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Hamilton on Foreign Policy #240: Immigrants drive US economy

The American economy is thriving, and immigration should get some of the credit. That’s the message from experts who highlight the critical role that immigrants are playing in the workforce.

Lee Hamilton on Foreign Policy Mar 13, 2024

Headshot of Lee H. Hamilton Lee H. HamiltonBy Lee H. Hamilton

The American economy is thriving, and immigration should get some of the credit. That’s the message from experts who highlight the critical role that immigrants are playing in the workforce.

This may seem surprising when immigration is under attack and chaos at the border is a staple of political rhetoric. But immigrants are filling essential jobs – in childcare, health care, food service and agriculture but also in science, technology and entrepreneurship – at a time when employers are struggling to find workers.

About half the recent growth in the labor market came from foreign-born workers, according to an Economic Policy Institute analysis. A recent report by the nonpartisan Congressional Budget Office estimates that growth in the labor force, largely from immigration, will add $7 trillion to America’s GDP in the next decade. More people working means more people paying taxes, which reduces the federal deficit.

Of course, this doesn’t mean our immigration policies are working the way they should. They haven’t been seriously updated since 1986. We need an immigration system that advances our national interest and reflects our values, and we don’t have that. Our current system prioritizes family unification, which is important; but it hasn’t kept pace with changes in technology and the economy.

Obviously, many Americans are concerned about immigration. A recent Gallup survey found 28% of respondents named immigration as the top problem facing our nation, more than cited inflation or any other issue. And it’s not just Republicans who worry. Liberal cities like New York, Chicago and Denver have been overwhelmed by migrants bused from Texas.

But some fears are overblown. Research finds that immigrants don’t take jobs from native-born Americans or drive down wages, at least in times of robust employment. Neither do they rely excessively on public assistance or commit more crimes. The vast majority play by the rules and contribute to society. The Pew Research Center estimates that just 22% of foreign-born workers are undocumented.

America is a nation of immigrants, but immigration has often been controversial. An anti-immigrant backlash 100 years ago produced legislation to bar most migrants not from Northern and Western Europe. It wasn’t until the 1960s that a point-based system replaced national-origin quotas.

Today, immigrants account for 13.6% of the U.S. population, a modern-day high and about the same percentage as a century ago. The share of foreign-born workers in the labor force is higher, largely because immigrants are likely to be of working age. That’s important because the native-born population of working age isn’t growing. The Baby Boom generation has reached retirement, straining programs like Medicare and Social Security. As Brookings Institution analyst William H. Frey writes, “immigration levels are crucial in leading to national growth as opposed to decline, and countering what would otherwise be extreme aging.”

A well-designed immigration system could maximize the benefits of immigration while reducing border issues and other concerns. Unfortunately, getting agreement on immigration is extremely difficult. We saw this recently when the Senate reached a bipartisan deal to pair border restrictions and funding with aid to Ukraine and Israel only to see the House reject the plan.

Almost 20 years ago, former Sen. Spencer Abraham and I chaired a task force to study America’s immigration policies. We recommended a simplified and streamlined system with consistent federal oversight, updated technology, improved border security, protection of human rights and a path to legal status for unauthorized immigrants. These ideas shouldn’t be controversial, and they are as worthwhile today as when they were written.

It may be too much to expect Congress to pass immigration reform in an election year, when politicians are eager to exploit the issue. But we can’t keep kicking solutions down the road. Immigration is too important: to the economy and to our identity as a nation.

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