The Rising Cost of Inaction on DACA

Since 2012, the Deferred Action for Childhood Arrivals (DACA) policy has allowed law-abiding undocumented youth the ability to work in the United States. Given this chance, DACA recipients have contributed billions of dollars to the U.S. economy through their labor and skills. In 2015 alone, DACA-eligible workers earned almost $19.9 billion and paid $3 billion in federal, state, and local taxes. What’s more, they wield significant consumer power—more than $16.8 billion in 2015—stimulating economic activity and supporting local businesses.

However, the termination of DACA on September 5, 2017 has thrown these lives and livelihoods into uncertainty, from almost expiring completely by March 5, to now being allowed by a court injunction to offer renewals but not new applications. Under the current situation, more than 32,000 DACA holders’ protections are set to expire between March and the end of May. Of these, less than 15,000 are likely to have filed for renewal.[1] This means that an average of 207 DACA recipients are expected to lose status every day in the next two months. An economic disruption of this size would mean a direct loss of more than $856,000 in wages and more than $132,000 in lost tax revenue. This shows that continued inaction on DACA will have significant economic costs, which will multiply each passing day. Using data from the Census Bureau and past research on costs to employers of this sort of economic disruption, we estimate that:

Each day until the end of May…

  • …an average of $12,063 is lost in DACA-recipients’ incomes, of which $878 would have gone to pay federal taxes.
  • …companies incur re-staffing costs totaling up to $372,828.
  • …about 41 DACA-recipient homeowners would lose their status. Together, on average, they would hold more than $7.5 million worth of residential real estate.

Each week until the end of May…

  • …$71,533 of DACA recipients’ spending power is lost, hurting local businesses.
  • …an average of $6,977 in state and local taxes is no longer paid by DACA recipients who lost their ability to work legally.

By the end of May…

  • …$85,004 that DACA recipients would have contributed to the Social Security fund is lost.
  • …$20,230 that DACA recipients would have contributed to the Medicare fund is lost.
  • …438 businesses owned by DACA recipients would suffer the loss of its owner, potentially causing them to close and putting other U.S. workers out of work.

[1] Politico reports that by January 31, 4,470 renewals were filed for DACA protections expiring in March and only 5,000 of those expiring in April and May were filed for renewal. We assume that for February the an additional 5,000 were filed for those expiring in April and May.

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New American Economy is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans. More…