An Urgent Economic Need For Immigrants, But Not Just Any Immigrants

America needs immigrants, not the chaos on the southern border, but it desperately needs more productive people. Though the country truly is a nation of immigrants, the need today – at least the economic need – is especially acute. Because of years during which birth rates remained low — since the 1960s in fact — the economy now has too few young workers to replace the retiring baby-boom generation. It is largely this shortage that has led the Congressional Budget Office (CBO) in its latest budget assessment to forecast future real growth far short of the 3.1% annual pace of the past 70-some years and put it at only 1.8% a year. To be sure, innovation can help by making each worker more productive than in the past. It was a major factor in the past, but alone it is not enough. However acute the need, however, there are better answers than today’s chaos on the southern border.

America has always relied on productivity-enhancing innovation to spur the pace of development. More than half the impressive growth of the past 70-some years springs from this source. Early on in this period, advances in aerospace and miniaturization helped revolutionize communication and bring the beginnings of computerization as well as the first introductions of robotics. All greatly enhanced workers’ output per hour. Later in the twentieth century and into this new century, the widespread application of computers into the workplace did the same job for productivity, as did more sophisticated robotics and still more impressive advances in communication. Productivity in the 1990s and early 2000s got a lift from the introduction of PCs and their connection to the internet.

Though there is every reason to expect that something new will come along to support the pace of economic growth in coming years and decades — artificial intelligence (AI) for instance — such technologies cannot be forced. As has always been true, they come from the trial-and-error process of millions of independent actors. The best policy approach is to allow room and financing for innovators. Government support can help but only up to a point. In the past government has had at best a spotty and often inadvertent role. The space race developed miniaturization to decrease the weight of rockets. The tremendous commercial applications came from outside the governement. When the Defense Advanced Research Agency (DARPA) invented the internet, if was a defense application. Others found the stupendous commercial applications.

If the nation has good reason to expect a continued growth lift from innovation, even AI will not be enough. The economy will still need policies to bring it more workers than it is generating from the natural expansion of the population. CBO projections outline the extent of the problem. During the rapid growth period of the past, the nation’s workforce grew some 1.2% a year. In the early part of the period, it was the flow of veterans from World War II and the Korean War that added huge numbers to the workforce. In the 1960s and beyond, the maturation of the huge post-war baby boom provided an impressive flow of new workers. Falling birth rates since the 1960s have, however, slowed the flow of native-born workers to a trickle. The CBO estimates that the flow of native-born youth can increase the nation’s labor force a mere 0.4% a year. Immigration is essential.

But not every sort of immigration is as useful economically as another. The economy responds best to help from an inflow of skilled people and those with the language skills to learn skills quickly. Not only do such immigrants add a productivity enhancement to the raw labor they bring, but they help other workers improve their skills as well. The chaos at the border offers little of this sort of help. No doubt some involved there possess desirable talents, but that is purely accidental. The economy needs something more reliable and focused.

Canada and Australia offer useful models that might guide this country’s economically supportive immigration reform. Both these other immigrant countries use what might be called a point approach. Potential migrants get points for levels of education, language skills, the lack of a criminal record, and for work skills — machinists, for instance, pilots, welders, railroad engineers, and the like. Once an applicant has enough points, he or she immediately receives a work permit and, with his or her family gets permanent residence. They enter the country as productive taxpayers who impose no burden on social services and may even enhance the skills of those around them. Were the United States adopt such an approach, it would be more likely to get the workforce it needs and with less resistance from the native population than exists today.

Even the best conceived immigration policies could not guarantee that the United States would recapture its former rapid rate of growth. But reform of its present arbitrary and impenetrable immigration system surely would increase the likelihood, to the benefit of the immigrants and the population at large.