Washington Times
By Patrice Hill
March 19, 2014
One of the best ways to spark stronger growth in the economy, economists say, is to increase immigration.
The
historically high levels of immigration in the U.S. in the past were an
important factor feeding stronger growth of 3 percent on average. But
the flow of immigrants
seeking to work in the U.S. and start businesses has slowed sharply in
recent years, both in response to tougher enforcement of U.S.
immigration laws and a dearth of jobs since the Great Recession. The
result has been a drop in population growth and the pool
of adults available for work, one factor many cite in slower U.S.
growth rates of about 2 percent that economists say could become the
norm in the future.
The
Congressional Budget Office estimates that the bipartisan immigration
bill that passed the Senate last year has the potential to significantly
improve the economy’s
performance, raising growth by 5.4 percent or $1.4 trillion in the next
20 years.
That
is mostly due to a projected 16 million increase in the pool of
workers. The increase in workers would also powerfully raise federal
revenues from higher employment
taxes, overwhelming any increase in federal spending on immigrant
benefits and enforcement and cutting federal budget deficits by nearly
$1 trillion over the same period.
While
most of the lift to the economy would come from the greater number of
people available for work, the CBO estimates that increased immigration
would also raise productivity
and growth rates by prompting businesses to invest more in expansion
plans in response to the economy’s higher levels of demand and growth.
“The
increase in the labor force would generate a significant boost” in
economic output, said CBO Director Doug Elmendorf, and the impact would
be even greater if Congress
allows a generous increase in highly-skilled immigrants. Skilled
immigrants tend to get higher-paying jobs and contribute more to
consumer spending and business investment. They also start a
disproportionate share of businesses offering new employment
opportunities
for Americans, and thus they have the most potential to increase the
economy’s growth.
President
Obama has made the same point repeatedly in calling for action on
immigration reform in the House. The White House’s forecasts of economic
growth are higher
than the CBO’s in part because it assumes Congress will eventually pass
something like the Senate immigration reform plan. That view gets
plenty of backing not only from the CBO, but from private economists.
A
study for the Bipartisan Policy Center by Macroeconomic Advisers, a
respected econometric firm, found that immigration reform would raise
economic growth by 4.8 percent
in the next 20 years, increase the labor force by 4.4 percent, and spur
$68 billion a year in additional housing investment, in addition to
lowering deficits by more than $1 trillion.
“Immigration
reform is a pro-growth policy that will raise growth, strengthen
housing markets, and firm up our nation’s finances,” said Doug
Holtz-Eakin, a former Republican
director of the CBO.
For more information, go to: www.beverlyhillsimmigrationlaw.com
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