Flickr/cliff1066â„¢For a nation of immigrants, America is acting pretty hostile to those currently trying to enter her borders.
Immigration reform is now at the forefront of the national debate, but the thorny intricacies make it one of the most difficult problems to solve.
Here, we’ll look at the impact immigrants have on the economy, the social safety net, and the long term viability of entitlement programs. We’ll look at who the immigrants are — everyone from CEOs to inmates —and where they came from, as well as where all Americans are headed together.
At the moment the U.S is in the midst of a second major influx of immigration. As in the early 20th century, the influx has proven divisive among current citizens.
In 1993, 8% of the U.S. population is comprised of people who were born somewhere else, and that figure is rising.
Projections show that the annual number of new immigrants is set to rise annually. From 2070-2075, the intermediate projection has the U.S. receiving an estimated 2.1 million new immigrants annually, up from around 1.5 million between 2005 to 2010.
Between 2005 to 2050, new immigrants and their descendants will account for 82% of U.S. population growth, according to the Pew Hispanic Research centre.
By 2050, the nation's population is estimated to grow to 438 million, up from 296 million in 2005 — 117 million of these new Americans will be immigrants or the children of new immigrants.
Between 2010 and 2030, first- and second-generation immigrants together are projected to account for all growth of the U.S. labour force.
When it comes to undocumented immigrants — those who came here illegally — they're from all over the world, but the majority are from Mexico.
unauthorised immigrants in the U.S. have often laid down roots in the country — 63% of unauthorised immigrants have been here for more than 10 years, and 85% have been here more than 5 years.
The symbiotic relationship between American businesses and immigrant workers is one of the most important pieces of the immigration puzzle.
One effect of this influx of productive workers is a major contribution to the GDP. After all, there's an intimate relationship between population, productivity and GDP growth.
Employing undocumented workers gives firms a competitive advantage. Huge swathes of workers in crucial industries are undocumented.
As a result, it's common for businesses to rely on undocumented workers. More than 1 in 5 firms in the hospitality industry, 1 in 5 firms in agriculture, and 15% of manufacturing firms employ undocumented workers.
Immigration's impact on a U.S. native-born worker's wages varies. Immigration has a negative effect on low-skill Americans' wages. However, the net effect for all Americans is positive overall.
Immigration doesn't exacerbate wage inequality by driving wages down. Immigration accounts for a very small share (5%) of the increase in U.S. wage inequality between 1980 and 2000.
Immigrants are also overrepresented in some of the fastest growing industries including home health aides, translators and tradesmen.
The U.S. may need to work on its work visa system, particularly the H-1B visa which is used to recruit high-skill technology workers. Currently, there is a cap on the number of H-1B visas issued each year. As a result, STEM professionals on student visas are being forced out because they can't work here, leading to a brain drain.
H-1Bs bring high-talent immigrants to the U.S. Many of these immigrants go on to found their own firms — half of all U.S. tech and engineering firms have foreign-born founders.
There's an economic stimulus generated with each immigrant to the U.S. That stimulus is increased with H-1B talent, and even more so with immigrants in Science, Technology, Engineering or maths (STEM) professions.
That's a shame, because the stimulus effect from foreign-born workers with advanced and STEM degrees is huge.
The impact that immigrants have on government social safety net programs is another important consideration when developing an immigration reform policy.
As with native-born Americans, immigrants cost taxpayers when they are young and old, but make up for it during their years in the workforce.
In fact, immigrants are crucial for the sustainability of many social safety net programs because of their relative youth and fecundity compared to native-born Americans. The dependency ratio is expressed as the number of children and elderly supported by 100 working age Americans. In 2005, that number was 59, but it is expected to rise to 72 by 2050.
According to the Social Security Administration, higher than projected immigration will decrease that ratio to 69 retired and underage Americans supported by every 100 working age people, which is good for the program. Slower immigration will increase it to 75. In other words, young immigrants are a crucial to the sustainability of entitlement programs.
A primary driver of government deficits is health care spending. However, immigrants spend less than native-born Americans on health care.
In 2009, immigrants contributed far more through taxes than they took from major government programs.
Higher immigration isn't correlated to higher taxes, but there's evidence that immigration has led to lower benefits for welfare recipients, according to a study by Jens Hainmueller of MIT and Michael J. Hiscox of Harvard University.
When it comes to draining U.S. resources, though, the foreign-born impact on the U.S. prison system can't be ignored.
On one hand, immigrants are not disproportionally institutionalized, and seem to avoid the prison system more than native-born Americans.
But only 74% of the prison population is comprised of United States citizens. When a quarter of the prison system is made of foreign nationals, that's a drain on U.S. resources.
Incarcerating border crossers also costs the U.S. a fortune. The DHS has a $18 billion immigration enforcement budget, and has seen a 49% increase in detainee prison population since 2005. Private prison contractors GEO Group and CCA reported a combined $1.3 billion haul from federal sources in 2011.
While enforcement costs continue to spiral upward, the annual undocumented immigrant population has decreased since 2006.
Meanwhile, apprehensions of immigrants have slowed. Fewer people are coming into the country — primarily because of the slow economy — which means that there are fewer people being caught. As a result, the cost per apprehension in 2008 was more than 11 times higher than it was during the Clinton administration.
So why bother with immigration reform? When it comes down to it, immigrants are essential for the long term sustainability of the U.S. Let's look at two other countries — one with an aggressive anti-immigration policy, one with relatively open borders — to see the long term impact of immigration reform.
Immigrants trend younger than the rest of the U.S. population. This is crucial for the financial integrity of entitlement programs, as immigrants will fill in the declining native-born work force.
Japan, which has a low birth rate and an aggressive immigration stance, is headed for population disaster. An ageing population and declining fertility rates have forced the country's dwindling working class to care for a swelling elderly society.
By 2040, Japan will be a contracting society. Native Japanese have outstandingly low birth rates, and anti-immigration policies exclude high-fertility migrants whose children would shore up the workforce of 2040.
By 2060, Japan will see its population collapse. In nations with low native birth rates, immigration ensures sustainability. When immigrants are excluded, demographic disaster eventually ensues.
By 2050, Sweden looks pretty much the same that it did in 2010: 250,000 to 350,000 people per population segment, with the exception of a large group over 80 due to increased life spans. While the white European birth rate declines, the immigrant birth rate remains high. Sweden is demographically safe.
The proposal to deport 8.6 million unauthorised immigrants — besides harming GDP — will cost a fortune. The cost to deport every current undocumented immigrant is estimated to be $285 billion over five years.
Mass deportation would lead to $2.6 trillion lost from U.S. GDP over 10 years. A temporary worker program has a net positive effect, leading to $792 billion in GDP growth. Comprehensive reform is the best thing for the economy, leading to $1.5 trillion in GDP growth.
Overall, a legislative proposal that converts undocumented workers into taxpayers will have compounding positive effects on the economy.
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