Investing and Immigration Reform

A bipartisan group of US senators as well as a group from the House of Representatives have come up with comprehensive plans to deal with US immigration issues. The fact that everyone seems to be looking at creating a comprehensive solution has business leaders excited and supportive. There are at least eleven million illegal immigrants in the USA and many have lived here for years. Many who entered the country illegally have had jobs, borne children, raised families, and become part of the communities in which they live. Many are also victimized by employers who pay low wages to those without valid papers. For investors there is the issue of investing and immigration reform. Will giving legal status to currently illegal workers raise tax revenues? Will it simply add more burdens to an already stressed social safety net? What specifics about investing and immigration reform will lead to profitable investments and which will not make a difference to the average investor? Where does one start with fundamental analysis on this issue?

The Hispanic Vote and Bipartisan Support on Immigration Issues

Republican efforts to unseat President Obama came to naught in the last election. A large part of that was the large majority of Hispanics who voted Democrat. It may well be that the Republican Party has decided to realign itself on immigration issues in order to garner more Hispanic votes in coming elections. Certainly, the issue of over ten million undocumented persons within the USA is a problem that should have been dealt with much sooner. As with all such issues compromise is necessary on all fronts. If both major parties can come to agreement we may see a wholesale rewriting of immigration law. That could greatly affect the issue of investing and immigration reform as it could make some businesses cheaper to run, some more expensive, some more profitable, and some more likely to lose money. How immigration issue will affect the national budget remains to be seen but that could be central to the issue of investing and immigration reform. Picking new winners in this matter may simply be a matter of looking for companies that process data effectively.

How Fast and How Effective

The President has outlined his plan for immigration reform. It would include illegal immigrants having to register as a first step toward possible citizenship. These people would “submit biometric data” which is code for being finger printed and having your photo taken. Applicants would have to pass background checks and pay fees in order to obtain a “provisional status.” Then “provisionals” would need to wait their place in the immigration line for permanent residency followed by citizenship. Considering the large number of people likely to apply for citizenship using this or whatever process is decided upon, investing and immigration reform may point to profits for those companies that can provide services to streamline this process and make it less expensive. The fact that many business leaders are positive on this matter fits with the assumption that an immigration fix will benefit the country as a whole. Certainly making it easier for immigrants to get work permits could reduce the cost of stopping people at the border. What is a good investment in this area? Look at what economic changes might result and invest accordingly.

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