Idaho Congressman Raul Labrador met with folks from across the Treasure Valley at Meridian City Hall last month. His talk focused on three big issues in front of policymakers today - gun control, immigration and the economy.
The last two are interrelated. Immigration reform is good for the economy.
Economic theory and historical evidence show that immigration is good for the U.S. Anyone willing to move to a new country is generally ambitious. Such immigrants help lift living standards and bring faster growth.
In a 2010 study, professor Giovanni Peri of the University of California - Davis and researchers at the Federal Reserve Bank of San Francisco found evidence that immigrants expand the economy's productive capacity, stimulate new investment and boost productivity. Their state-level data on immigration shows that states with higher immigrant worker populations have higher rates of output per worker.
A faster-growing economy makes everyone better off, even the government. Higher economic output brings in more tax revenue, helping reduce the federal budget deficit and stretched state budgets.
Economists have long known that higher productivity is the key to long-run economic growth. Theories of how the economy grows and cross-country studies have shown that higher worker productivity raises our standard of living by lowering product costs and increasing output.
Right now, worker productivity in the U.S. is falling. The Bureau of Labor Statistics reported this month that productivity at nonfarm businesses fell 2 percent in the fourth quarter of 2012. If the U.S. or its member states continue to put up walls against immigrant workers, our output will grow more slowly than elsewhere.
The law must be respected, but we shouldn't be too concerned over how immigrants get to the U.S. They come for the jobs, which the U.S. has been slow to produce as of late.
Immigration, both legal and illegal, rises and falls with job availability. According the most recent study by the Pew Hispanic Research Center, the number of unauthorized immigrants living in the U.S. is unchanged over the last two years and down by 1 million since peaking in 2007.
As long as our economy produces jobs over the long run, many workers will seek our shores through any means possible. Immigration reform must take a long-run view.
Economic theory and historical evidence also support greater international trade and commerce. President Obama is calling for expanded free-trade negotiations with European nations and others. Gov. Butch Otter is traveling to Asia again this year to promote exports and further international trade. If our country is going to support and advocate for the free trade of goods and services throughout the world, why would we not support the free trade of labor?
Labor is a service. If we want other countries to buy the services which we are good at (e.g., technology, entertainment and professional services), we must be willing to buy goods and services for which other countries have a comparative advantage, such as labor.
Immigration reform, like that supported by Labrador and others, is not just the right thing to do for our neighbors. It's good economic policy.
Peter R. Crabb, professor of finance and economics at Northwest Nazarene University in Nampa. firstname.lastname@example.org