Enough Talk, Time to Take Action and Spur America’s Economy

Enough Talk, Time to Take Action and Spur America’s Economy
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With the arrival in Washington of an administration committed to fostering more rapid economic growth, there is perhaps a new opportunity to pursue immigration reform, particularly in light of the reporting that President Trump voiced support for comprehensive immigration reform during an exchange with top technology executives like Apple CEO Tim Cook last week. He made similar statements in February in a private conversation with journalists.

These statements are an acknowledgement that population growth is one of the fundamental determinants of the long-term growth potential of an economy. As a result, immigration reform would be an affirmative step toward stronger domestic economic growth and job creation, two priorities of this administration since the early days of the campaign. Moreover, a practical approach to growth-promoting reform need not be comprehensive at the start. A good first step in an immigration reform plan should be a focus on increasing highly skilled immigration.

Sluggish economic growth has kept Americans economic anxieties high. An economically focused, skills-based immigration reform is one piece in a larger set of policy reforms that will spur faster growth, but it is a vitally important piece that has been stagnant for far too long.

The simple fact is that immigrants come to the U.S. to work. Immigrants have a higher labor force participation rate than native born Americans. They are a bigger share of our civilian labor force (16.8 percent) than they are of our population (13.5 percent). More importantly, immigrants are responsible for 45 percent of the growth in our labor force over the past ten years. A bigger labor force means more workers to help drive American economic growth. Faster economic growth means more opportunities for American workers and a better standard of living for all of us.

The American economy benefits regardless of the skill level of the immigrants or temporary foreign workers. But the benefits are more pronounced for those immigrants or temporary workers who are considered highly skilled. Studies have found temporary highly skilled workers on H-1B visas spur job growth for native born workers and increase the wage growth of both college educated and non-college educated American workers. Additionally, there is research suggesting that we lose by not expanding the H-1B visa program. Economists Giovanni Peri, Kevin Shih, and Chad Sparber found that when firms were unable to hire H-1B workers due to cap limits in 2007-08, tech sector job growth was constrained for highly skilled and low skilled American workers. The availability of more H-1B visas would likely have led to stronger wage and employment growth in subsequent years.

The benefits to the U.S. are clear: stronger economic growth and more opportunities for American workers. And yet we have not had a substantive reform on immigration policy since the 1980s. Comprehensive immigration reform, it seems, is dead on arrival.

But it is desperately needed. Our economy is at full employment. We do not have enough workers to fill available jobs. And we cannot train the limited pool of potential workers we have fast enough to meet the demand for skilled labor. The best solution is immigration reform.

The administration can and should come up with an immigration reform plan, but it does not need to be comprehensive at this time. Instead, it should focus on the pieces which will have the most positive impact on jobs and the economy. Targeted reforms to our highly skilled immigrant and temporary worker programs would be a good place to start.

Some will argue that border security should come first. Others will say that our first priority should be helping the undocumented population come out of the shadows. These issues should be addressed, but fixing them will not spur the economy in the way that increasing the number of highly skilled immigrants and temporary workers will. Highly skilled immigration should be the least controversial issue in immigration reform. Tackling it first could be the best way to begin moving this important issue forward in a bipartisan way.

Written by: Laura Collins, Deputy Director of Bush Institute Economic Growth Initiative

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