Budget and Policy Priorities. “We look forward to continuing our strong relationship with FPI in the effort to bring broadly shared economic growth to New York State and the rest of the nation in difficult times.”

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Local Fiscal Stress: State Austerity Policy and Creative Local Response

December 9, 2014, Saratoga Springs. Hosted by the Fiscal Policy Institute and Cornell University’s Community Regional Development Institute, this dynamic free event represented a collaboration of unions, management, municipalities, schools and academia. It built from the 2011 State of Upstate New York conference and the March 2014 State of Cities conference. Municipal and school district officials, union leaders, fiscal administrators, state legislators and staffers, New York State agency representatives are all invited to attend. For a two-page summary of the conference, click here. For further information on this conference, visit Cornell’s Community and Regional Development Institute web site.

Event Flyer PDF

Economic and fiscal impacts of proposed consolidations involving 5 postal facilities

November 10, 2014.  The American Postal Workers Union asked FPI to estimate the net economic and fiscal impacts of proposed consolidations involving five postal facilities around the country. The proposed consolidations were part of a nationwide “cost-savings” plan that would have further slowed mail delivery times. One of these involved a proposal to downsize sorting operations at the mail processing center in Newburgh, New York, in the lower Hudson Valley and to consolidate these operations at the Albany processing and distribution facility, 90 miles away. The consolidation would have involved the loss of 360 postal jobs in Newburgh and an increase of 128 postal jobs in Albany. The Postal Service released its own study about the potential impacts on postal operations but that analysis dramatically understated the overall community economic impact.

FPI’s economic impact analysis of the proposed Newburgh downsizing concluded that the net annual savings to the USPS were dwarfed by the net decline in labor incomes in Newburgh and New York state overall associated with the loss in postal jobs, with job losses sustained in businesses that support postal operations as well as losses related to reduced consumer spending associated with middle-income paying postal jobs.  In addition, the federal government and New York State would lose personal and business income and payroll taxes and local governments would experience a decline in property and sales taxes associated with the downsizing of postal sorting operations.

The other four proposed consolidations involved postal facilities in ; Huron, South Dakota; Tucson, Arizona; New Orleans; and Youngstown, Ohio.

FPI did not attempt to quantify the impact of these postal operations downsizings on businesses and consumers who would experience longer delivery times and poorer service as a result. Even though the round of consolidations that FPI analyzed was subsequently put on hold, the Postal Service reduced service standards in January 2015, with a significant portion of single piece first class mail being reduced from one-day to two-day expected delivery times.

Postal service operations and employment have already been scaled by considerably since 2000. In New York State, postal employment declined by 38 percent from 2001 to 2014, greater than the one-third job decline nationally.

The Postal Service’s plans for further consolidations are not the result of postal operations losing money. Rather, it stems from an effort by some Washington officials seeking to privatize the post office. One of the key tactics in pushing that agenda has been the 2006 Congressional legislation requiring the Postal Service to fully prefund retiree health benefits 75 years into the future over a 10-year period, at a cost of approximately $5.5 billion annually. This is a requirement that no other public or private entity in the United States must follow, and was instituted to put the public’s postal service out of business, clearing the way for greater privatization.  The Postal Service is the nation’s largest employer providing middle income paying jobs and it disproportionately employs workers of color who represent 43 percent of the postal workforce compared to a 34 percent share of the entire U.S. workforce.

See also FPI’s May 13, 2016 testimony at the public hearing convened by the Grand Alliance to Save Our Public Postal Service.

Should Nonprofits Be Mandated to Pay Living Wages?

November 5, 2014. James Parrott was a panelist for the Philanthropy New York program “”Should Nonprofits Be Mandated to Pay Living Wages, and What is Philanthropy’s Role?”. A live recording and a PDF of the presentation is available here.

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