The Idaho legislative session is over, but a previously hot topic - illegal immigration - has thankfully been absent from the discussions. We can also be thankful for the growing national consensus on immigration reform.
More immigration may be just what our slow-growth economy needs.
The likely reasons for less debate on this issue are the 2009 recession and the continuing slow economic recovery. According to new research from the Pew Hispanic Center, the number of illegal immigrants in the U.S. grew 32 percent from 2000 to 2011. But the trend is slowing. Since 2009 the number of unauthorized immigrants has declined 7.5 percent.
It is also important to note the characteristics of these undocumented residents. The Pew data show that nearly two-thirds of all unauthorized immigrants have been in the United States for at least a decade, and illegal entry from Mexico is declining. Contrary to the belief of many, less than two-thirds of unauthorized immigrants are from our neighbor to the south.
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As job opportunities in the U.S. fell, so to fell the opportunities for immigrants, legal or otherwise. Idaho officials have long argued that illegals take jobs from the state's unemployed workers. But a weak economy takes a lot of wind out of that argument.
According to the Idaho Department of Labor, total state employment in February declined. Idaho has more than 725,000 workers, but this is the same number of jobs we had five years ago, before the recession started.
With the number of new jobs and the labor force participation rate on the decline, it is a good time to consider how we treat potential immigrants to the U.S. Economic theory and empirical evidence show that immigration is good for the nation and its workers.
First the theory: For markets to be competitive, and thereby produce the best results for society, there need to be many buyers and sellers and free entry. Markets work best when they are guided by Adam Smith's invisible hand. When we stop people from entering markets, including the labor market, competition is reduced, raising prices and reducing choices for consumers.
When the Idaho agricultural industry wants to hire workers to pick produce, the residency of those workers shouldn't matter. Anytime we prevent mutually beneficial transactions we reduce competition and all its benefits to society.
Next the evidence: Research using state-level data shows that immigrants expand the economy's productive capacity, stimulate new investment and boost productivity. States with higher immigrant worker populations have higher rates of output per worker.
More investment and higher productivity are just what a weak economy needs. Economic theory and evidence also show that higher productivity is the key to long-run economic growth by lowering product costs, increasing output and raising our standard of living.
But productivity growth is currently very slow. The Bureau of Labor Statistics reports that from 2009 through 2012, productivity grew at an average annual rate of 1.8 percent, much slower than the 2.6 percent average growth over the previous decade.
Labor is a service, and if we want other countries to buy the services for which we have a comparative advantage, such as new technologies, we must be willing to buy goods and services for which other countries have a comparative advantage, such as labor.
If we want competitive markets for the things we buy, and if we are going to advocate for free trade throughout the world, we must also support free trade in the labor market.