Morici: Immigration reform will make US more prosperous

August 20, 2017


America’s immigration policy sorely needs modernization. By endorsing reforms offered by Sens. Tom Cotton and David Perdue, President Trump offers Congress an opportunity to better consider how new arrivals can contribute to national prosperity.

The United States has about 45 million immigrants and annually welcomes 1.5 million. About one-quarter are illegal and that has hardly changed in recent years – declining birth rates abroad and tougher border enforcement have slowed the inflow.

Canada and Australia face challenges similar to ours – falling birth rates, skill shortages and societies defined by waves of immigrants from Europe and Asia – and both place priority on employment needs.

In contrast, the United States emphasizes family reunification. Green cards are granted automatically to spouses, minor children and parents of U.S. citizens. Subject to limits, entry is granted to other relatives of citizens, legal immigrants and refugees, and those who can contribute to economic growth. Ultimately, about 65 percent of immigrant visas are based on family ties and 15 percent on employment.

The remainder is mostly through a lottery for underrepresented countries. The Cotton-Perdue bill would limit family reunification visas to minor children and spouses, leave employment quotas unchanged and end the lottery.

Potential economic growth is determined by the sum of productivity and labor force growth. Both have fallen, causing many economists to conclude 2 percent growth is inevitable. However, missing from this is a discussion of labor force quality. Innovations in robotics, artificial intelligence and other areas indicate broad opportunities to boost productivity, but American businesses face shortages of skilled technicians and engineers to fully exploit those.

Immigrant workers tend to be concentrated among two groups: those with less than a high school education and those with more than a four-year college degree. Immigrants tend to be older than the native population and more than half qualify for means-tested entitlements, creating obvious frictions. Downward pressure on wages of lower-skilled workers is measurable, but overall the impact of immigration on growth is positive. Technology-intensive activities are greatly enhanced by the influx of higher-skilled immigrants, and those benefits overwhelm the costs imposed by lower wages on unskilled workers.

Immigration stresses social cohesion, especially among the working class – new arrivals compete for jobs and often eat different foods, practice different religions, and have different family and community traditions. Folks in small towns and rural counties, riveted by the loss of factories and consolidation in agriculture, increasingly rely on those very things to cope. And they feel alienated by the ethnic diversity and libertine values of larger cities. Those are important reasons they don’t leave for educational and employment opportunities in diverse urban settings.

A discomforting reality is that big cities like New York and Los Angeles have schools and social welfare infrastructures more attuned to assimilating immigrants from Asia and Latin America than to helping migrants from conservative communities in northern Wisconsin or West Virginia. Liberals in big cities – especially in the media and universities who shape public perceptions – dismiss middle-American ambivalence as ill-informed, xenophobic and racist.

After all, the urban elite work harmoniously in Manhattan office buildings, California technology centers and the like where cultural affinities that bring together professional groups tend to overwhelm ethnic differences among highly educated adults. If nothing else, professional schools like mine socialize students to common metropolis values and behavior.

The Cotton-Perdue proposal would likely maintain the current flow of new immigrant workers but greatly reduce the numbers of older and less-educated dependents who strain the social safety net. However, America needs more and better immigrants – and fewer that create friction with struggling citizens already reeling from the forces of globalization and technological change.

Perhaps a better approach would be to grant visas to anyone with a college degree or technical skill, who has a solid job offer and will not displace an incumbent worker, but still limit, as Messrs. Cotton and Perdue suggest, family reunification visas to minor children and spouses.

That would boost the size and quality of the labor force, accelerate economic growth and ease social tensions.

Morici: Immigration reform will make US more prosperous