Let's Capitalize on our Largest Advantage

As I've been reading about the immigration debate, one thing that's struck me is how often those who want to deport illegal immigrants (there are 12 million, good luck) and make it harder for them to enter this country use the economic burden argument.  I'm not sure it's warranted.

In a great interview with the Wall Street Journal, Bob Doll, the Chief Equity Strategist of BlackRock (the largest asset manager in the world), talked about the number one advantage we have over the rest of the developed world: population growth.  "Over the next 20 years, the U.S. work force is going to grow by 11%, Europe's going to fall by five, and Japan's going to fall by 17. This alone tells me the U.S. has a huge advantage over Europe and a bigger one over Japan for growth," he says.  Economic growth is determined by the size of the work force multiplied by productivity.  So Japan and Europe will have to realize much larger productivity gains than we will to achieve positive growth.  Advantage U.S.A.

One thing we know is that wealthier societies create fewer babies.  Whether that’s due to women in the workforce or better access to birth control there is a direct correlation between income per capita and birth rates.  But while Eurpore and Japan have a negative fertility rate, the U.S. actually boasts a fertility rate that accounts for about half of that 11% we're expecting.

The other half comes from the ace up our sleeve--we have become an incredibly diverse society.  So a member of any race, culture or religion can emigrate here and find a home.  We can use this enormous advantage to maintain positive population growth for decades and stay ahead of our homogenous competitors, even if our fertility rate falls.

If you see studies about the economic burden of illegal immigrants, be wary.  Some count the cost of educating their children, typically our biggest cost.  I've even seen studies that count children of illegal residents who were born here and are naturalized citizens. We spend money to educate all children, and from that we receive a long-term benefit.  We will benefit greatly from the immigrant children we are educating, just as we always have. 

Also, most studies focus on the lack of taxes this group pays, but that masks their true economic benefit as well.  First, this would be mitigated by making them legal.  Second, they help produce goods that improve the lifestyle of Americans and make us more competitive abroad.  Third, they are consumers pumping money into the economy. 

Finally, are they taking our jobs?  That’s tough to say, but we have been at what economists call “full-employment” during times when we’ve had millions of illegal immigrants.  My guess is that, similar to legal employees, their productivity and innovation create more opportunities and not less.

Our immigration policy should reflect these realities.  We clearly have people who want to be here to the benefit of our nation.  We need to let significantly more people live and work here legally.  We also need a path to amnesty for those already here.  Let’s stop shooting ourselves in the foot.