Our Economy Needs More Immigrants — Not Less

Since 1994, The Advocates for Human Rights has been working to dispel myths about immigration by bringing the facts into the public debate. Guest blogger and board member Steve Carlson, former Deputy Commissioner of Commerce for the State of Minnesota, helps put questions about the impact of immigrant workers on Minnesota’s economy in context.

There is a myth that immigration is hurting our economy. Some say that the 1 million immigrants that have come to the United States each year for more than 25 years are an economic problem. I would suggest instead that immigrants are essential. Without them, our economy would barely grow. It would stagnate.

Without immigrants and their children, the U.S. population would only be growing slightly more than 1 million people per year. With them, growth is more like 2.3 million people per year. Without more workers, our national income (GDP) is unlikely to grow more than a trickle.

The non-partisan Congressional Budget Office (CBO) projected in January that GDP growth for the next decade will likely be only 2 percent per year, much below rates from 1946–2006. And the CBO assumes that 1 million immigrants will continue to arrive each year. Without them, GDP growth would fall by about a quarter, to 1.5 percent per year. This is substantially less than President Trump’s promise of 3–4 percent. At 1.5 percent growth, Americans would feel economic hardship. Hope for the future would wither.

Here are a few more facts (not myths) to consider:

  • The foreign born are more likely to be working than native-born Americans. They are 17 percent of the U.S. workforce, but only 13 percent of our population.
  • Unauthorized immigrants are even more likely to be working than all other U.S. workers. They constitute about 5 percent of the U.S. workforce (8 million).
  • The U.S. population is aging. People will be retiring from the workforce faster than young people enter it. Forecasters are projecting worker shortages.
  • Medicare and Social Security are running out of money, as benefits paid out each year exceed contributions. A growing workforce would strengthen both programs.
  • Unemployment is currently about 4.5 percent. This is close to “full employment” according to the Federal Reserve. Some sectors are already facing worker shortages. Unemployment for college graduates is only about 2.4 percent.
  • Immigrants are more likely than U.S. citizens to start new businesses.

These are simply a few of the facts which suggest that we need to encourage more immigration for economic reasons. There are of course a few others which might encourage less immigration. One such argument has been concern about reduced income for U.S. workers because of immigration. This is a complex question about which much has been written on both sides.

The question has two parts: 1) do immigrants take jobs away from U.S. workers? 2) would wages rise if there were fewer immigrants?

For the first question, it is difficult to find definitive data that proves immigrants are taking jobs U.S. workers want or could perform. Some of the work immigrants undertake in agriculture, restaurants and health care, for example, are jobs that have often been taken by immigrants for a variety of reasons, including relatively low wages. Other positions require engineering and other technical skills that are in short supply among American workers. These are far from complete answers, but the relatively low current rates of unemployment imply that immigrants are not taking jobs away.

For the second question, it is certainly true that if there were fewer workers available to do certain jobs (up to a point), then wages for those jobs should rise (also, up to a point). This breaks down to a sector by sector and job by job analysis. If, for example, a farmer needed more workers to pick strawberries, he might raise wages to get sufficient workers. But if he was obliged to pay workers more than what he might earn from selling strawberries, then he would be better off letting the crop rot in his fields. In that example, the question is whether there are enough non-immigrant workers willing to pick strawberries at a wage the farmer would pay. The same question would apply to a meat-packing plant or any other enterprise.

A different example, however, might involve computer engineers. If a company is employing U.S. engineers at $100,000 per year but can attract qualified immigrants to work at $80,000, it might reduce the pay of its U.S. workers to $80,000. In this example, the immigrants are adversely affecting the wages of U.S. workers.

Again, it is a complex question that cannot be resolved in the same way in all cases — or in this relatively short blog. But what can be said is that if immigration is managed a) so as to fill jobs that cannot otherwise be filled or b) to pay immigrants no less than the existing wage paid to U.S. workers, then the adverse effects could be mitigated. It would be a mistake to miss out on all the productive benefits immigrants could provide because of a politically-charged argument that might be largely resolved through more careful management of the immigration process.

In fact, I believe there are significant worker shortages in specific sectors that could appropriately be filled by more immigrants without harming U.S. workers. Adding those immigrant workers would further boost our economy, beyond the 2 percent GDP growth projected by the CBO.

For those readers who want more information, I would encourage you to read a longer article I co-wrote for MinnPost Immigrants are essential for U.S. economic growth — and we need more of them. You might also be interested in the following article Does Immigration Create Jobs?

Steve Carlson is a member of the Board of Directors of The Advocates for Human Rights.


Originally published at theadvocatespost.org on April 20, 2017.