James Pethokoukis of the American Enterprise Institute points to a new study that once again confirms that healthy economies don’t keep out or kick out immigrants:
The study, “Migration and the Economy,” goes to great length in explaining the unappreciated beneficial impact from the global movement of our fellow humans. The headline stat is that without migration, US economic growth would have been roughly 15 percentage points lower than it actually has been. Or to put it another way: “While not quite putting the US in recession, this is enough to cancel out the majority of post crisis gains.”And how, exactly, does immigration boost growth? First, there is a labor market impact. More immigrants means more hours worked in the economy. Immigration also often boosts labor supply by increasing female labor force participation via the mechanism of “substantially reduced costs in care services.”Second, an increase in skilled migration can directly increase the aggregate level of human capital while low-skilled migration can indirectly boost the supply of skilled labor by increasing the labor force participation of skilled women.Third, there is the innovation impact.
Anti-immigrant cranks don’t want to hear that native-born Americans cannot innovate as well without newcomers, but history is full of examples of how the free flow of people and goods stimulates learning, economic development and creativity. It’s not an insult to American workers to say that the input of highly motivated people with different life experiences helps generate innovation and growth. For one thing, the act of immigration is entrepreneurial, a risk-taking endeavor that those who favor the security of the familiar and lack ambition will not willingly undertake. Moreover, at a very basic level, diversity really is a plus. From the study:
Diversity, directly and via higher productivity, also plays a key role in attracting and retaining creative and talented people to cities …, driving further innovation. … Migrants not only bring an established set of pre-existing international links with them, but are also more willing to explore globally, spotting new opportunities and potential innovations.
The same factors that explain immigrant success also shed light on the growing gaps between urban and rural America: “We suspect many of the dynamics on innovation create cycles of prosperity for cities that are able to attract and utilize migrants effectively: Innovation begets immigration, and immigration drives innovation. Economic geographer Richard Florida argues that diversity increases a region or city’s ability to compete for talent. … Subsequent innovation and further economic outperformance can then underpin further skilled immigration, with the cycle repeating all over again.”
The question should not be: “How much ‘harm’ do immigrants do?” Rather, we should ask: “What are the ways that immigrants can solve problems, including an aging population with ballooning retirement costs, uneven prosperity and a productivity deficit?” And the great thing is that you don’t have to make huge public expenditures or raise taxes; one only need reaffirm the American dream and welcome those who want to work.