Construction, Financial Services Industries Stand to Lose if TPS Ends

10/27/2017 03:34 pm ET Updated Oct 27, 2017

By Carlos Guevara and Sabrina Terry, UnidosUS

Before the end of the year the Trump administration will be making decisions on the future of temporary protected status (TPS) designations. This means that the lives of more than 325,000 people—including 250,000 Central American immigrants—now hang in the balance.

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NEGATIVE CONSEQUENCES IN A TIME OF GREAT NEED

The TPS population has a very high labor force participation rate. A recent Center for Migration Studies report found that people with TPS from El Salvador, Honduras, and Haiti have a labor force participation rate that ranges from 81% to 88%, which is well above the rate for the total U.S. population (63%) and the overall foreign-born population (66%). An estimated 51,700 of TPS beneficiaries from these countries work in construction, which by a wide margin is the leading industry employing TPSeanos.

Ending TPS would have negative consequences for many communities. But the effect could be most dire in Texas and South Florida, which have been significantly impacted by Hurricanes Harvey and Irma. It’s estimated that these natural disasters have caused $200 billion worth of property damage, and the recovery process for these regions could take years.

In Texas, nearly 21% of Salvadoran and 24% of Honduran TPS holders work in construction, while in Florida it’s 23% and 29%, respectively. It’s not surprising that the Essential Worker Immigration Coalition, which includes a wide range of business and trade groups such as the U.S. Chamber of Commerce and National Association of Home Builders, recently penned a letter calling on Congress to find a legislative solution for the hundreds of thousands of TPS holders who find themselves in legal limbo.

<em>Source: </em><a rel="nofollow" href="https://www.ilrc.org/sites/default/files/resources/2017-04-18_economic_contributions
Source: ILRC.org

Not surprisingly, the demand for construction labor in these states is high. But according to a recent report by the Washington Post, many construction firms are facing significant challenges finding workers to rebuild. While there are many reasons that may help explain the labor shortages, tightening immigration restrictions may also be making it harder than in the past to find construction workers and other laborers.

A CHILLING EFFECT

A disappearing labor force is enough cause for alarm, but this shifting landscape has also affected how Latinos interact with the police, and whether or not they report crimes.

Earlier this year, Houston Police Chief Art Acevedo released city data that showed a 13% decrease in violent crime reporting by Hispanics in Houston during the first three months of 2017 compared to the first three months of 2016.

This included a 43% drop in the number of Hispanics reporting rape and sexual assault and a 12% decline in reports of aggravated assault and robberies. It’s likely that the chilling effect from increased interior enforcement is also spilling into other areas beyond reporting of crimes, including workforce participation.

It would be economically reckless to end legal protections for work-authorized TPS holders, who are arguably the most vetted populations in the country by virtue of having to submit to criminal background checks at least every 18 months for the past 16 years.

THE EFFECT ON THE FINANCIAL SERVICES INDUSTRY

The decision to end TPS would not only be irresponsible from construction perspective; the ripple effects would also be felt in the financial services sector.

TPS holders are typically low-to-moderate income households with significant roots in our economy. According to the Center for Migration Studies, TPS holders have high levels of labor force participation, low unemployment rates, and have average annual incomes of $34,918. About 30% of TPS holders are homeowners and 11% are business-owners.

Forcing TPS holders into an undocumented status will subject them to deportation and could increase the number of foreclosures in metropolitan areas. As stated in Cornell University’s report, Deporting the American Dream, there is a direct correlation between increases in deportations of undocumented immigrants and increases in foreclosures.

Almost 200,000 Central American TPS holders live in California, Florida, Texas, and New York, and over a fourth (roughly 58,000) of them are estimated to be homeowners. If subjected to immigration enforcement, nearly 30,000 of them are estimated to lose their homes within a year of the designation changes.

The potential loss in tax revenues and property values will further devastate local economies in Florida and Texas that are already struggling to recover from recent natural disasters.

The loss of work authorization will further impact families and financial institutions who rely on TPS recipients. Studies show that there is a 15% difference in wages between undocumented immigrants and immigrants who obtained legal status. This sharp reduction in income will cause families to be at risk of defaulting on other lines of credit, including credit cards, personal loans and auto loans.

It is also common for immigrants who are at risk of deportation to close their bank and retirement accounts as preemptive safety measures from deportation and, in many instances, as means to fund immigration legal services fees. It is highly likely that TPS holders and their families will be at risk of losing the assets they have worked hard to build, and as a result face struggles to make ends meet, as they enter the informal economy.

It is important to note that this sudden financial instability placed on TPS holders and their families will be shared by financial institutions who serve them. Banks, credit unions, and other financial institutions will see significant impacts across their product suite when TPS recipients lose their work authorization. Consider that, as reported by the Center for Migration Studies, TPS recipients from El Salvador, Honduras, and Haiti live in 206,000 households, of which 61,000 of these households (about 30%) have mortgages.

Local economies will also take a huge hit when the small businesses owned by TPS recipients are forced to close. Approximately 22,000 TPS holders from Central America could be forced to close their businesses when they lose work authorization.

Businesses owned by TPS recipients are models of the quintessential American small business. They are important pillars in their communities, and help increase the local tax base by ensuring tax dollars stay within the community. They are also local job creators, employing an average of seven employees each.

Additionally, as many businesses owned by TPS beneficiaries are immigrant-serving ventures, the risk of losing these businesses could lead to patrons who rely on them for specialty goods spending their tax dollars in other communities.

SAVE TPS

Ending TPS negatively impacts families and communities, and goes against our fundamental values of fairness and justice. TPS recipients not only need an extension, but they also need a pathway to a more permanent status in the United States.

We are committed to working toward fair and commonsense administrative and legislative solutions that recognize the important contributions of the more than 325,000 TPSeanos who are at risk of losing these important protections.

FIND OUT MORE

SEE RESOURCES AND WAYS TO GET INVOLVED

Visit the #SaveTPS Campaign website and videos

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