Is Immigration Reform Good for US Economy?

By Rick Welch on Nov 25, 2014

Last week immigration reform became the first issue to rise to the level of national debate since the mid term elections of November 4th. The decision by President Obama to exercise his executive authority in undertaking a reform of the US immigration system (last reform was during Reagan Administration in 1986) is viewed by many as the catalyst to getting a new Republican Congress to consider comprehensive immigration reform early in its 2015 legislative sessions. My intent here is not to discuss the political issues of any potential reform, but, to highlight some possible economic impacts (mostly positive) that could result from any real and concrete action in this area.

One benefit of reform could be an increase in the overall productivity of US workers - research suggests that in many sectors (agriculture being the exception) that immigrant workers serve as a complement rather that a substitute for US-born workers and the resultant productivity increases may lead to rising averages wages for all workers over the long term.  Any reform would provide a host of protections for American workers, including the recruiting of American workers before the hiring of high-skilled temporary foreign workers. According to a July 2013 report, prepared by the National Economic Council, the Domestic Policy Council and the Office of Management and Budget entitled The Economic Benefits of Fixing our Broken Immigration System, "commonsense immigration reform will lead to greater economic growth by adding more high-demand workers to the labor force, increasing capital investment and overall productivity, and attracting entrepreneurs to the US to start companies and create new jobs. The combined benefits of reform are enough to boost average annual GDP growth by a projected 0.3% over the next twenty years. From a fiscal standpoint, the additional taxes paid by new and legalizing immigrants would not only offset new spending, but would be substantial enough to reduce the federal deficit by $850 billion over the same twenty year period."

Any discussion of immigration reform must consider the many positive contributions made daily by immigrants to the US. A recent (11/21/2014) article posted to Fortune.com suggested that "high-skilled immigrants are good for America and we should encourage more of them to come here given recent trends in entrepreneurship, where more firms are dying than being created every year. But high-skilled immigrants could help turn that trend around - they are twice as likely to start businesses as native-born Americans. This is especially true in high-tech sectors, where immigrants are not only more likely to start firms, but also to patent new technological discoveries." To read the entire article please follow this link:
https://fortune.com/2014/11/20/even-piecemeal-immigration-reform-could-b...