| Michael Eustice| December 3rd, 2018 |
Recent increases in international connectivity due to globalism have ushered a new era of economic prosperity. Enhanced global communication, stemming from globalism, has unleashed the potential of market economies, significantly increasing the ability of goods and services to be transported around the world in a cost-efficient manner. Globalism draws those previously unable to immigrate to more prosperous nations the opportunity to do so. While globalism may spark the desire to immigrate to a more prosperous nation, recipient governments regulate who joins their nation to ensure they remain safe and stable. A government’s primary concern is to protect its current citizens and enable their prosperity. Nations are by definition exclusive. At the same time, there is evidence that open borders and liberal immigration policy can spur economic growth. This forces governments to find a policy that maximizes both border security and enables productive immigration. Many contemporary politicians argue these are mutually exclusive outcomes; you must choose either safe and closed borders or economic growth and a flood of unvetted immigrants. Furthermore, some even refute the claim that immigration can have a positive impact on the recipient’s economy.
Below, I will respond to the claims of a mutually exclusive relationship between national security and positive economic effects of sensible immigration policy. I argue for policies that consider and mitigate security threats and enables productive labor to immigrate to our nation.
First, I will address the claims of many politicians that immigration is bad for the economy. They argue that the wave of low skilled labor drives supply of labor up and in turn applies downward pressure on wages. There is some truth to this claim. Per US Census statistics over the last two decades, immigration is accountable for the number of workers without a high school diploma to increase by a quarter. They determined this increase in the low-skilled labor supply has dropped the annual average income of workers without high school diplomas by $800-$1000. This reduction in income also affects the segment of the economy that is most sensitive to reductions to income. Yet this reduction to labor costs means that many domestic companies retain more revenue and grow at a faster rate. This keeps more money at home, enables domestic producers to grow, and creates more domestic jobs. Both the greater retained income and job creation are due to the growth enabled from lower labor costs. Therefore, low-skilled domestic workers could also see increased job opportunities due to the growth initiated by lower labor costs. Lower labor costs could also impact the price of goods offered by domestic producers, leading to lower costs for domestic consumers and making exports more attractive on international markets. Therefore, the reduction to labor costs could increase the wealth of domestic consumers, increase the revenue retained by domestic producers, and make domestic products more competitive in international markets. These benefits outweigh the single negative effect of reduced wages for the lowest-skilled laborers in that they have nationwide implications instead of narrow ones. It is possible the lower prices offered could soften the impact of lower wages on low-skilled labor.
The types of labor that tends to immigrate is essential if we wish to remain leaders in the global economy. There are two types of workers that comprise the majority of immigrants, high-skilled labor and low-skilled labor. This has massive implications for how immigration affects the US economy.
In recent years, we have seen a massive influx of college and postgraduate educated labor from abroad. Typically, this high-skilled labor is originated in southern and southeast Asia. In a study conducted by the Pew Research Center, in 2016 30% of immigrants over 25 years old had at least a bachelor’s degree. The same study found that immigrants of the same age, 12.8% had a postgraduate degree of some form. High-skilled labor allows our world-class tech and service-based economy to continue to flourish. Attracting and retaining the world’s doctors, lawyers, computer scientists, and other high-skilled labor cements America as the leader for these industries. While other nations lose such workers, we get them. In another study, published by National Foundation for American Policy (NFAP), they found that immigrants comprise about 70% the senior leadership of US-based companies valued at or above one billion dollars, hereafter “unicorns”. Reviewing the same companies also shows that 44 out of 87 “unicorns” were started by immigrants. Furthermore, nearly 40% of Fortune 500 companies were founded by immigrants or first-generation Americans. The NFAP study also found that out of the 44 foreign-born unicorn founders, 20 of which came to the US as students before starting their companies. When viewed with the Pew Research Center statistics, this serves as a strong evidence of the contributions immigrants make to the US economy. Immigrants disproportionally contribute to the high-skilled, tech and service-based economy. These jobs generate more Gross Domestic Product growth, through higher wages and cost of service, and more tax revenue, though the higher wage soliciting increased tax payments. It is imperative that the US continues to attract highly skilled labor from abroad. Some policies that could continue this trend include granting preferential treatment to college or postgraduate degree holders during the immigration application, initially granting international-student visa well past their graduation dates, increasing H-1B temporary work visa quotas for both total amount and quantity reserved for postgraduates, and loosening limits of immigrants by continents. This would incentivize foreign high skilled labor to move to the US. It would also signal to international students they are encouraged to stay and use their new skills here as opposed to returning to their home country.
The other segment of immigrants is workers without a high school diploma. This is also an essential sector of the labor market that the US needs in order to remain competitive. The number of Americans with some college or bachelor degrees is rising. These American do not want low skilled labor jobs, nor would it be efficient to employ them in such a way. Low-skilled foreign-born labor alleviates any incongruencies created by increasing the number of college graduates and continuing low-skilled labor demands. When holistically viewing the flow of labor the influx of high-skilled and low-skilled labor allows the US economy to remain the world’s economic hegemony.
While it is proven that the vast majority of immigrants are coming for economic opportunity and to contribute to the American economy, we must stay vigilant in thoroughly vetting immigrants. Areas where the majority of high-skilled and low-skilled labor immigrate from are rife with conflict or threats to national security. Most high-skilled labor immigrants from southern and southeast Asia. The security risk presented by such nations include Islamist extremists, infiltration by foreign intelligence agents and stolen intellectual property. We can mitigate these risks by requiring immigrant applicants to pass background checks, prove no affiliation with extremist groups or foreign governments, and offer citizenship to international students conditional they graduate, complete English language courses, and accept a job in the US. This will signal to immigrants they are welcomed and encourage them to contribute to the economy. To supplement laws regulating the flow of labor from these countries into America, we must also negotiate agreements with countries of many high-skilled laborers to ensure they support American intellectual property laws. This will help us retain the product of high-skilled labor and prevent it from being used or copied abroad. Low-skilled labor typically comes from Central and South America. The security threat this region presents is drug trafficking and the violence surrounding the “black” market. It is particularly challenging to vet these immigrants because of unreliable documentation in many Central and South American nations. To mitigate the risk presented by this population of immigrants, we should accept them pending enrollment into approved English language courses,* clean criminal record, and demonstrated intent of holding a job. We should make a path to citizenship very smooth once they have lived in the United States for several years, completed the English language course, maintained a clean criminal record and maintained employment. This signals to low-skilled immigrants they are expected to contribute to society and lets them know they are welcomed here no matter their heritage, as long they are willing to make minor adjustments to the American way of life such as learn English. Furthermore, there is weak evidence that being a low-skilled immigrant is causation for crime or incarceration. When comparing rates of young male citizen incarceration rates and central and South American immigrant young male incarceration rates we find they are very similar. The larger driving force behind these arrests is typically poverty. By offering English language, American culture, and job training we could prevent at-risk immigrants from causing crime.
By attracting both the high and low skilled labor from abroad, we will build a more robust American economy. It will enable America to remain as the global economic leader. Welcoming talented people no matter their national origin is a uniquely American practice. While our past is by no means absent of xenophobia or bigotry, America has always been a land of opportunity for anyone willing and able to make the long and sometimes dangerous journey. We must not forget our history, as this nation has been, is, and always will be the Great Melting Pot; a nation of immigrants. This heritage has enabled America to become and remain the greatest nation on Earth. Adapting current immigration policy to keep this tradition while not ignoring the security threats we face will help the US build a robust economy, keep our borders safe, and remain global leaders.
*English language courses should be free to immigrants that fulfill all other citizenship criteria. Furthermore, the course must emphasize verbal and written communication and include education about American society, culture, and social norms. This will enable deeper and smooth integration into American society.
Michael Eustice is a senior majoring in Economics with a certificate in Political Economy, Philosophy and Politics. Michael’s hometown is Rockville, MD and is interested in economics and with an intersection with international relations and national security.