Du 1

Jeff Du

Mrs. Mary Jane Sasser

IR 1-12AP

1/13/2020

The Economic Impacts of the Immigration Population in Maryland

I. Introduction:

In Maryland, around 15% of residents, or 900,000 individuals, were born in another country, and

11.3% of Maryland’s native-born population had at least one immigrant parent (​"Fact Sheet:

Immigrants in Maryland"​). Of these, approximately 247,000 individuals are undocumented

(​“Profile” 1​). Yet despite the significant amount of immigrants residing within Maryland and its

local communities, the literature on the actual impact of Maryland’s immigration population

lacks holistic, updated, examination, with studies generally only concentrating on one particular

subfield of immigration economics. This paper seeks to examine four key aspects of immigration

economics: contributions in tax revenue, additions to the workforce, costs of public assistance

use, and education spending, analyzing the implications of each with regards to Maryland’s

overall economic prosperity. ​On balance, the net positive fiscal impact of the immigrant

population in Maryland in terms of the gains from increased tax revenue and job creation

outweigh the associated costs of public assistance and education.

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II. First Control: Overall, immigrants in Maryland create significant contributions to
state and local tax revenue.
A. Both undocumented and legal immigrants pay various forms of state and local
taxes
1. Legal immigrants (tax residents) are subject to the same taxes as any other
U.S citizens, including income, property, state, and local taxes.
2. Undocumented immigrants, even if they are not designated as “tax
residents”, still end up paying a multitude of taxes.
a) “In addition to paying sales and excise taxes when they purchase
goods and services like utilities, clothing, and gasoline,
undocumented immigrants also pay property taxes directly on their
homes or indirectly as renters, and at least half are paying income
taxes despite lacking legal status” (“​Undocumented
Immigrants'” 1​).
b) “At least 50 percent of unauthorized immigrants have income and
payroll taxes withheld from their pay” ​(“​The Impact of
Immigrants” 13​), meaning that despite common misconceptions,
many undocumented workers often pay some form of income
taxes.
3. “Maryland is home to 24,000 young adults who are eligible for DACA.
They contribute more than ​$40 million per year in state and local taxes​”
(​Hutton 1​)
B. As a result, both legal and undocumented immigrants contribute significantly to
Maryland’s tax revenues.
1. "Immigrant-led households in the state paid $6.1 billion in federal taxes
and $3.1 billion in state and local taxes in 2014"(​“Fact Sheet:
Immigrants in Maryland” 5​).
2. “The table also indicates that foreign-born households managed a net
income tax contribution of $61.1 billion in 2012, which takes into account
the social assistance spent on those households” (​Tuttle 5​).
3. Undocumented immigrants in Maryland paid an estimated $332.2 million
in ​state and local taxes​ in 2014 ​(“Fact Sheet: Immigrants in Maryland”
4​).
4. Comprehensive immigration reform in Maryland that would allow
undocumented immigrants to legally work in the U.S would further
increase federal, state and local tax revenues. This is because not all
undocumented immigrants are currently hired and paid in a manner that
requires them to pay taxes.
a) With immigration reform, undocumented immigrants’ “effective
state and local tax rate would also increase to 7 percent on average,
which would put their tax contributions more in line with
documented taxpayers with similar incomes” (​“Undocumented
Immigrants” 1​).
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C. This tax payment revenue, combined with the sizeable spending power that
immigrants in Maryland possess, directly contributes towards state GDP
expansion and increased production.
1. “Marylanders in immigrant-led households had $24.6 billion in ​spending
power​ (after-tax income) in 2014” (“​Fact Sheet: Immigrants in
Maryland” 5​). Much of this money then flows back into Maryland’s local
economy through purchases and investment.
2. TPS (Immigrants of Temporary Protected Status) holders from El
Salvador, Honduras, and Haiti contribute an estimated 1.2 billion dollars
in State GDP (​Hutton 2​).
3. Providing a “pathway to earned citizenship [which] expands... high-skilled
and other temporary worker programs would together boost Maryland’s
economic output by $740 million” (“​The Economic Benefits” 1​).

Transition: In addition to contributions made through state tax revenue and through spending
power that improves Maryland’s economic performance, the immigration population in
Maryland also makes up an essential aspect of the Maryland workforce, providing key labor
contributions that expand local businesses.

III. Second Control: Immigrants also fill in necessary employment gaps within various
Maryland industries.
A. The immigrant workforce makes up key employment within various Maryland
businesses and specific industries.
1. Regarding local industries, many of these companies face labor shortages,
and as a result, require more employees to keep production up and
maintain a sustainable revenue.
a) “Without more workers to pick crabs, the price of Maryland crab
meat is likely to skyrocket this year. Sales of small female crabs
that are less desirable for steaming could also drop by $10 million
or more, a blow to lower Chesapeake Bay communities where
larger crabs are less common” (​Hutton 1​).
2. “Immigrant workers were most numerous in the following industries:
Health Care and Social Assistance, Accommodation and Food Services,
Professional, Scientific, and Technical Services, Construction, Retail
Trade" (“​Fact Sheet: Immigrants in Maryland” 3​).
3. “There are 65 occupations in which 25 percent or more of the workers are
immigrants (legal and illegal). In these high-immigrant occupations, there
are still 16.5 million natives — accounting for one out of eight natives in
the labor force” (​Camarota 1​).
B. Immigration does not harm the salaries or job opportunities of native workers
1. In many of the so-called “immigrant-dominant” industries, native U.S
citizens generally do not prefer to work in these types of occupations.
Examples of these industries include farm labor and hospitality
management.
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2. Even then, immigrants generally tend to be competing against other
immigrants for similar jobs within a specific field, rather than taking a job
away from a native-born worker.
a) “If you then zero into who the immigrants actually compete within
the labor market, there seems to be a lot of evidence that
immigrants compete most directly with other immigrants. An
immigrant arriving into your skill group matters much more to
your wages if you yourself are an immigrant than if you yourself
are a native” (​Bouston 2).
3. “In particular, the evidence suggests that when the economy is growing
briskly even low-skilled U.S.-born workers benefit from immigration,
albeit marginally” (“​The Impact of Immigrants” 11​).
4. Similar to the point made on the impact of immigration reform regarding
benefits of increasing permanent residency of undocumented immigrants
(see II.B.4), these changes would also holistically expand the incomes of
all Maryland citizens. This is a direct result of benefits derived from the
tax and employment contributions of an increasingly productive
immigrant population.
a) “Providing a pathway to earned citizenship and expanding high-
and low-skilled visa programs will increase total personal income
for Maryland families by $2.9 billion in 2020, according to
Regional Economic Models, Inc.” (“​The Economic Benefits” 1​).
This applies to all Maryland families, not just immigrant
households.
C. The immigration population thus fills in necessary employment gaps within
Maryland’s industries
1. “While Maryland’s Gross State Product (GSP) grew by 26 percent over
the decade, its workforce grew by 15.2 percent (Table 6). The
foreign-born accounted for well over half, or 57.1 percent, of workforce
expansion” (“​The Impact of Immigrants” 11​).
2. “Immigrants and their children will have accounted for virtually all of the
country’s growth in the working-age population; in the decade ahead,
without immigrants and their children, the working-age population in the
United States would decrease by more than 7 million” (​“Washington
D.C” 4​).
3. Only 6% of the undocumented population is unemployed. 72% are
employed and 22% are not in the labor force (​“Profile” 3​).
a) It is important to note that since only a small amount of immigrants
are actually unemployed, immigration measures designed to boost
legal immigration and expedite the path towards permanent
residency will not result in an increase in the number of
unemployed workers.
4. “Immigrants own more than 60 percent of all gas stations, 58 percent of all
dry cleaners, 53 percent of all grocery stores, 45 percent of all nail salons,
and 38 percent of all restaurants” (​“Washington D.C”​ 3).
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5. In addition to vital employment being fulfilled by the immigrant
population, the work that these immigrants contribute serve to further
advance Maryland’s overall economic prosperity, because companies can
produce more goods, invest more back into Maryland, and further
continue this cycle of strong economic performance.

Transition: Of course, it’s important to analyze the positive fiscal contributions that the
immigrant population in Maryland contribute, but there are unavoidable costs that inevitably
come with supporting a significant immigrant population, especially undocumented immigrants.
One of the main issues deals with the costs of public assistance usage for both legal and
undocumented immigrants, though predominantly for those in the country legally.

IV. Third Control: Expenditures on immigrant public assistance do not pose an extreme
cost as a result of low usage rates.
A. Undocumented immigrants are ineligible to receive most benefits, and many legal
immigrants who are eligible for these programs do not enroll for fear of
jeopardizing their immigration status.
1. “Laws bar non-permanent residents [either undocumented immigrants or
legal immigrants who have not received a green card] from cash assistance
benefits, as well as Medicaid, the Children’s Health Insurance Program
(CHIP), the Supplemental Nutrition Assistance Program (SNAP), SSI, and
TANF.3 The law limits benefits for undocumented immigrants to
emergency medical care and Women, Infants, and Children (WIC)
assistance” (​O'Shea and Ramon 5​).
2. “Undocumented immigrants, including DACA holders, are ineligible to
receive most federal public benefits, including means-tested benefits such
as Supplemental Nutrition Assistance Program ( commonly referred to as
food stamps), regular Medicaid, Supplemental Security Income (SSI)”
(“​Fact Sheet: Immigrants and Public Benefits” 1).
3. Within immigration law and policy, a phenomenon known as the chilling
effect exists. In essence, immigrants, both legal and undocumented, do not
enroll in government programs for fear that their immigration status will
be compromised. For example, with the ongoing controversy regarding the
changes to the public charge law, many immigrants are choosing to
disenroll in public assistance programs for safety, even though there
currently exists an injunction in court blocking the changes. Overall, this
leads to reduced enrollment and participation in government initiatives,
including assistance programs.
a) “Studies show that health benefits that require immigrants to
disclose their personal information may generate similar distrust
and decrease their use of these services. Researchers theorize that
citizens reduce their use of services under these policies because
their usage may expose undocumented immigrants in their
personal networks” (​O’Shea and Ramon 10​).
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B. Even despite the relatively small numbers of the immigrant population that
utilizes public assistance, costs still arise from the introduction and
implementation of these programs.
1. It’s estimated, for example, that more than half of the immigrant
population is on some variant of government assistance (​Gomez 1​)
a) “On average, each immigrant who is broadly eligible for the
welfare or entitlement programs costs $16,088 in 2016”. However,
the paper goes on to note that this estimate is around “27 percent
less than the average native, who costs $21,926” (​Nowrastah and
Orr 4​).
2. For a program in Maryland funding child care for undocumented families,
it is estimated that it will cost “about $3.6 million per year plus a share of
the federal funding to CCDF [Child Care and Development Funds]" in
order to support these children (​Martin 22​).
3. In Maryland, “the number of children of illegal aliens presumed to be
accessing TANF [Temporary Assistance for Needy Families] benefits is,
therefore, likely to be about 14,600. The average benefit per participant
was $574 per month in 2010...applying the 2010 level of funding to the
likely number of children of illegal aliens accessing the program suggests
a monthly expenditure of $8.38 million” (​Martin 21​).
C. But it’s important to consider that in general, immigrants utilize these programs at
a lower rate than most native-born Americans; in essence, whatever they utilize in
consumption of these programs they contribute back through other economic
means.
1. “​As recently as ​2013​, the rate at which non-citizens have used public
benefit programs was less than that of U.S.-born citizens. ​For example​,
32.5 percent of native-born citizen adults receive SNAP benefits compared
to 25.4 percent of naturalized citizen adults and 29 percent of noncitizen
adults” (“​Fact Sheet: Immigrants and Public Benefits” 2​).
2. “Poor immigrants are less likely than natives to use every welfare program
with the exception of Medicaid, where they are 0.4 percent more likely to
use it (Table 3). Naturalized immigrants use less welfare than natives for
every program except SSI and Medicaid. Non Citizens use every welfare
program less than natives do, often by wide margins” ​(Nowrastah and
Orr 5​).
3. As a result, “analyses of both working age and workforce dependencies
demonstrate that immigrants serve to reduce societal dependencies in the
US: they are less of a “social burden” than the native-born are to
themselves. Immigrants are generally of working age, they are often
educated at another country’s expense, and a greater proportion of them
are in the labor force” (​Boucher 6​).
a) This presents an essential observation: if the immigrant population
as a whole utilizes public assistance to a lesser degree than the
native U.S population, then the argument that the costs associated
with immigrant public assistance use are too high creates a
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contradiction. Although these costs do exist, immigrants contribute
far more towards federal and state government revenues than they
consume in benefits, indicating that the immigrant population
should not be scapegoated for potential deficits or higher costs.

Transition: In addition to those programs that provide temporary assistance for immigrant
households, various educational programs seek to integrate immigrants, both legal and
undocumented, better into Maryland society. While these programs do pose additional costs on
Maryland taxpayers, they serve as an investment into the future of Maryland’s economy.

V. Fourth Control: While educational costs exist for the assimilating immigrant
population, this spending represents an investment into the future of Maryland’s
educated workforce.
A. There are various programs in Maryland (EX: Dream Act) which help
immigrants, both legal and undocumented, complete their education.
1. Immigrant children need services to acclimate into the U.S, especially
when it comes to learning English.
2. “The Maryland government supports investment in higher education
through several different channels, including a vibrant network of
community colleges and world-class universities” (“​The Impact”17​).
3. “Maryland provides eligible undocumented students with in-state tuition at
public community colleges and universities” (“​Maryland Policy” 1​).
4. “Along with the rapid rise in the foreign-born population, enrollment of
Limited English Proficient (LEP) students who are placed in supplemental
classes in Maryland’s public schools has risen rapidly in recent years”
(​Martin 9).
B. This education requires funding from the state government, which may potentially
cost a significant amount of spending. Most of this, of course, would come from
the taxes of native U.S citizens, and would predominantly be utilized by
undocumented children in the Maryland educational system.
1. “Legislative analysts estimate that the measure [Dream Act] would cost
Maryland $3.5 million per year” (​Brown 1​). This number stems from the
funds necessary to provide in-state tuition to undocumented immigrants.
2. “The 45,000 children of illegal aliens who are in LEP [Limited English
Proficiency] instruction and the estimated cost per student of $7,040 result
in an estimated cost to the taxpayer of $317 million per year” (​Martin 9​).
3. “The total estimated expenditure for the school free meals program for the
children of illegal aliens is $43.3 million (Table 5)” (​Martin 10​).
C. However, it is, in essence, a long term investment, and immigrants with more
educational attainment tend to contribute greater to Maryland’s economy than if
they had not received these educational opportunities.
1. This is because in general, education tends to lead to higher earnings over
a particular lifetime.
a) “In-State Tuition will benefit the state economically and fiscally
because the higher future earnings levels that result from advanced
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education mean increased purchasing power for those Maryland
High School students newly able to attend college” (​Maryland
Dream 2​).
b) “A high-performance education experience is a self-reinforcing
dynamic. Positive experiences, especially starting from the early
years of a child, will lead to higher levels of participation later in
life and vice versa. Unfortunately, many children of immigrants
never seem to get into this positive cycle of academic enrichment,
and many withdraw before finishing secondary school” (“​The
Impact” 16​).
2. “Beneficiaries of advanced education achievement generally...experience
an...increased likelihood of homeownership...decreased likelihood of
poverty ...[and] if the beneficiaries of advanced education achievement
attend at least some college, their children ‘have higher cognitive levels,
better scores in math and reading tests, and higher standardized test scores
than peers who parents have only achieved at or below a high school
diploma’” (“​Maryland Dream” 2​).
a) This leads to higher levels of commitment and attainment of
education for the later generations of the initial immigrant
households, again creating a spiraling effect that only further
supplies Maryland with skilled and educated labor.
3. “[Since] foreign-born [immigrants] usually migrate to the US in their
working years (i.e., in 2011, 68.9% of the new immigrants were between
the ages of 18 and 64), their childhood educational costs are paid by
another country and another set of workers” (​Boucher 4​).
4. “Those higher earnings and increased purchasing power will bring to
Maryland higher tax revenues, greater consumer spending, and
presumably, greater economic growth” (“​Maryland Dream” 1​).

Transition: Educating Maryland’s immigration population requires an up-front investment; costs

for educational programs, in-state tuition, and other aid to immigrants range in the millions.
However, in the long term, this spending to improve the education of Maryland’s immigrants
creates positive cycles for immigrant households which eventually brings benefits back toward
the state.

VI. Conclusion

When examining holistically the economic implications of the immigration population in

Maryland, it’s extremely important to consider all the significant ways in which immigration

affects our local communities. Indeed, the immigrant population, both legal and undocumented,
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possess associated costs that result from the usage of various public assistance and educational

services. However, the net positive gains that come with immigration: an increase in the

tax-paying population, an influx of workers into the labor force, and spending power that

provides an influx of revenue into its local businesses, all serve as important contributions

towards Maryland’s economy. Yet Maryland’s immigration population is not unique in these

aspects; across the nation, immigrants continue to positively advance towards their local

communities through various forms of economic benefits. It is thus essential for national, state,

and local governments to understand that immigration is an investment in America’s future, and

to take measures to ensure that immigration, despite the various controversies surrounding the

national discussion, remains a key aspect of the U.S going forward.

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