08/13/2013 02:14 pm ET Updated Oct 13, 2013

Texas, Immigrants and Economic Growth

By Andrew Geraghty, Program Assistant, U.S. Democracy Program, Carnegie Corporation of New York

Everything's bigger in Texas. The state that brought us the 72-ounce steak dinner holds some obscure records, including the largest Frito pie, the dog with the biggest eyeballs, and the longest filibuster (43 hours) by an American politician.

With the economy still crawling toward recovery, it's something else Texas does big that is most impressive: economic growth. In 2012, the Texas economy grew almost twice as much as the rest of the country. While the state's lucrative energy industry played a major role in growing its economy by 4.8 percent last year, economists and others are also crediting the state's 4.2 million immigrants and their outsize contribution to the labor force. Roughly 16 percent of Texans are immigrants, but they make up nearly 22 percent of the labor force and account for 37 percent of the labor force growth since 2003.

Among those praising the contributions of immigrants to the economy is former President George W. Bush. Last month, at his newly created presidential center in Dallas, the former president hosted a naturalization ceremony for 20 new Americans followed by a series of panel discussions on immigrants and the economy. In his remarks to the new Americans, Bush reflected on the contributions of immigrants. "Each generation of Americans -- of immigrants -- brings a renewal to our national character and adds vitality to our culture. Newcomers have a special way of appreciating the opportunities of America, and when they seize those opportunities, our whole nation benefits."

Those benefits become more pronounced as immigrants lay down roots and move through the integration process from temporary visa holder to legal permanent resident to naturalized citizen. Speaking on one of the panels, Manuel Pastor, professor of sociology and American studies and ethnicity at the University of Southern California, made clear just how much immigrants--and the economy, in turn -- stand to gain. "Citizens made about eight-to-eleven percent more than non-citizens simply by virtue of becoming citizens," he said, referring to his research on the personal income of immigrants. In addition to the bump in earnings that comes with citizenship, Pastor found that immigrants who learn English -- one of the requirements for those seeking citizenship -- can expect an additional 15 percent boost in wages.

In addition, these increased earnings are passed on to all Americans as new citizens use their increased buying power to purchase homes and cars, start businesses, and pay more in income taxes. According to data on the Bush Center website, immigrants created one-third of all new small businesses between 1990 and 2010, and in 2007, immigrant-owned businesses employed 4.7 million workers and generated $776 billion in sales.

With immigration reform back on the national agenda, economists are scrutinizing current policy and the implications of proposed reforms. Regional Economic Models, Inc. (REMI), a nonpartisan, fiscal policy consulting firm, reviewed the immigration bill passed by the Senate earlier this summer and projected job gains and economic growth in all 50 states. Nationally, the company's analysis showed that putting undocumented immigrants on a pathway to citizenship would add 594,000 net new jobs and increase gross domestic product by nearly $50 billion by 2018. The legislation would also increase the number of visas offered for high-skill jobs, agricultural jobs, and other low-skill labor. REMI estimated this would create more than a million net new jobs and increase gross domestic product by approximately $200 billion by 2045. (The study was funded by Carnegie Corporation of New York, the Ford Foundation, and Unbound Philanthropy.)

But whether or not the country will take advantage of all that immigrants have to offer the economy is up to Congress, where immigration reform is in a holding pattern until policymakers return from the August recess. While Texas may do economic growth -- like Frito pie -- bigger than the rest of the country, it can't grow the country's economy on its own. To jumpstart the economic recovery, the country needs comprehensive immigration reform that will harness the full strength of immigrants.