Why We Should Be Encouraging More Immigration, Not Less

Why We Should Be Encouraging More Immigration, Not Less July 18, 2019

This is an older article from The Economist, not exactly a den of raging liberals, but it sums up one of the key reasons why we should be bringing in more immigrants, not trying to deport them. The economic and fiscal case for more immigration is compelling because of the nation’s demographic realities. White Americans are simply not having enough children to support the previous generations as they begin to retire.

The researchers’ work suggests that recent Census Bureau forecasts for white non-Latino population size are probably biased upward. But even those forecasts suggested that in 2020 there would be 70,000 fewer births than deaths among that population group, with its overall size only sustained in that year by migration. And even accounting for migration, the forecasts predict the white non-Latino population will fall by about a quarter of a million people each year by 2030 and nearly three quarters of a million a year by 2050.

Minorities and migrants are filling the gap. Across America, there were 4.9 Latino births for every Latino death and 1.7 African American births for every death in that demographic group. And even allowing for higher natural population increases amongst minority groups, Census Bureau forecasts suggest that without migration and births to foreign-born mothers, the American population as a whole would decline by about 6m in the period between 2014 and 2060. Migrants are a particularly important factor in sustaining the size of America’s workforce: in 2014, 80% of foreign-born inhabitants were aged 18 to 64 compared to 60% of those native born.

White Americans should be reassured by that. Under current Census Bureau projections, they will account for less than half of the total population within the next three decades: 48% by 2050. But they will make up 60% of the population aged 65 or older. The elderly work at considerably lower rates and rely on public support for health care and welfare payments at far higher rates. That means than non-Latino whites would be particularly at risk from the economic stagnation and budget constraints associated with a declining workforce that would result from lower minority birth rates or harsher limits on immigration.

Social Security has not actually built up a massive trust fund to pay for the retirement of the baby boomers because those payroll taxes that support it are treated as part of the regular budget, so as the baby boomers retire they will rely on those currently working to pay for their benefits. But the succeeding generations are much smaller and there simply won’t be enough workers to do so. That means one of two things, or both: Benefit cuts for those paid into Social Security their entire lives, or a large increase in payroll taxes. We need more workers paying into the system to avoid one or both of those outcomes. Immigration is the only real option.

In addition, studies show that more immigration is great for economic growth, which will help raise tax revenues further.

Economists will tell you that a major impediment to global economic growth is “low labor mobility” — in other words, the fact that it’s really hard to move between countries, largely due to restrictive immigration laws. In the absence of such laws, the theory goes, people would go to wherever the best work opportunities exist, leading to a more efficient matching of workers and firms, and a big increase in those workers’ living standards.

But how big would that increase be? University of Wisconsin’s John Keenan tries to quantify it in a new paper. He builds a model that assumes that in the absence of restrictions, people will try to maximize income while still feeling some attachment to their native countries, and so some but not all workers will move to where their wages will be highest. He estimates that fully eliminating immigration restrictions worldwide would effectively double the world’s labor supply. This, unsurprisingly, leads to enormous economic growth…

Keenan’s findings are in line with previous estimates. Harvard’s Lant Prichett found that removing immigration barriers would double world GDP, an increase of $65 trillion. Let me repeat — $65 trillion. Of course, that isn’t the only consideration here, but the economic evidence weighs heavily in favor of much more liberal immigration regimes.

Without more immigration, the federal government will be starved for revenue, necessitating massive tax increases, steep budget cuts, or both. One could be forgiven for believing that much of the anti-immigration sentiment from the right stems from a desire to make the deep cuts to social services that would inevitably happen. But that’s only part of the story. We must not downplay the importance of old-fashioned racism, xenophobia and nativism as a motivator for anti-immigration views. Why else would those who otherwise would be advocating the economic boom that boosting immigration would unleash?

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