Undocumented Americans Emigrate

The legal immigration system admits about 1.1 million people a year. Immigration quota backlogs keep this number constant and close to that number every year.

As recently as 2006, about 700,000 undocumented immigrants added to that flow. But, in 2007, there was a dramatic reversal of this trend. According to the census bureau, only about 500,000 people documented and undocumented immigrated to the United States in 2007, compared to 1.8 million in 2006. This means that a net of about 600,000 undocumented Americans left the U.S. in 2007. In Colorado, the total estimated foreign born population declined by 0.9%, which means that more undocumented immigrants left the U.S. than there were legal immigrants who entered the state.

Presumably, this is driven by the decline in the U.S. economy generally, and the undocumented immigrant intensive construction sector in particular. Given the state of the economy so far in 2008 and the prospects for the U.S. economy in 2009, we are likely to see two more years of emigration by undocumented Americans.

This may rob the immigration issue of the pressure that it has seen in recent years. Immigration hasn't been the number one issue for many years. But, an important and vocal minority of voters, who are often disaffected from either major political party, care a great deal about the issue. A talked with one likely Obama voter while canvasing explain his concerns about this issue (and related ones) for about fifteen minutes. I have a politically active neighbor who feels the same way. And, no issue more frequently garners fierce reactions to otherwise routine stories on comment pages of the online Denver Post and Rocky Mountain News.

State and local governments have tried to address the issue. Colorado recently had a special session of the legislature addressing these issues, and Denver voters cast votes on a ballot issue this summer targeted at illegal immigration. But, the President and Congress are the dominant players on this issue.

How will this play out politically?

Tax collection changes are one likely place this could have an impact.

Cheap labor conservatives will lose clout, because their industries, particularly construction, are weak. In these industries, most undocumented immigrants operate as independent contractors, often through corporations, which don't have to be issued a 1099 when they provide services. If these corporations were 1099'd, they would have to report the income on federal tax returns, drying up a big hunk of the small business tax gap, while at the same time reducing the economic incentive to hire undocumented immigrants in these industries.

Also, given that Democrats will control Congress, facially neutral tax gap measures that have an incidental, even if significant impact on immigration, is likely to be more popular than an immigration specific measure.

We also may expect to see legislation requiring subcontractors to certify in detail immigration compliance for the general contractors that hire them.