WSJ: Immigration Brings Economic Growth

In case you missed it, the Wall Street Journal recently reported on some fascinating economic research that – once again – underscores immigration’s value as an engine for growth. [See America Needs Immigration for Economic Growth, by Diana Furchtgott-Roth, Wall Street Journal Market Watch, 08.Feb.2013.] In a WSJ article, Diana Furchtgott-Roth, a Senior Fellow at the Manhattan Institute, summarizes her paper, The Economic Benefits of Immigration, citing compelling statistics and other academic research to bolster her argument. [See The Economic Benefits of Immigration, by Diana Furchtgott-Roth, Manhattan Institute, Feb 2013.]

At the outset, Furchtgott-Roth takes pains to dispel a popular misconception: that immigrants displace native-born workers, and ultimately cause unemployment. In fact, she argues cogently, immigrants mostly complement the native-born workforce, supplying workers at the high and low ends of the skill spectrum, where native-born workers are more scarce. According to Furchtgott-Roth, highly skilled immigrants gravitate toward STEM-related occupations, while immigrants with minimal education tend to take jobs in service, construction, and agriculture – in either case, jobs that are not being filled by native-born American workers.

That’s not her point, though. In a nutshell, Furchtgott-Roth argues that immigration is good for our economy, but nowhere near as good as it would be if our immigration policies were better aligned with our economic needs. She points out that the federal government invests heavily in science and engineering research at American universities, spending over $63 billion in 2009, the most recent year for which statistics are available. Much of that funding benefits foreign students. According to Furchtgott-Roth, National Science Foundation data show that, in 2010, 176,000 foreign students were pursuing graduate studies here in science and engineering – a wasted investment, she argues, when so many of these talented students are unable to stay here after graduation.

And yet, we continue to shoot ourselves in the foot, failing to provide enough H1B visas and green cards to fully make use of the talented young minds we have developed. To better understand the opportunity costs of the road not taken, Furchtgott-Roth refers to a 2009 study by Arlene Holen of the Technology Policy Institute. She says Holen:

“… estimated that if no green card or H1B visa constraints had existed in the period 2003 to 2007, an additional 182,000 foreign graduates in science and technology fields would have remained in America. Their contribution to GDP would have been $14 billion in 2008, including $2.7 to $3.6 billion in tax payments. Three hundred thousand H1B visa holders would also have remained in the U.S. labor force, earning $23 billion in 2008 and generating $34 to $47 billion in tax revenue over the next decade.”

Sobering statistics indeed. Clearly, we need to do a better job harnessing the full economic potential of immigration. This concern should be on the minds of every member of Congress as the CIR debate goes forward.

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