Refugees Make America Better Off

Vietnamese refugee Tran Di Thuong (R) is welcomed by his brother Tran Truong (C) after arriving at … [+] San Francisco airport from Hong Kong. Tran Di Thuong worked for US Special Forces during the Vietnam war. (MONICA M. DAVEY/AFP via Getty Images)

AFP via Getty Images

Those restricting the entry of refugees and asylum seekers are wrong to argue humanitarian admissions make America poorer. New research shows refugees and asylum seekers make the United States better off.

Background: The Trump administration, including the president and his chief immigration advisor Stephen Miller, argued admitting refugees was bad for America. Donald Trump may have been the only president in U.S. history to deliver speeches vilifying refugees. Past presidents regularly extolled America’s role as a place of safety for those persecuted abroad. Cliff Sims, a Trump communication aide, said Stephen Miller told him: “I would be happy if not a single refugee foot ever again touched American soil.”

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As Michael Clemens, an economist at the Center for Global Development, discusses in an important paper, Trump and Miller translated their beliefs on refugees into the largest reduction in refugees in U.S. history—and the negative consequences to America will be long-lasting.

Clemens calculates an 86% decline in refugee arrivals between FY 2016 and FY 2020 due to Trump administration policies. Clemens is on the mark: a National Foundation for American Policy (NFAP) analysis found if, between FY 2017 and FY 2021, annual refugee arrivals had remained at the FY 2016 level of 85,000, nearly 300,000 more refugees would have arrived in the United States during those five years.

Clemens notes the number of asylum seekers—those who apply for protection inside the United States—also experienced a significant decline during the Trump administration. He identified a 68% drop in affirmative asylum applications between March 2017 and September 2019. The administration also restricted the likelihood of approval for individuals who applied for asylum as a defense against deportation.

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Cutting Refugee Admissions Harms Americans: Clemens found restricting the number of refugees and asylum seekers harmed the U.S. economy and government finances. “Beyond claiming a need for protection, refugees and asylum seekers are economic actors,” writes Clemens. “All are consumers, most are (or become) workers, and many are (or become) investors. All incur fiscal costs by using public services directly or indirectly, and all generate fiscal revenue either directly or indirectly.

“A policy of reducing their numbers must have economic ripple effects. Estimating such effects is different from assessing the overall merit of the policy, given its many non-economic effects. A policy causing large reductions in immigration in general creates large negative effects on the overall economy and on the fiscal balance of government. There is no meaningful controversy in the economic literature about this general, qualitative conclusion.”

What Did Clemens Find?: “Today there are roughly 295,000 refugees ‘missing’ from the U.S. population due to the 86% reduction in refugee resettlement starting in 2017—those who would be present now if refugee admissions during 2017–2021 had stayed at their 2016 levels,” according to Clemens. “These missing refugees cost the overall U.S. economy over $9.1 billion each year ($30,962 per missing refugee per year, on average) and cost public coffers at all levels of government over $2.0 billion each year ($6,844 per missing refugee per year, on average).

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“These costs would continue permanently even if refugee inflows this year returned to their 2016 levels—because that would not replace the number ‘missing’ from the population due to earlier reduced inflows. Put differently, relative to 2019 levels, a 10 percent reduction in refugee resettlement to the United States likely causes a loss to the American economy of more than $1.4 billion, and a loss to public coffers (federal, state, and local) of more than $310 million, cumulatively over the subsequent five years.

“Turning to asylum seekers: A 10 percent reduction in affirmative and defensive asylum seekers likely causes a loss to the American economy of more than $8.9 billion, and a loss to public coffers of more than $1.5 billion, cumulatively over the subsequent five years.” (Emphasis added.)

During the Trump administration, the Department of Health and Human Services (HSS) completed a study that concluded, “Overall, this report estimated that the net fiscal impact of refugees was positive over the 10-year period, at $63 billion.” However, the New York Times reported that White House immigration adviser Stephen Miller intervened to block the release of the positive findings, although they were leaked to the media.

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Clemens points out the HHS report and others that use the “accounting” approach understate the positive fiscal effects of refugees because “they fail to account for any of the effects of refugees on the rest of the economy.” He notes that “hiring migrant workers raises the value of firms’ future stream of capital income” but using the “accounting” approach only considers taxes paid directly by refugees.

Are There Other Ways The Positive Impacts of Refugees Are Understated?: Nearly all studies on refugees may understate the positive impact of refugees due to limitations in the data. For example, it is difficult to include the impact of refugees who make significant individual contributions to the U.S. economy.

Andy Grove came to America after the 1956 Hungarian Revolution and went on to cofound—and then lead—the Intel Corporation, which helped propel America’s tech economy and create jobs, tax revenue and shareholder wealth. Another refugee, Sergey Brin, cofounded Google, a company that also has contributed to the U.S. economy. Google (Alphabet) has more than 150,000 employees and is valued today at over $1.4 trillion. Al Goldstein entered America as a refugee and has founded two companies—Avant and Amount—that are valued at over $1 billion each and employ more 1,000 people combined.

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The Fiscal, Economic And Security Arguments: The research by Michael Clemens shows claims that refugees will harm the U.S. economy or taxpayers are untrue. The security argument against refugees is also inaccurate.

“It is in America’s national security, foreign policy and economic interests to welcome refugees and it can be done without harming national security,” according to Elizabeth Neumann, former assistant secretary for counterterrorism and threat prevention at the Department of Homeland Security, in an NFAP report. “Over the last two decades, security and law enforcement professionals at all levels have worked to establish, improve and utilize robust security and vetting procedures for individuals admitted as refugees to the United States. These policies and procedures have been reviewed, enhanced and strengthened repeatedly.”

At a recent Mercatus Center event organized by Shikha Dalmia, editor of The UnPopulist, Michael Clemens said, “Economically an immigration restriction is a government ban on a wide variety of economic activities by natives. I just want to repeat that: An immigration restriction is a wide-ranging government ban on economic activities by natives of the country of migrant destination. This is something that’s not often appreciated . . . it’s just a fact about how the economy works.”

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Over the decades, the United States has admitted refugees because it serves humanitarian and foreign policy objectives. Some oppose such admissions by arguing refugees would harm the U.S. economy or taxpayer finances. The research from Michael Clemens shows admitting refugees is consistent with the traditions of America’s founding and helps the country’s economy.