With immigration on the minds of many voters in the run-up to this November’s presidential election, the U.S.-based financial services company Standard & Poor’s released Thursday some surprising information.
The widely-held notion that immigrants bring down a city’s credit rating --because they are less educated, low income or both-- is refuted by a report by Standard & Poor’s, which shows that U.S. cities with "significant immigration" saw their credit ratings improve over the last decade.
"To make a case that immigration causes governments to go broke or jurisdictions to have budget overruns is a simplistic argument," Horacio Aldrete-Sánchez, a senior director in state and local government ratings for S&P and an author of the report, told Bloomberg. "There are undoubtedly costs to these governments, but there is also an overall increase in economic activity and a stabilizing impact on the labor markets."
Regardless of whether foreign immigration or domestic migration, as long as there is population growth that seems to be the one factor that drives economic activity.
- Horacio Aldrete-Sánchez, a senior director in state and local government ratings for S&P
The report states that, contrary to the common belief, cities with large number of foreign born people saw their tax bases grow and per-capita income increase.
Standard & Poor’s analyzed cities that saw large influxes of immigrants between 2000 and 2010 as well as metropolitan areas that saw rapid population growth due to domestic migration.
The report appears to counter arguments made by some immigration critics that immigrants chew up state and local government funds and take jobs from U.S.-born workers, thus hurting local economies. It also gives impetus to cities like Dayton, Ohio that are bucking the trend of strict immigration laws in states like Arizona and Alabama and openly welcoming immigrants to their towns.
"I think what you’ll find is that other states and cities are reacting to a perceived problem instead of being proactive," said Dayton’s Mayor Gary Letizell to Fox News Latino.
Analysts at Standard and Poor’s said that while it is difficult to single out the impact immigrants have on local governments, no city that has seen a large arrival of immigrants has seen its municipal credit rating downgraded because of the inflow.
"Regardless of whether foreign immigration or domestic migration, as long as there is population growth that seems to be the one factor that drives economic activity," Aldrete- Sánchez said.