Friday, February 24, 2017

Immigration and Prosperity



Immigration is the dominant story in the news these days. It's an emotional issue: many are understandably afraid of cultural erosion and of Non-Hispanic whites becoming a minority. There is also concern of immigrants taking jobs from native-born Americans.
I am not by any means an open borders advocate, so don't shoot the messenger. But I like to think I'm a realist and there are some hard facts that need to be considered in determining what our immigration policies should be.

A nation's wealth is determined by two factors: the number of people working and the productivity of those workers. Most of us have had the good fortune of living through an extraordinarily fruitful period, roughly from the end of WWII to the early 2000s. Our population more than doubled from 140 million to 320,000. Also, we saw tremendous growth in productivity due to many factors from the GI Bill for returning WWII vets, to increased opportunities for women, to the incredible computer/infotech explosion of the 1980s and 90s.

But today the fertility rate (births minus deaths) has dropped to .4% and is still declining.
And for the past ten years, according to the US Dept. of Labor, the productivity growth rate has averaged 1.1% per year, the lowest in the past seventy years. (I believe the key to reversing that is total reform of our public education system.)

For the past 50 years the number of Americans 65 and older per 100 workers has been in the mid 20s. According to Pew Research that number will climb from 27 this year to 42 in the next 15 years, an increase of 55%, and continue increasing for years after that.

My point is that unless Americans suddenly start reproducing a lot faster (all indicators say not gonna happen) or the productivity rate increases dramatically (a major, new tech breakthrough), the we are going to need immigrants for sustained productivity growth.

So, along with better border control, we need an immigration policy that makes it easier for workers to come here legally, including expansion of the H-1b visas for skilled workers.

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