The economic impact of SB4

It could be big.

Representatives from Texas’ business, local government and higher education sectors argued Tuesday that the state’s new immigration-enforcement law, which is slated to take effect Sept. 1, could do billions of dollars in damage to the Texas economy.

Using data from the 2015 American Community Survey and the Bureau of Economic Analysis, the Reform Immigration for Texas Alliance — a group made up of 40 state-based immigrant and civil rights groups — estimated during a Tuesday press conference that the state stands to lose roughly $223 million in state and local taxes and more than $5 billion in gross domestic product under Senate Bill 4.

The law, which was signed by Gov. Greg Abbott in May and seeks to outlaw “sanctuary” jurisdictions that don’t cooperate with federal immigration officials, would also allow local police officers to ask about a person’s immigration status when they are detained — not just when they are charged with a crime.

“We estimate those costs as they relate to jobs, earnings, taxes and GDP if 10 percent of undocumented immigrants were to leave Texas,” the group said, calling that 10 percent figure a conservative estimate. The group analyzed the top 10 industries that benefit from undocumented labor and used Harvard University economist George Borjas‘ undocumented population analysis in its research, according to the methodology outlined in the study.


The economic argument isn’t a new one for opponents of the law; several Democratic state lawmakers tried and failed to convince their colleagues of its merit during this spring’s regular legislative session. State Democrats also called for an update to a study released in 2006 by former Texas Comptroller Carole Keeton Strayhorn. That analysis showed that undocumented immigrants who lived in Texas in 2005 added $17.7 billion to the state’s economy.

In a statement Tuesday, representatives from local chambers of commerce at the news conference went after the lawmakers who championed the legislation, calling them dishonorable.

“Each of you standing with us have a big job to do,” said Ramiro Cavazos, the CEO of San Antonio’s Hispanic Chamber of Commerce. “And that it is to protect this economy for our children and our grandchildren.”

The Houston Hispanic Chamber of Commerce, the U.S. Bilateral African American Chamber, the United Chamber of Commerce Corpus Christi and the Rio Grande Valley Chamber of Commerce were among those represented at the news conference.

The Chron adds some details.

Paul Puente, executive secretary of the Houston Gulf Coast Building and Construction Trades Council, said many undocumented construction workers are already packing up and leaving with their families to neighboring states such as Oklahoma and Louisiana ahead of SB4’s implementation on Sept. 1.

An analysis of data from the U.S. Census, the Bureau of Economic Analysis and the Institute on Taxation and Economic Policy found that if 10 percent of undocumented immigrants leave Texas, the state would forfeit about $190.7 million in federal tax revenue and $223.5 million more in state and local taxes.

The disappearance of those estimated 95,000 undocumented workers would also result in nearly $2.9 billion in lost wage earnings. The analysis also found that the state would lose an additional 70,000 jobs dependent on undocumented consumers, with an estimated $2.4 billion more in lost wages.

The researchers said the ripple effect throughout the economy could reach between $9.2 billion and $13.8 billion.

That’s a lot of money, and it doesn’t include things like tourism and conferences. You can dispute the figures if you’d like, but the broader point is that maybe it’s a bad idea to pass a law like this that so many people think with justification will hurt themselves, those close to them, and the state as a whole. There was plenty of testimony to this effect in the hearings, from law enforcement and religious groups and business interests and just plain folks, and there’s the lived experience of other states who have done this. It was just that the Republican majority refused to listen. And that job that Ramiro Cavazos mentioned that we all have to do includes remembering who supported and who opposed this terrible law when the next elections roll around. The Current has more.

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15 Responses to The economic impact of SB4

  1. Bill Daniels says:

    No one seems to be factoring in the possibility that non working Americans on welfare will replace those illegal workers on the job site. Workfare requirements for those receiving government aid should trim welfare rolls, which is good for the taxpayers, good for those Americans looking for work, and good for entry level wages.

    It will increase the cost of goods, as wages rise, but could help decrease taxes, as fewer Americans collect welfare.

    And finally, what kind of argument is this anyway? Do we calculate the value to the economy that drug cartels bring, and use that as an argument to not arrest drug dealers? Cartels provide jobs, and some of the money they make gets spent in the local economy, so it’s good for all kinds of businesses, restaurants, car dealers, etc. Maybe we need to help the economy by not arresting and jailing drug dealers.

  2. C.L. says:

    @Bill… I’m confused. Didn’t POTUS lift some visa restrictions the other day because he could get enough American [those on welfare and those not, apparently] applicants ?

  3. Bill Daniels says:


    Valid criticism, and Trump is wrong on that issue.

  4. voter_worker says:

    Bill, you’re naive to believe that unemployed citizens will flock to make up the labor shortage. Do you think just anyone can show up at a construction site, farm, meatpacking plant or any job for that matter and be qualified for hire? Then last through the first week without quitting or being fired? For Pete’s sake, Trump Vineyards wants to import workers from Europe, not West Virginia. Why would they do that?

  5. C.L. says:

    @Bill…. Abbott or POTUS thinking the elimination of non-documented workers is somehow going to result in a flood of previously unemployed ‘real Americans’ replacing the skilled laborers and going on the tax rolls is a (crack) pipe dream.

  6. Bill Daniels says:

    Voter and C.L.:

    Cut off the gravy train and people will be FORCED to work. It will be an adjustment, a rude awakening, and there will be a period of adjustment for both employers who will have to suffer through crappy employees getting up to speed, and for the chronically unemployed themselves, as they learn, probably for the first time, about work ethic. There will be a period of reduced productivity and higher costs for employers, and there will be a bunch of resentful citizens who don’t want to get up early and do work they find unpleasant who get hired and fired multiple times before they finally figure out the free ride is over.

    To quote JFK, “we do these things, not because they are easy, but because they are hard.” Forcing able bodied people to work to support themselves is the hard thing. Continuing to pay them to sit around and play dominoes is the easy thing.

  7. neither here nor there says:

    “Sit around and play dominoes” Bill I have to give you credit you don’t miss a chance to make the same point,

    Next time maybe people sitting around using oxycodone

    It paints a different picture in people’s minds.

    Have a great Bill, yoga relieves stress

  8. C.L. says:

    Isn’t there a reason they’re unemployed to begin with ? Are you assuming most of the folks on welfare are able bodied, skilled laborers ? I don’t know about you, but I’m not a fan of a 60 yr old disabled white woman framing houses or doing neighborhood yard work.

  9. Bill Daniels says:


    First, they are not, generally, skilled laborers, which means they are qualified for jobs like “sandwich artist” at Subway, helpers and flagmen at construction sites, dishwashers, housekeepers, waiters….entry level jobs. And that 69 year old disabled woman? You know what she can do? Child care for the 19 year old with 3 kids on Medicaid and no baby daddy, so that 19 year old can go be a flagman, dishwasher, or sandwich artist. She can also watch the two kids that belong to the 26 year old mother who also has no baby daddy in the picture at the same time, so that 26 year old can also go work.

  10. Ross says:

    @Bill, no one makes enough money on welfare to just hang around all day. And, welfare is not just one program that passes out free money to anyone who “qualifies” The largest welfare program is SNAP, which used to be called food stamps. An able bodied adult who isn’t working can claim SNAP for 3 months out of 3 years. The average SNAP benefit for a family of 4 is $465, according to something I read earlier today.

    The folks on the various welfare programs do work, and at the types of jobs you described above. The problem is they don’t get enough hours to earn enough to get off of welfare, or jobs are scarce, or there is no child care available. The largest part of the benefit goes to children.

  11. Commenter1 says:


    “Watching three little kids is less physically demanding than a being a sandwich artist” –said NO mom EVER!

    A word of advice: don’t repeat this to ANY mom you might know.

  12. Bill Daniels says:


    Believe me, I’m not denigrating the value of child care. What I am doing, though, is offering a solution to women who have kids they have no chance of supporting, then using that as an excuse for why they can’t work. Let that 60 year old woman take care of those kids so we can insist that the woman who had kids go work at a paid gig. Too many women look at having a few kids AS their paid job, the job that provides them housing, food, medical care, etc., courtesy of the taxpayers.

    Have a gander at this:

    Back then, the Democrats knew and admitted that social policy that subsidized failure, subsidized single family households, and basically subsidized poverty was bad, long term, for poor people, especially for poor people “of color.”

    I think anyone who is intellectually honest still knows this, but progressives seem to support keeping poor people poor, by supporting the policies that encourage that.

  13. neither here nor there says:

    Never miss a chance to belittle the people of “color” right Bill. Keep repeating and maybe you could convince yourself that your life is yours to blame or take credit for.

  14. Bill Daniels says:


    In case you didn’t know, the report I referenced was created by the Dems. Dems came up with those conclusions that I referenced, not Pubs, not libertarians, not Trump, and not Bill. Also, you completely ignore the fact that more whites are on welfare than brown people, and the same welfare plantation that keeps poor brown people down also keeps poor whites down.

    Having said all that, Trump’s immigration crackdown is ALREADY having a positive effect on the brown people of Texas and other states, via higher wages for citizen workers. You’re gonna have an 8 year temper tantrum screaming that Trump and his pro-America loyalists hate brown people, all the while we are going to be improving the lives of brown people. The cognitive dissonance is truly astounding here. At some point, a thank you would be in order.

    Article about higher wages for construction, an industry overwhelmingly represented by…..yeah, brown people.

  15. neither here nor there says:

    You quote a site known for really fake news Bill and I seriously doubt that you read the report. They don’t even use the term “People of Color”

    I didn’t ignore anything Bill, you added words that I did not write. But that is typical of most racists and bigots, I am not stating that you are one, as I don’t know that for sure, but I believe you are.

    I won’t have a 8 year temper tantrum Bill, you do that, with your constant hate of brown people, but I admit that you use the term “Illegal” and recently “Undocumented” to say the same thing.

    Bill constructions costs were going up that is just the racists and bigots at Breitbart spreading their hate. You do know that they tend to have nasty pop up ads appear.

    In fact they may have been working with the Russians, they are traitors in my book just like all Trump supporters, I admit that some of those supporters are just ignorant. They are being investigated by the FBI.

    By the way Bill the reason costs are going up is because of Trump, companies are raising the cost of material;

    Yes Thank Trump for making homes more expensive Bill.

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