Cato Institute Analyzes the Benefits of Immigration for the United States

Federal Money

The Winter 2012 issue of the Cato Journal is devoted to answering a single question: “Is Immigration Good for America?” In 13 articles, 16 scholars answer with a resounding “Yes!” The consensus is that immigrants provide a net benefit to the U.S. economy and to U.S. workers. There is also a consensus among the authors that the current immigration system, with its patchwork of arbitrary numerical caps, needlessly squanders the full economic potential of immigration. The authors call for a thorough revamping of the immigration system to make it more responsive to labor demand, to attract highly skilled professionals and entrepreneurs, and to offer a pathway to legal status for the unauthorized population.

Here are highlights from the issue:

  • Daniel T. Griswold, former Director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute, concludes that “basic economic analysis and numerous empirical studies have confirmed that immigrants boost the productive capacity of the United States through their labor, their human capital, and their entrepreneurial spirit. Instead of competing head-to-head with American workers, immigrants typically complement native-born workers by filling niches in the labor market.”
  • Joel Kotkin, Distinguished Presidential Fellow at Chapman University, and Erika Ozuna, Research Fellow at Pepperdine University, say that “the United States should make efforts to keep entrepreneurs and all kinds of skilled workers, whom the country will need, particularly as the Baby Boom generation retires.” The authors warn that “if attitudes harden against immigration, America will sacrifice much of its demographic and cultural uniqueness. We would also suffer the loss of a major source of entrepreneurial growth and innovation.”
  • Stuart Anderson, Executive Director of the National Foundation for American Policy, points out that “fixing problems with the U.S. legal immigration system does not involve raising or reducing federal spending, or designing elaborate new agencies or policies. In general, much can be accomplished by simply raising the quotas for temporary visas for both low- and high-skilled workers and increasing the number of green cards available for family and employer-sponsored immigrants.”
  • Pia M. Orrenius, Senior Economist at the Federal Reserve Bank of Dallas, and Madeline Zavodny, Professor of Economics at Agnes Scott College, argue that “it seems virtually inevitable that the United States will conduct a legalization program at some point given the size of the undocumented population.” However, research on the failings of the 1986 legalization demonstrates the “importance of enacting a legalization program only in the context of comprehensive immigration reform designed to reduce future unauthorized inflows as much as possible.”
  • Raúl Hinojosa-Ojeda, Founding Director of the North American Integration and Development Center at the University of California, Los Angeles, describes how “legalizing currently unauthorized immigrants and creating flexible legal limits on future immigration in the context of full labor rights would raise wages, increase consumption, create jobs, and generate additional tax revenue—particularly in those sectors of the U.S. economy now characterized by the lowest wages.”

In sum, the contributors to this issue of the Cato Journal make a compelling case for the creation of a rational immigration system that offers the greatest benefit to both immigrant and native-born workers, and which adds the greatest value to the U.S. economy. As the authors emphasize, this would be a welcome change from the current dysfunctional system, which has facilitated the growth of an unauthorized population now numbering 11 million. While the federal government may be unwilling to tackle immigration reform, the status quo is clearly unacceptable—and unsustainable.

Photo by 401K.

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