• U.S.

Open the Door and Let ‘Em In

5 minute read
Rana Foroohar

From an Economic standpoint, the battle over immigration reform has always been utterly baffling to me. Immigrants, or the children of immigrants, founded 40% of this country’s Fortune 500 firms and untold millions of smaller businesses. They are the key reason that the U.S.’s population growth, and thus its economic growth, is predicted to be higher than that of most of the rest of the rich world over the next couple of decades. Immigrants are the difference between an economy growing at a healthy 3% rate and a sluggish 2%. Why wouldn’t we want as many of them as we can get?

Sadly, many House Republicans, who have been debating the issue in recent days, don’t agree. That means the immigration-reform bill that passed the Senate with bipartisan support a few weeks ago is likely to be scuppered. Conservatives continue to insist that creating a path to citizenship for undocumented immigrants would unleash a torrent of new low-skilled workers from Mexico that would drive down U.S. wages.

But the truth is that the net FLOW OF IMMIGRANTS FROM MEXICO TO THE U.S. HAS BEEN SLOWING for a decade. It has now essentially stopped and is likely to reverse later this year, with the number of Mexicans returning home from the U.S. exceeding the number crossing over to America. Increased border patrols and tougher U.S. laws have clearly played a part, but a more important reason is that the economic calculus of migration has changed. The recession hurt prospects in the U.S. Meanwhile, a booming Mexican economy and better educational and job opportunities in Mexico have led many Mexican migrants–who make up 28% of the foreign-born population of the U.S.–to go home. (The Pew Hispanic Center estimates that from 65% to 95% of immigrants who returned to Mexico did so voluntarily.) “We’ve been so overwhelmed by a very emotional discussion about enforcement and security that the economic component of migration has gotten lost,” says Janet Murguía, president of the National Council of La Raza, the nation’s largest Hispanic civil rights and advocacy group. That’s a pity, since the facts show that we should be courting, rather than turning away, new immigrants at all ends of the economic spectrum.

Let’s start with the wage issue. Creating a path to legal immigration would put an end to immigrants’ being oppressed and used to keep wages down. Immigration reform is something that both labor and many big businesses support (since it also helps ensure a supply of needed workers). As the AFL-CIO’s policy director, Damon Silvers, pointed out to me at the recent Aspen Institute summit on financial security, while legalizing immigration would shore up wages (much needed in an economy that is 70% based on consumer spending), it is unlikely to result in the offshoring of jobs. Most sectors that those migrants work in–like hospitality, construction, tourism and agriculture–simply aren’t offshorable.

Meanwhile, LEGALIZATION WOULD HELP BOLSTER PUBLIC FINANCES. In a May 8 letter to Senator Marco Rubio outlining the possible effects of the immigration-reform bill, Stephen Coss, chief actuary at the Social Security Administration, wrote, “We estimate a significant increase in both the population and the number of workers paying taxes in the United States as a result of these changes in legal immigration limits.” Immigration reform would increase Social Security revenue by $300 billion over 10 years. The CBO forecasts that it would also reduce the federal deficit by $685 billion over the same time period. And the liberal think tank Center for American Progress estimates that legalizing the 11 million undocumented workers living in the U.S. would add $1.5 trillion to the economy over 10 years.

Plus, immigrants punch above their weight in growth creation. They are more than twice as likely to start businesses as their native-born counterparts. They are responsible for over a quarter of all new business formation–and new businesses have been the only source of net job creation in this country for the past 30 years. What’s more, IMMIGRANTS TEND TO LAUNCH THEIR VENTURES IN PARTICULARLY IMPORTANT AREAS; they have founded a disproportionate number of export businesses, which tend to create more and higher-paying jobs, and often locate their firms in economically beleaguered areas, where new jobs are needed the most.

Aside from all these benefits–and I could go on–there’s the chutzpah effect. Immigrants are people who risk everything to make perilous journeys to support their families. They take two-hour bus trips to work 12-hour days doing menial labor for low wages. They study and work tirelessly to vault themselves and their families from working to middle class in a generation, as my father did. If we don’t want to make it easier for them to join our society, then what kind of society are we?

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