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End the Shutdown with a Huge Bipartisan Immigration Deal

By Joseph Minarik

This article originally appeared in The Hill on January 04, 2019.

The federal government entered 2019 partially shut down. And at the same time, the stock market’s 2018 rollercoaster finale is stoking fears about the economy. Amid all the tumult, it turns out that the White House and new Congress have an opportunity to kill two birds, reopening the government and strengthening the economy, with one stone.

The stone? Immigration policy in the ongoing shutdown negotiations. But our leaders should go big. A comprehensive immigration agreement can boost the economy while reopening the government. The crux of the deal should be increasing immigration levels, a goal more associated with Democrats, while increasing growth, which should satisfy Republicans.

The baby boom generation is retiring. Younger generations of native-born workers will strain to fill the places of baby boomers in the workforce. We need more workers. And on that note, there are two basic ways to add workers to the economy: raise them from birth or bring them in from other countries. The two approaches impose sharply different costs.

The first approach of raising and educating U.S. children carries a high price tag. American households spend on average more than $233,000 raising each child to the age of 17. That figure excludes the $13,000 per-pupil per-year public cost of educating a child through age 17. In total, the combined public and private spending to raise the average native-born child through age 17 reaches just over $400,000.

But the federal government and ultimately U.S. taxpayers bear none of those costs if they pursue the second approach: bringing in immigrants. Adding just 100,000 working-age immigrants each year would bring skills into the economy that would have cost $47 billion to obtain through rearing and educating native-born children.

The nation could do a much better job of tapping the willing and eager labor overseas. Current immigration law does encourage some employment- and skills-based immigration, but these programs don’t sufficiently meet workforce needs. Take H1B admissions: They are dominated by computer programmers, software developers, and others in computer-related occupations – fields with few shortages. On the other hand, current law does little to fill gaps in fields that face severe shortages, like nursing and home health assistance. And that’s where more immigration can come in and fill a much-needed void.

If White House and congressional negotiators look north, to Canada, they can see how to grow the labor force through smart immigration policies. The Canadian native-born labor force is actually shrinking. So, the country plans to accept more than one million immigrants in just the next three years, nearly 3 percent of their total population which is far more than the United States need contemplate. Almost 60 percent of those new Canadians will come through employment-based channels.

And because different provinces have different labor shortage risks, Canadian lawmakers have allowed individual jurisdictions to set immigration criteria to meet their specific needs. The U.S. government should permit states the same flexibility. Vermont, with proportionately more older residents relative to the number of young people about to enter the workforce, has different immigration needs than Nevada, which has a relatively young population.

An added upside to this approach is that it could calm worries on both sides of the aisle about immigrants bringing down wages for native-born workers. Workers entering states where their skill-sets fill serious employment gaps won’t drive down wages for native-born workers. This approach of increasing employment-based visa limits while allowing states to alter their immigration according to their needs would increase growth in the U.S. economy. And if the Administration and new Congress pursued comprehensive reform in current talks, it could help them agree to re-open Uncle Sam. Such a deal could appeal to both parties, a necessity as we return to divided government, and also make a big difference for our economy.