Immigrants Add Billions to the Arkansas Economy

Immigration Impact

Walter Ewing

A perennial question in the immigration debate is whether or not immigrants contribute more to the economy than they cost. That is, do they add more economically as workers, taxpayers, consumers, and entrepreneurs than they “consume” in public education, public healthcare, and public benefits? In some ways, this question is misleading. Education and healthcare are social investments that pay future dividends; they are not merely fiscal expenses. Nevertheless, it is a useful exercise to take the question at face value and do the math. The result, contrary to the convoluted arithmetic of anti-immigrant activists, is overwhelmingly positive. Immigrants add far more to the economy than they take away. And given the aging of the native-born population, the contributions of immigrants (and their children) will only increase over time.
The economic contributions of immigrants are apparent at the national level and in states around the country. Take the case of Arkansas. In a series of three reports from the Winthrop Rockefeller Foundation, researchers at the Migration Policy Institute, University of Arkansas, and Kenan Institute of Private Enterprise at the University of North Carolina tally up the myriad contributions of immigrants in Arkansas and balance that with an accounting of their fiscal “costs.” The bottom line is impressive:

• “Subtracting the cost of essential services ($555 million) from immigrants’ combined consumer expenditures and tax contributions ($3.9 billion) yielded a net economic benefit to the state of $3.4 billion in 2010.”

• “On a per capita basis, immigrants’ contributions ($16,300) exceeded the fiscal cost of essential services ($2,300) by $13,900. That is, immigrants generated $7 in business revenue and tax contributions for every $1 the state spent on services to immigrant households—K–12 education, health-care, and corrections—in 2010.”

• During the 2008-2010 period, immigrants accounted for 17 percent of Arkansas physicians, 16 percent of construction workers, 13 percent of manufacturing workers, and 9 percent of agricultural workers. Immigrants comprised 7 percent of the workforce and 5 percent of the population overall.

The reports also highlight the extent to which Arkansas’s immigrants—42 percent of whom are unauthorized—have integrated into their communities and into U.S. society. For instance:

• “Half of Latino immigrants and two-thirds of non-Latino immigrants owned their own homes.”

• “The length of settlement for Arkansas immigrants is expanding: In 2010, 57 percent had lived in Arkansas or elsewhere in the United States for 10 years or more, compared with 51 percent in 2000.”

In addition, the reports highlight the role that the immigrant community plays in mitigating the aging of the U.S. population as the baby boomers head into retirement. In other words, as native-born workers leave the labor force, many will be replaced by immigrants—and the children of immigrants:

• “The non-Hispanic white population is aging, with the most rapid growth occurring in the population over age 45. Retirement of non-Hispanic white Arkansas workers will accelerate with the aging of baby boomers, who are now mostly ages 45 to 65.”

• “Latino immigrants and their mostly US-born children form a growing share of the Arkansas population, making them potential key contributors to Arkansas’s future workforce and economic growth.”

• “Children of immigrants were 10 percent of Arkansas children in 2010, versus 5 percent in 2000. Their share will continue to grow rapidly due to immigration and the relatively low birth rates among the US-born population, particularly white natives.”

The second report succinctly sums up this confluence of economic and demographic factors:
“Despite the fact that immigrants make up a small share of the total Arkansas population currently, they make up significant shares of workers in major industries such as manufacturing, construction, and agriculture, where they contribute to the state’s economic competitiveness and tax base. The children of immigrants—who are overwhelmingly US-born—comprise a large share of the state’s total child population and are thus important to future population growth. These mostly citizen children (over 80 percent were born in the United States) will age into the labor force in large numbers regardless of whether future immigration flows rise or decline. Investments in these, and indeed all, children represent an investment in the future of Arkansas.”
As the three reports demonstrate in such a compelling fashion, immigrants and their children will be critical to the future economic success of Arkansas. But this should come as no surprise. Successive waves of immigrants (and their descendants) have built the U.S. economy and U.S. society since the nation first came into being.

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