Congress and the White House say they agree on one thing: the need for immigration reform.
The STEM Jobs Act of 2012, co-sponsored by Idaho Republican Rep. Raul Labrador, passed the House on a 245-139 vote.
Labrador’s legislation makes it easier for foreign students to stay here if they have a job offer and a master’s-level degree in science, technology, engineering or mathematics (STEM). Unfortunately, the Senate is not taking up the bill this year, and with little support from the Democrats the bill is unlikely to become law.
Political issues like immigration have economic principles at their core. With all the debate about how to avoid a recession next year, it seems policymakers could find some common ground on immigration and, in the process, help fix other economic problems ahead of us.
Economic theory shows, and historical evidence supports, the contention that the key to economic growth is higher productivity. Higher worker productivity lowers product costs and increases output, raising our standard of living.
By training and keeping students in the STEM fields, we can boost the nation’s overall productivity. Advances in science, engineering and math lead to better tools and more technology for workers. With these tools and skills, workers produce more with less. STEM immigrants will help us find these technological advancements.
Unfortunately, immigration and productivity in the U.S. are both stagnant. According to the Department of Homeland Security, 1,062,040 people obtained U.S. permanent-resident status in 2011, but only 139,339 for employment reasons. Furthermore, as a percentage of our labor force, the number of legal immigrants has declined over the last decade.
Some fear reforms to immigration laws because illegal immigration is itself a problem. But even that is down. The Census Bureau reported this month that there were 11.1 million illegal immigrants in the U.S. in 2011, down from a peak of 12 million in 2007.
The Bureau of Labor Statistics reported this month that productivity at nonfarm businesses is currently growing at just 1.7 percent a year. This compares with an average annual rate of about 2.5 percent over the last decade. STEM immigrants can help bring this rate back up.
Demographic studies also show we need more immigrants. David Wessel, economics editor of The Wall Street Journal, argues that ambitious immigrants will help lift living standards and bring faster growth. Allowing more working immigrants will do more to repay the massive federal debt than any other economic policy, because a higher GDP growth rate brings in more tax revenue.
A low growth rate in the labor force and longer life expectancy for retirees combine to create the massive Social Security problem that has yet to receive the attention it deserves. As long as our economy produces jobs many workers will seek our shores through any means possible.
A comprehensive reform of U.S. immigration laws will reduce employers’ hiring burdens and bring these laws into agreement with our trade policies. When the country supports and advocates for the free trade of goods and services, it should also support the free trade of labor.
Peter Crabb, professor of finance and economics at Northwest Nazarene University in Nampa. email@example.com