·  Legal News, Analysis, & Commentary

News & Politics

How Immigration Can Help the US Economy

— December 30, 2014

It’s funny how often people tend to read things supporting their own beliefs. Recently, I read one such pro-immigration article in The Economist about how migrant labor helps – not hurts – the US economy.  So often, right-wing politicians and pundits will pontificate on how immigrants take jobs from hard working Americans; some even proclaim immigrant labor will hurt our ailing economy.  Thankfully, we have political economists to help us get to the truth.  Spoiler alert: the right wing is pretty plainly wrong.

The Economist: “Immigration is the quintessential supply-side policy. It expands the labour force, encourages investment and provides taxpayers to support America’s growing ranks of the grey-haired.”

Immigration reform legislation blocked by the Republican House of Representatives in 2013 would have been a responsible and constructive set of new immigration laws, making “new entry routes for foreign workers, especially those with skills, experience and education.” (Economist) According to the CBO, those reforms would have increased the American workforce by about six million, pushed up the GDP by 3.3%.  While 3.3% might seem small, it’s important to note that today, our economy is only growing at a rate of 4.1% per year (estimated September 2014 by the BEA).  Additional annual growth of 3.3% would be huge.

(For reference, Obama’s recent executive action on immigration is slated only to boost GDP by 0.4-0.9% over ten years.  However, Obama’s immigration reform laws are good, fair acts, allowing “foreign entrepreneurs more ways to get into America, allow the spouses of skilled visa-holders to work, and let foreign-born science graduates spend more time in America doing their training.” Ibid.)

Theoretically, the economy could expand by more than 0.4-0.9% over ten years under Obama’s recent executive action, as undocumented immigrants could begin over-the-table work.  Many feel this effect is likely to be marginal at best.

Again, the Economist: “Immigration is already shrinking as a contributor to American growth. Legal immigration has been around 1m a year for the past decade, and is edging down as a share of the population (see chart). Illegal immigration more or less came to a halt in 2007. Since then, the number of illegal immigrants freshly arrived in the country has been roughly balanced, or exceeded, by the number who have left, died or been deported. The longer Congress goes without legislating a change, the costlier it will be for the economy.”

While Obama’s executive action on immigration may not expand the economy too quickly or too much, it isn’t likely to be effective for long – especially if Republicans win the White House in 2016.  Nonetheless, the point remains that increased immigration can have a positive effect on the US economy.

Join the conversation!