November 25, 2014

Ten ways executive action could benefit undocumented workers

November 25, 2014

On November 20, President Obama announced sweeping executive action on immigration, granting work authorization permits and relief from deportation to undocumented immigrants who have resided in the United States for at least five years and have US-born or legal permanent resident children. An estimated 4 million undocumented immigrants could be eligible for deportation relief.

Two blogs by Urban Institute researchers have addressed the implications of the president’s executive action: one about the effects on children and another about the crucial role of immigrant-serving nonprofits. In this post, I focus on what these policy changes could mean for deferred-action immigrant workers.

Here are 10 ways Obama’s executive action can benefit deferred-action workers:

  1. Higher earnings: Almost all the evidence shows that legalization increases earnings. Effects vary by data set and methodology but results point to earnings gains of 4 to 9 percent over a five-year period.
  2. Greater choices in jobs: Undocumented immigrants concentrate in a few occupations with strong network support and where detection by authorities is less likely. The executive order liberates deferred-action immigrants from these limited choices, allowing them to advance in their careers or change jobs, perhaps moving toward occupations more in tune with their preferences and skills.
  3. Access to licensed occupations: Deferred-action immigrants can now be certified by states to work in licensed occupations—for example, as electricians, construction contractors, home health aides , expanding their economic opportunities.
  4. More business owners: It is difficult for an undocumented immigrant to get a business license and become incorporated. When a business is incorporated, the owner becomes an employee of the business, but undocumented immigrants are not legally permitted to work. With the executive order, deferred-action immigrants may create incorporated businesses, expanding business growth opportunities.
  5. Increased human capital investments: Permanency of US residence has long been associated with more investments in the receiving country. Also, the costs of these investments shrink when immigrants are able to pay in-state tuition for public universities and colleges and are able to access publicly funded training programs.
  6. Improved working conditions: Undocumented immigrants are more likely than other workers to experience employment law violations. They are also more likely to be exposed to occupational health hazards. Without fear of deportation—and with a work permit—these immigrants may feel empowered to come forward and claim their rights either directly to employers or through workers’ rights intermediaries. This will improve their occupational health, reduce wage theft, and move workers from sub-minimum wage to minimum wage.
  7. Increased reward from work: Low-income, deferred-action immigrants will be able to claim the earned income tax credit, which is one of the most effective federal policies to reduce hardship among low-wage workers.
  8. Stabilized income flows: Deferred-action immigrants can get unemployment insurance, the main program to stabilize workers’ income flows and consumption during periods of unemployment.
  9. Better health through state-funded Medicaid: Undocumented immigrants are the largest group left uncovered under the Affordable Care Act. Deferred-action immigrant workers with qualifying incomes may now be covered in some states by state-funded Medicaid, improving workers’ health and productivity.
  10. Better retirement prospects: Deferred-action immigrant workers can participate fully in the Social Security system. An estimated 50 to 80 percent of undocumented immigrants pay into the Social Security system, but do not get benefits when they retire unless they become legalized. Deferred-action immigrants can now pay into the system and get benefits, improving their income in retirement.

Photo: Migrant Mexican farmworkers in Arizona. (AP Photo/Paul Connors)

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