Immigrants get the job done

Despite the unruly border politics, the fact is that immigrants and immigration are so economically beneficial that even a chaotic system has large economic and fiscal benefits



February 14, 2024 - 3:23 PM

Farmworkers pick strawberries in May 2023 on the Ramos Farm outside of Watsonville, California, a few miles from the Buena Vista Migrant Center. The center is one of California’s 24 farmworker housing centers, which provide state-subsidized housing for workers, who are critical to the success of seasonal harvests. (Xavier Mascareñas/The Sacramento Bee/TNS)

Last week, smack in the middle of a series of congressional meltdowns over border security, the Congressional Budget Office dropped the latest edition of its 10-year budget and economic forecast. It’s the kind of report that ought to — but won’t — shake up the immigration debate on Capitol Hill.

According to the latest numbers, the next 10 years of federal budget deficits will amount to about $20 trillion, with the debt-to-GDP ratio at 114% by 2033. 

That sounds scary. But it’s actually an improvement from last year’s report: This year’s projection sees the US gross domestic product as $7 trillion higher over the next decade than last year’s, with $1 trillion in additional revenue. 

More revenue and a larger economy equals a lower debt-to-GDP ratio that, while not necessarily out of the danger zone, is at least closer to sustainability.

So what explains the good news? The answer, in a nutshell: Immigrants get the job done.

To quote the report: “CBO now expects the labor force to have 5.2 million more people in 2033 than the agency projected last year. Most of that increase results from additional foreign nationals in CBO’s new population projections.”

None of this should be taken as an excuse for lax border security. The current situation, in which the asylum system is overwhelmed and people who enter the country and claim asylum status end up being scheduled for court dates years in the future, is unfair to people with legitimate claims and an enormous loophole for people just looking for a chance to work under the table.

Nobody is happy about this. Democrats were right to come to the table and offer to make substantive changes to asylum law as part of a solution, and House Republicans were wrong to pull the plug, on Donald Trump’s orders, for craven political reasons.

But the unruly border politics and policy just make the CBO’s findings all the more remarkable. Immigrants and immigration are so economically beneficial that even a chaotic, somewhat lawless influx that was not even slightly designed for economic or fiscal benefit nonetheless has large economic and fiscal benefits.

Imagine how much better the US could do with a properly designed and properly managed immigration policy, which would deliberately select those who would advance the national interest.

What would that look like?

Of course it’s politics, so these things need to be negotiated. But one obvious place is with skilled workers. A major flaw in the current situation is that while it’s relatively easy to come to the US to work illegally, it’s very hard to practice a skilled profession without a legitimate visa. Giving more visas to foreign-born doctors, dentists, computer programmers and engineers would have a directionally similar impact on macroeconomic variables — GDP and tax revenue up, debt-to-GDP ratio down — as the current influx of asylum-seekers. But the magnitude would be much larger because skilled workers earn higher incomes.

That said, population growth is on some level a short-term fix.

The big fiscal crunch in the US concerns the burden of meeting the government’s commitments to the elderly. And it’s here that a role for less-skilled workers — the kinds of people currently clogging the asylum system — clearly suggests itself. 

Let them come to the US and work for a year (or two or three) and then go home. While here on a temporary spell, their employers will pay employer-side payroll tax and help cover the cost of Social Security and Medicare, but the employees won’t actually collect any benefits. 

Worker-side taxes could be held in escrow, forfeited if these workers overstay their visa and returned as a bonus as an incentive to follow the rules. Congress could create a commission to determine which industries would benefit from additional workers — child care, agriculture and construction might be a good start — and restore restrictions during periods of rising unemployment.

Worries about immigrants “taking jobs” are, after all, on some level an artifact of the weak labor market of years past. In today’s economy, a smaller workforce would simply mean higher interest rates from the Fed in an effort to cool demand. When unemployment is low, extra foreign-born workers not only improve the long-term fiscal outlook, they support lower interest rates, which drive higher investment and long-term productivity.

Last but not least, any new immigration program should allow for more local choice. Some parts of the US are suffering from acute, long-term housing scarcity due to their own poor zoning choices. But other areas are suffering from chronic long-term population loss.