Immigrants are an Engine of Prosperity
By Michael Clemens
Imagine telling Americans in 1900 that over the 20th century, about 60 million immigrants —- that is, 80 percent of the population at the time —- were going to come and stay in the United States. Tens of millions more were going to come for a while but not stay. Many at the time considered the country “full” and would have feared that such an enormous influx, combined with the vast financial crisis we were to experience a few decades later, would harm American prosperity.
Yet all of these things happened, and here we are today: even in the midst of new financial turmoil, still the richest nation the world has ever seen.
Throughout history, international migration has been a central force in reducing global poverty and inequality. But the recent heated political debate over immigration reform has spectacularly missed the important ways in which the international movement of people shapes the development process —- and how this process benefits everyone.
Although many Americans legitimately fear the effects of immigration on our economy, the best economic research reveals two surprising facts: It has not appreciably lowered the average American worker’s real earnings, and the impact of immigrants on funding for public services is roughly zero over their lifetimes: They contribute to the system roughly what they take out.
The Treasury secretary is working right now to make sure that American business has what it needs in the short run: functioning credit markets. But what American business needs to remain strong in the long run is energetic manual labor and brilliant, creative minds. Immigration to the U.S. will continue to be a rich source of both.
Far beyond our borders, the movement of people shapes economic development across the globe in ways that are not immediately obvious, or often discussed, but important to consider.
Also surprising is the fact that migration often creates positive spillovers in the sending countries. The Philippines, for example, sends large numbers of nurses to the United States and other countries. One result of this outward migration is that an enormous system of high-quality private nursing education has arisen in the Philippines to prepare low-income women to benefit from these opportunities. Since not all of the trained nurses leave, the Philippines today has more professional nurses per capita than richer countries like Thailand and Malaysia —- or even Great Britain.
Migrants also help build critical trade and investment ties between the United States and the rest of the world. From a development standpoint, when migrants come to the U.S. the temporary scarcity of labor in their home country can cause wages to rise. Many return home, particularly when there are legal ways for them to move back and forth, and they bring knowledge, skills and savings with them.
We must craft an economically sound policy toward guest workers. There are currently just 150,000 legal slots for authorized temporary low-skill workers to enter the country each year, but roughly three times that many workers enter the country each year without authorization. We need a legal pathway for energetic workers to supply their labor.
We need to greatly raise or eliminate caps on high-skill worker visas. Shutting the door to skilled workers, aside from eliminating hundreds of thousands of professional opportunities for highly productive people from developing countries who wish to work here, also lowers our productivity and threatens our ability to remain a center of innovation and job creation.
We should do our fair share for refugees. Hosting them is a global service we should be proud of, but the U.S. is no longer shouldering our load. Even doubling our current refugee admissions would merely return us to the level under the Reagan, Bush, and Clinton administrations. We can do better.
Finally, we need to know who is moving in and out. The president should direct the Bureau of the Census, the State Department, and Citizenship and Immigration Services to lead international efforts to generate migration statistics that are as good as our trade statistics.
A president who wants to be a true leader should treat migration policy not as a hot-button issue to be “managed” during short-run turbulence, but as part of a larger policy for maintaining our long-run prosperity and our key role in catalyzing global development. It is something liberals can embrace because it effectively reduces poverty, and it is something conservatives can embrace because it is one of our longest traditions. The next U.S. president has a historic opportunity to turn today’s shameful disarray into tomorrow’s win-win breakthrough.
Michael Clemens is a research fellow for the Center for Global Development, a Washington think tank.