What Would the End of DACA Mean for the Economy?

The health of the United States’ economy is largely determined by the actions of the President and those appointed by him. Ever since Donald Trump’s presidency began, the country has held its breath watching the decisions he has made on behalf the U.S. people, hoping for the best.

Most recently, one of President Trump’s decisions is putting the country at risk of a huge economic decline. A few weeks ago, Trump chose to end the Deferred Action for Child Arrivals (DACA) program, which was put in place by Barack Obama to protect the children of immigrants who came illegally, from being deported. This decision would affect about 800,000 “dreamers” in the U.S.

While the DACA program’s future is still not officially decided, if no supplemental program is put into effect, the loss of all those jobs plus the government expenses could be detrimental to the economy. A study conducted by the CATO Institute concluded that the cost the federal government alone would suffer from deportation efforts over the next 10 years would total at least $60 billion. The overall economic impact would be over $200 billion.

In addition to the governmental costs that the end of DACA would bring, the U.S. GDP would also take a hit. The Center for American Progress conducted a study finding that without the DACA workers, the GDP would decline by $433 billion over the next 10 years.

This decline would be felt in certain parts of the country more than others. California, for example, employs about 188,000 DACA workers. If the program was terminated, the GDP in California alone would suffer a loss of $11.3 billion a year. Texas would lose $6.1 billion per year, and North Carolina would lose $1.9 billion a year.

FWD, a pro-immigration reform group, conducted a study finding that 91% of DACA recipients are employed. Many employers of Fortune 500 companies have been stepping forward defending the DACA program and advocating for Congress to put a stop to Trump’s movement. As Microsoft President, Brad Smith stated via a blog post, “These employees, along with other DREAMers, should continue to have the opportunity to make meaningful contributions to our country’s strength and prosperity.” He admitted that Microsoft knows of at least 27 employees who are DACA beneficiaries, including engineers, finance professionals and sales associates.

The White House has enacted a six-month delay to the end of the program to give Congress time to act and hopefully come up with another solution. Until then, dreamers will continue to protest, advocate and fight to keep their rights and avoid the eventual economic decline that would come from the end of DACA.

What Does the Fall of Retail Mean for the Country’s GDP?

It is no secret that consumer spending has shifted in the recent economic climate. Brick-and-mortar retailers are suffering under the pressure from e-commerce sites like Amazon. In the past year alone, there have been countless stories of Big Box retailers like Macy’s, JCPenny and more closing stores in an effort to remain profitable.

But does the fall of retail spending mean the fall of consumer spending altogether? Will the country’s GDP will be affected? While these are valid questions, the answer, in short, is probably not. Unfortunately, if the economy were that easy to predict, we probably wouldn’t have had the economic recessions that we have in recent years.

According to AP, consumer spending in the U.S. rose 0.1 percent in April, 0.2 percent in May and June, and 0.3 percent in July. These increases occurred in tandem with a 0.4 percent increase in incomes in June and a 0.5 percent rise in wages and salaries in July. Though these increases in consumer spending have been slight, the addition of the increases in income and wages is another good sign for the overall GDP of the country.

In 2017, the GDP has been rising consistently overall. According to Reuters, there was a 1.2 percent growth pace from January-March. With the increased consumer spending in the following months, GDP increased at a 3.0 percent rate from April-June.

Even with the growth of both consumer spending and the GDP in the US, some people are still concerned about the country’s economic activity overall. Consumer spending alone accounts for about 70 percent of the country’s overall GDP, according to economists, and those who are skeptical about the small growth numbers say it is not enough to evoke enough confidence for the future.

While consumers may not be spending their money on retail like they once were, the fact is they’re still spending that money somewhere. Some say healthcare spending has taken the place of retail spending for many, while some say the shift is in millennials wanting to spend their money on experiences, rather than material goods.

Regardless of the exact cause of the recent fall of the retail industry, consumers are still finding things to spend their money on, and that is the most important thing to maintain the health of the economy. As long as the overall GDP continues to rise and consumer spending is a contributor to that, the country is on a path to continue growing and prospering.