Immigrants
are an underappreciated force in the US economy: They help boost
economic growth, even though many Americans think they steal jobs and
sap economic vitality.
President Trump wants to reduce immigration to the United States, starting with his attempted ban on immigrants
from 7 predominantly Muslim countries—Iraq, Iran, Syria, Yemen, Libya,
Sudan and Somalia. That ban has been temporarily blocked, as courts
debate whether it’s legal. But Trump says a revised immigration order is
coming soon–and reduced immigration is one part of Trump’s agenda
economists worry about. “We already see a fairly subdued outlook for the
pace of measured potential growth,” Goldman Sachs said in a recent note
to clients. “Immigration restrictions could reduce the economy’s ‘speed
limit’ still further.”
New analysis by the Conference Board
of actual immigrants from the 7 countries Trump is targeting helps
explain why the US economy needs legal immigrants. During the last 10
years, about 230,000 people have entered the US legally from those
countries. About 109,000 are in the US labor force. They represent two
types of workers, in general—well-educated professionals, including many
who came to the US on a student visa, and less-skilled workers who most
likely came as refugees.
Overall, workers from the Targeted 7 hold more bachelor’s and advanced degrees than US workers as a whole, as this chart shows:
Source: The Conference Board
At
the lower end of the skill ladder, immigrants from the Targeted 7 are
overrepresented in industries such as retail and health care, holding
jobs such as food preparation and personal care. Health care in
particular is a fast-growing field where the United States seems certain
to need more workers in the future, and might even face a labor
shortage in some areas.
Immigration
is more important to the US economy than it used to be, because the
native-born US population is growing more slowly than it has in the
past. The Goldman Sachs analysis points out that immigration as a
portion of total population growth has risen from 30% in the 1990s to as
high as 50% now.
Some
people think that means more immigrants are taking jobs native-born
Americans would otherwise have. There are probably isolated incidents of
that, but overall, there’s scant evidence that immigrants reduce the
number of jobs available to natives. More likely, they increase the
overall number of jobs, because immigrants start businesses at a higher rate and are more entrepreneurial than the US labor force overall.
Losing high-skilled workers
Trump
pushed for an immigration ban on the Targeted 7 countries by claiming
that terrorists were more likely to enter the United States from those
countries. But when asked in court to produce evidence to support that
claim, the Trump administration didn’t have any. Economic growth
obviously needs to be balanced with national security, but if there’s no
actual threat under the current vetting system, then locking out
immigrants who would otherwise add to economic growth is self-defeating.
Especially since Trump has vowed to double current rates of growth, to a
robust 3.5% or even 4% per year.
Immigrants
from the Targeted 7 are a very small fraction of all immigrants to the
US. If Trump’s ban is reinstated, losing those workers could hurt a few
select parts of the economy. “While they comprise only a tiny part of
the US population overall, their disproportionate representation in
certain high-skilled, high-shortage occupations and in certain metro
areas means that losing their participation in the US labor market would
produce tangible economic effects,” the Conference Board concluded.
If
there are broader efforts to limit immigration, the effects will be
more widespread. That could also offset other Trump initiatives that
could genuinely boost growth, such as tax reform (if done right) and a
cutback in onerous regulations. Terrorists are a legitimate enemy.
Immigrants are not. If Trump doesn’t differentiate between them, the
whole economy will suffer.
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