Citizenship: A New Strategy for Financial Inclusion and Inclusive Economic Growth

 

Yet, translating America's immigration policy into one that spurs growth, empowerment and progress will take federal reforms--and that will take time. But outside the politicized debate we're so accustomed to hearing, there is an easy action that frustrated local leaders can take to both abet and benefit from almost 9 million immigrants, a majority of whom are low-income: empower eligible legal permanent residents apply for citizenship.

 

Legal permanent residents who become citizens realize an eight to 11 percent increase in individual earnings in the years immediately after they naturalize, as well as gain the right to vote and the opportunity for better paying jobs and educational scholarships. It is rare that such a relatively simple solution exists to combat a major economic challenge and lift the low-income community. Citizenship is an economic asset -- for the individual and the economy - and we can make it far simpler for eligible candidates to overcome the language, financial, administrative and information barriers stopping them from applying.

 

That's why Citi Community Development has committed more than $1 million to a partnership with the mayors of New York City, Los Angeles and Chicago, as well as the Center for Popular Democracy and National Partnership for New Americans, called Cities for Citizenship. The campaign will deliver financial counseling, legal support, application guidance, naturalization test preparation and other assistance that is essential for low income U.S. permanent residents, who pay taxes and work lawfully, to become citizens.

 

These programs supporting achieving citizenship includes a range of initiatives by the partner cities, including outreach and legal support resources, access to financial counseling, so that immigrants can, for example, build a positive credit profile or open a banking account. Citi's support will enables immigrants to build a valuable financial identity as they secure a new national identity. This is critical since the Federal Deposit Insurance Corporation reports about 20% of foreign-born households have never had a bank account, driving immigrants to use alternative financial services that often come with higher costs and risks. Instead, Cities for Citizenship aims to build a foundation for the American Dream.

 

And, we're just getting started. This campaign aims to bring more cities on board and we think the economic benefits will be profound.

 

If America's 8.8 million eligible legal permanent residents became citizens, they'd provide a $37 billion to $52 billion boost to the national economy over the next ten years, according to the Center for the Study of Immigration Integration at USC. The revenue potential would add up to $4.1 billion to New York City's economy, $2.8 billion to the Los Angeles economy, and up to $1.6 billion to Chicago's economy. In part, that's because immigrants are 30% more likely to start a business compared with U.S.-born counterparts. It's also due to their sheer number: There were 10 million immigrants in the U.S. in 1950, a number that quadrupled by 2010, based on data compiled by Audrey Singer at The Brookings Institution. Moreover, nine unexpected metropolitan areas have experienced a doubling of their foreign-born population in the last decade: Scranton, Indianapolis, Louisville, Knoxville, Birmingham, Jackson, Cape Coral-Fort Myers, Little Rock, and Nashville-Davidson. This shows how the economic potential of immigrants is expanding. Plus, by naturalizing, immigrants could earn, on average, 45% more, according to the Economic Policy Institute, and have access to scholarships for education, among other benefits.

 

In other words, more citizens will lead to more economic growth in the central drivers of U.S. GDP - our cities.

 

We recognize that citizenship is a first step. College education, home ownership, small business engagement, workforce training and the recognition of foreign professional credential should be the next focus.

 

But, this will be an important first step for millions of immigrants to build foundational assets for economic prosperity.