Demography, Immigration, and the Future of the American Economy

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Demography, Immigration, and the Future of the American Economy

Obviously, the United States needs to get better control of its borders and enforce whatever laws we put in place.  But, contrary to what many people now believe, research by the National Research Council under the auspices of the National Academy of Sciences showed that immigration is actually good for the U.S. economy.1 

Immigrants add about $10 billion to the economy annually.  Meanwhile, immigration negatively affects the incomes and employment opportunities of only a small subset of American citizens — those in unskilled jobs with inherently low wages.  In other words, the overwhelming majority of Americans enjoy a more robust economy as a direct result of immigration, because it increases the supply of labor and lowers the prices of goods and services. 

About 800,000 people immigrate legally to the United States each year.  Another 300,000 come here illegally each year.  About 43 percent of the combined total of 1.1 million immigrants originate in Latin America and the Caribbean.  About 25 percent are from Canada and Europe, and another 25 percent are from Asia.  The remaining 6 to 7 percent come from all other nations. 

Immigrants with lower skill levels provide cheap labor.  Without immigrant labor, some industries — such as textiles, agriculture, and restaurants — couldn't survive without huge price increases.  Domestic services wouldn't exist on the scale we see today without that population of laborers either.  Those workers compete with each other and with Americans who have not graduated from high school.

Over their lifetimes, most new immigrants will add considerably more to the government treasury, in terms of taxes, than they will receive in public services.  According to a recent article in Forbes,2 it is the very diversity of the U.S. population that gives America the unique strength and resilience it will need to recapture the momentum that enabled its greatness in the first place.  That article cites "the diversity of human experience and connections that drive America's post-racial economy," and goes on to say, "If the U.S. wants to retain its pre-eminence, it needs to go with what makes it a great country:  its protean national and increasingly post-racial business culture."

But the big impact of immigration and increased diversity is happening at the highest levels of business, the professions, and the sciences.  To see the future of business, all we need to do is take a look at American business schools.  Up to half of all business students at Stanford, MIT, Wharton, the University of Chicago, and Berkeley are foreigners...

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