Without immigration, our economy is in big trouble

As one of the largest employers in the border town of Laredo, Texas, I don't need to read the newspapers to tell me o...

Posted: Apr 4, 2018 10:53 PM
Updated: Apr 4, 2018 10:53 PM

As one of the largest employers in the border town of Laredo, Texas, I don't need to read the newspapers to tell me our country has a labor shortage problem. I know it from the hundreds of jobs I have been trying to fill for years.

Unfortunately, it's not just me. Other employers are having a hard time finding the right candidates to fill vacancies at all skill and experience levels. And as if this weren't bad enough, the US Census Bureau just reported that for the first time in our country's history, people over 65 will outnumber children by 2035.

In fact, the number of children women are having in their lifetime -- or the total fertility rate -- has declined in recent years from 2.12 in 2007 to 1.77 last fall. This number falls under the required replacement rate of 2.1 births to maintain a population.

A shrinking workforce and an aging society are recipes for a stagnating economy -- just ask Japan.

What are we to do?

There are a number of ideas worth considering, but here's one thing we cannot do: Slam the door in the face of immigrants who want to work in our country.

Yes, part of welcoming newcomers into the fold is about honoring our immigrant heritage. But just as important is understanding that immigration has been mitigating the effects of our shrinking workforce, a lower birthrate and an aging society.

Federal Reserve Bank of Dallas economists estimate that immigrants and their children comprised more than half of the US workforce growth in the last 20 years and expect this group to make up an even larger percentage over the next 20 years. And, according to Pew Research Center, without a steady stream of a total of 18 million immigrants between now and 2035, the share of the US working-age population could decrease to 166 million.

We can see the positive effects of immigration in my home state of Texas. Research collected by the Dallas Federal Reserve showed that immigrants living in the Lone Star state help grow the economy by allowing native-born workers to specialize in communication-intensive jobs, while the foreign-born population is able to fill jobs that often require more manual labor or higher-skilled quantitative-based jobs.

This is what economists describe as labor specialization, whereby native-born workers are not competing with foreign-born for the same types of jobs -- resulting in increased productivity all around. A study from the National Bureau of Economic Research found that labor specialization results in about an 0.5% increase in income per worker for every 1% increase in immigrant employment in the state.

And according to the authors of the study, specialization is helping to boost incomes and productivity. In Texas, specialization in the workforce has resulted in roughly a $3.4 billion to $6.6 billion economic gain for the native Texan population.

But for some, the urge to reduce the number of immigrants coming into the United States dramatically is strong. And it seems like lawmakers are determined to listen to these voices by making things harder for individuals with immense talent and determination to live and work here.

One of the clearest examples of this is our inability to find a permanent solution for the nearly 800,000 Dreamers. Brought to the United States as children, these young immigrants are undocumented and have lived with uncertainty for much of their lives. The Deferred Action for Childhood Arrivals, or DACA, program, created by the Obama administration, gave many of them a temporary reprieve. But it wasn't a real fix. It simply kicked a permanent solution to their status down the road.

Now President Donald Trump is suggesting that no deal on DACA is possible despite saying he would agree to a proposal earlier this year that would have allowed Dreamers to stay in this country in exchange for border security.

It would be a shame to walk away from negotiating on this critical issue and risk losing the brains, talent and energy of hardworking, brave and incredibly gifted young adults who simply want a chance to live, work and contribute to the United States.

To be clear, more immigration is not a panacea for all that ails our economy. But to ignore the economic benefits of immigration is foolish. More welcoming immigration policies could help ease our economy's ability to absorb the effects of a labor shortage problem, a lower birthrate and an aging society.

Instead of closing ourselves off from the global economy, we should be open to the movement of skill and labor. After all, more than 95% of the people in the entire world live outside the United States. We surely want to sell them our goods and services. The people of Texas understand this better than most, with trade and commerce being so critical to our economic identity.

If we start now, we can take the necessary steps to ensure that our country will be prepared to cope with the demographic changes that threaten our economic livelihood.

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Ohio Coronavirus Cases

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