Immigration economics: What you need to know

Trump's immigration policy could hurt U.S. farmers
Trump's immigration policy could hurt U.S. farmers

Donald Trump is finally giving his long-awaited, "major" immigration speech on Wednesday.

The issue is the cornerstone of Trump's candidacy and it holds huge ramifications for millions of immigrants and the U.S. economy.

Trump has said if he becomes president, he'd deport all 11 million undocumented immigrants in the U.S. within two years. However, in recent weeks, Trump and his advisers have been hazy on exactly how many and what kind of immigrants would be deported.

"I am -- probably like everyone else -- confused about what exactly is Trump's immigration stance at the moment," says Ben Gitis, director of labor market policy at American Action Forum, a right-leaning Washington research group.

If Trump sticks to his original proposal, it would hurt the economy, many have warned.

According to Gitis and his colleague Jacqueline Varas, the labor force would shrink, the economy would lose $1 trillion and federal spending on deportations would skyrocket.

"If we were to remove all undocumented immigrants, it would be a huge strain on our economy," Gitis says.

Immigration is key to economic growth, according to some experts. It is the main factor in a Moody's analysis of how many jobs would be created under either Hillary Clinton or Trump.

Here are some of the key questions and answers on the issue as Trump's big speech takes center stage.

Related: Trump's old school: immigration plan would kill 4 million jobs

1. Do undocumented workers take jobs U.S. citizens could have?

The short answer is: Yes, undocumented workers take jobs away from U.S. citizens.

In 2014, the head of the U.S. Civil Rights Commission, Peter Kirsanow, wrote a letter to President Obama, where he argued that undocumented workers hurt job opportunities and wages for low-skilled workers, many of whom are black. Experts agree.

"Undocumented workers are predominantly low-skill, meaning that low-skill workers in the U.S., including a lot of minorities, are worse off because their earnings have been reduced," says George Borjas, a professor at Harvard's Kennedy School of Government.

But that doesn't mean that if all undocumented immigrants were deported, their jobs would be easily filled by U.S. citizens. If all those workers were deported AND all their jobs were filled by U.S. workers, there would still be 4 million unfilled jobs, according to American Action Forum's analysis.

Gitis and Varas estimate that agriculture, construction and leisure industries would be hit the hardest.

Related: 'Without NAFTA, we would be out of business'

2. Are undocumented workers using government services but not paying taxes?

It's a common argument that undocumented immigrants don't pay taxes but benefit from using government resources like public schools and hospitals. Experts say schools for immigrants' children are the biggest drag they bring to tax bases.

However, evidence challenges that stigma, showing that undocumented workers do pay taxes. The Institute on Taxation and Economic Policy found that undocumented immigrants pay nearly $12 billion a year in state and local taxes. California alone pulls in more than $3 billion in tax revenue from its estimated 3 million undocumented immigrants.

Despite paying some taxes, about half of undocumented immigrants don't file for tax returns and the vast majority don't receive Social Security when they're eligible, according to the Migration Policy Institute.

Still, it's hard to know how exactly many undocumented immigrants pay taxes at the state or federal level and how many collect their pay in cash.

Overall, undocumented workers contribute more to state and local taxes than they use up, says Kent Smetters, a University of Pennsylvania economic professor who created the Penn Wharton Budget Model. But he emphasizes that immigrants' tax contributions vary greatly from city to city.

3. What will Trump do to stop undocumented workers from taking Americans' jobs?

One of the ways that Trump says he can force employers not to hire undocumented workers is by using an electronic verification system known as E-Verify that allows employers to check a prospective employee's immigration status before hiring.

Harvard's Borjas believes that E-Verify, if backed by penalties for those who break the rules, could be successful in preventing undocumented immigrants from taking jobs U.S. citizens might apply for.

However, E-Verify has had difficulty gaining acceptance. In Arizona, where it's mandatory for all employers to use E-Verify, CNNMoney has in the past talked to business owners who didn't use it because it was an extra hurdle to the hiring process and business owners found the technology hard to use.

"E-Verify is a very old...policy mechanism with many well known flaws, not least of which that most employers do not want to participate," says Raul Hinojosa-Ojeda, a UCLA professor who has studied the economic impact of immigration reform.

Related: Would Trump be the big winner under his tax plan?

4. What would Trump's immigration policies mean for the economy?

Low skilled workers, particularly African-Americans, would stand to benefit from deportations. Their wages and job opportunities would likely improve because they compete for similar positions, experts say.

Borjas estimates that undocumented workers produce about $10 billion to $12 billion in output for the U.S. economy. But he also argues that this output may be offset by the fact that some don't pay taxes, their children partake of government resources like schools and they also compete for jobs with U.S. citizens.

Outside of low-skilled workers, much of the economy would suffer, other experts argue.

The American Action Forum contends that Trump's policy would cause the economy to shrink by $1 trillion. That accounts for the lost labor and the lost dollars those immigrants would be spending at shops and restaurants in America.

Beyond that, just deporting 11 million people in two years would take up significantly more resources from the government.

Trump says he would triple the number of ICE border patrol agents. Gitis estimates Trump would need to increase the number of agents from roughly 5,000 to over 90,000 to deport them all 11 million immigrants in Trump's two-year time frame.

In some experts' views, Trump's numbers just don't add up.

"The Trump immigration proposals make absolutely no economic sense," says Hinojosa-Ojeda.

Personal Finance


CNNMoney Sponsors