1,470 Economists Urge Trump to Embrace Mass Immigration

Nearly 1,500 economists of different philosophical bents signed on to a letter this week urging President Donald Trump and Congress to “modernize” America’s immigration system to improve economic prosperity.

The signers include former Secretary of State George Schultz, former Sen. Phil Gramm (R-Texas), economic advisers to presidents dating to Ronald Reagan, and a half-dozen Nobel Prize winners. The letter notes that the signers have many conflicting views on the role of the free market and government regulation.

“If all that mattered is the size of the economy, then Bangladesh would be richer than New Zealand, because its economy is bigger.”

“But on some issues there is near-universal agreement,” the letter states. “One such issue concerns the broad economic benefit that immigrants to this country bring.”

Can 1,470 economists all be wrong?

The answer, according to critics of mass immigration, is an overwhelming yes — or at least that a blanket insistence that immigration is good leaves out important context.

Steven Camarota, director of research at the Center for Immigration Studies, said immigrants undoubtedly make the U.S. economy bigger. But that does not necessarily make it better for Americans, he said.

“There’s a huge difference between aggregate growth and per capita growth … and that’s all that matters,” said Camarota, whose Washington-based think tank favors immigration restrictions. “If all that mattered is the size of the economy, then Bangladesh would be richer than New Zealand, because its economy is bigger.”

Immigration advocates argue that Trump’s goal of boosting annual economic growth to the 3 percent range is not possible without more workers and consumers. That is because growth is a function of productivity plus labor, and, they argue, productivity gains are not sufficient to lift growth to that level.

According to the open letter targeted at the president and congressional leaders, immigration brings entrepreneurs who start businesses and create jobs, young workers to offset the aging domestic labor force, and diverse skills that help improve the productivity of Americans.

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But Camarota said not all immigrants bring unique value to the American economy. He said there is little evidence that lesser-educated, low-skill immigrants are more entrepreneurial than Americans or bring unique talents to the workforce.

“If they’re saying that more immigration by STEM [science, technology, engineering and math] graduates improves the economy, then that’s what they should say,” he said.

Alan Tonelson, an economic policy analyst who writes the RealityChek blog, said the emphasis on immigration over the other part of the growth formula is telling.

“It shows you just how weak American productivity growth in America has been,” he said.

Tonelson said an increase in the number of people relocating to United States does not guarantee rising wages or prosperity. Newcomers without much education in earlier immigration waves could get decent-paying jobs in factories. But those jobs have largely disappeared, he said.

“It would be nice if these economists paid more attention to coming up with ideas that would revive manufacturing,” he said, adding that the sector historically has been responsible for a disproportionate share of productivity gains.

Tonelson also disputed the contention that immigrants make the labor force younger. Much of the immigration system reunifies families, he noted. He said the parents of immigrants, who later follow their children to America, do not inject youth into the workforce.

Even some economists who favor more immigration recognize that costs can outweigh benefits if it is not done correctly.

“It is also true that the quality of the immigrants matters, too,” said Stephen Moore, a visiting fellow at the conservative Heritage Foundation and a former adviser to the Trump campaign. “We need to move more toward a skill-based immigration system.”

At the same time, Moore said, he talks to business leaders who complain of not being able to find workers with medium-level skills to fill job openings. Immigration must go hand in hand with productivity gains, he said.

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“We need both,” he said, adding tax cuts to that list as well. “We need more immigration. And we need more productivity.”

While many economists point to the sub-5 percent unemployment rate as evidence that the economy needs more immigrants, Camarota said that does not tell the whole story since the U.S. has experienced an “explosion of people of working age not working.”

According to the Bureau of Labor Statistics, 81.7 percent of Americans of prime working age — 25 to 57 — had jobs or were looking for them in March. That has recovered somewhat from its post-recession low but remains below the 83.3 percent mark registered in March 2008.

“If we’re going to draw these people back in … we’re going to need to have higher wages and more patient employers,” Camarota said. “The last thing we want to do is bring in more workers to compete with them.”

Added Tonelson: “That’s an alternative that America businesses have not had to resort to because the labor market isn’t all that tight,” because of immigration, he said.