Standard & Poor’s Study: Skilled Immigration Means Jobs, GDP Growth24 Apr 2014
Although U.S. immigration policy remains fraught – both on Capitol Hill and in the body politic – undocumented immigration remains the most contentious issue by far. By contrast, the emerging consensus largely favors immigration by highly skilled workers, though not everyone is convinced: some still see the labor market as a zero-sum competition, where the pie never gets bigger, and there are only so many slices to go around.
A recent study by Beth Ann Bovino, U.S. Chief Economist for Standard & Poor’s, may help to allay some of those fears. According to the Washington Post, Bovino argues that, “employment-based immigration reform would be a boon for the sluggish U.S. economy, temporarily easing the country’s ‘skills gap,’ driving new innovation, tax receipts, consumer demand, and even job growth for native-born workers.” [See Why More Skilled Immigration Would be Good for American Workers, Too, by Emily Badger, Washington Post, 19.Mar.2014.]
The S&P study points out that the U.S. lags behind other OECD countries in the percentage of work-based immigrants given permanent residency, the Post reports, noting that “the 10 countries above [in the chart that accompanied the article] with the greatest inflow of work-based immigrants had an average real GDP growth of 3.1 percent in 2010.” Were the U.S. to adopt similar immigration policies – favoring work-related instead of family-based immigration – our GDP would grow as well: by 3.2 percentage points over the next ten years, Bovino contends, according to the Washington Post.
Not only do we need more highly skilled immigrants to keep America’s innovation economy moving, as the S&P report argues, we need the demand-side stimulus they would bring; as Bovino told the Post, “We all buy stuff. We all need to fill our homes. Most of the time, we either get married or have families, and when we have families that costs a heck of a lot.” One might add, parenthetically, that high-skilled immigrants are likely to have more disposable income as well.
All of this means more job growth, across many domains of economic activity. As we noted in another recent post, each H1B worker, for instance, creates five new jobs, and H1Bs are associated with significant wage growth for college-educated U.S.-born workers. [See Immigration Policy Center: H1Bs and The Innovation Economy, MurthyBlog, 14.Apr.2014.]
In the case of the S&P study, what’s particularly interesting is the source. Though the message closely matches what leading think tanks have been saying for quite some time, it may be harder for immigration skeptics to dismiss S&P’s conclusions, precisely because it’s not a think tank or advocacy group, and its economic analysis is clearly market-driven – which may make its message more persuasive in Washington’s corridors of power.
Copyright © 2014, MURTHY LAW FIRM. All Rights Reserved