Mediaboss Marketing

President Donald Trump needs a win, and immigration reform is a good candidate that could help rev up the economy.

Economists estimate potential growth by forecasting the sum of labor-force growth and productivity. Both have been declining in recent decades causing the profession to doubt the economy can expand at much more than the 2.1% annual pace accomplished during the recent recovery.

Immigration reform could help on both fronts.

Opinion Journals Mary Kissel and Business World Columnist Holman Jenkins Jr. on Paul Ryans healthcare reform showdown. Plus, the Paul Manafort pile-on, Senator Schumers Gorsuch gamble and Bari Weisss weekly book pick.

The United States has about 43 million immigrants and adds about 1.5 million each year but unlike Canada and several other industrialized countries, the United States places a much larger emphasis on family reunification in granting visas. The net number of illegal immigrants has remained unchanged in recent years, owing mostly to declining birth rates and strong economic growth in developing countries.

The United States grants green cards fairly automatically to spouses, children under 21 and parents of U.S. citizens. Subject to limits set by Congress and the president, it grants preferences to other relatives of citizens and legal immigrants, refugees, and those with job offers or who would make significant investments or contribute to economic growth.

The rules are complex but the upshot is that about 65% of immigrant visas are granted based on family ties, 15% on the basis of employment, and the remainder are mostly refugees or applicants who qualify for a provision for an underrepresented country.

The immigrant population tends to be considerably older than the native-born population, places a disproportionate burden on entitlements programs about half qualify for means-tested programs such as free school lunches and have less education, on average, than the native-born population.

According to an authoritative National Academy of Sciences study, immigrants in the workforce tend to be concentrated among two groups: those with less than a high school education folks who often do the jobs Americans wont take and those with more than a four-year college education new arrivals doing jobs that not enough Americans are not trained to do in information technology, science and engineering or requiring other advanced degrees.

The negative impact on wages of lower skilled workers is not profound. One likely reason is that the economy already has a considerable surplus of able-bodied adults not participating in the labor force, who could be encouraged to seek employment, if wages for unattractive jobs were not already hammered down to the barest levels for workers to subsist when supplemented by benefits like food stamps, Medicaid and the like.

However, the overall impact on growth is positiveafter all the potential of the information technology, medical, university and other R&D-intensive sectors is enhanced by the influx of high-skilled foreign workersand creates a net benefit by overwhelming the costs imposed by lower wages to unskilled workers.

Also, immigration stresses social cohesion. This tends to be concentrated in blue-collar communities who voted for Trump. However, visits to the office towers housing Manhattans financial industries or technology parks in Californiaand the communities where their workers liveattests to the notion that cultural affinities binding together professional groups tend to overwhelm ethnic differences among highly-skilled immigrant and native workers.

New technologies in robots and artificial intelligence await to dramatically boost productivity but those require more skilled workers than we haveour native population simply does not train for the skills needed in sufficient numberand the IT, manufacturing and several other sectors face a constant challenge to find enough skilled workers.

Hence, a better mix of immigrants could boost productivity and growth

Sen. Tom Cotton from Arkansas has introduced a bill that would limit family reunification visas to children and spouses but leave the employment quota unchanged. Thats a good start, but granting a visa to anyone with a college degree or technical skill, has a solid job offer and would not displace an incumbent legal worker would most positively boost the U.S. labor force as baby boomers retire.

A better balance of immigrants would accelerate the development and deployment of new technologies, reduce social stress associated with new arrivals and keep the Golden Door open to those it has always welcomedthe ambitious who can make the most of America.

View post:
Opinion: Immigration reform could be the win that Trump and the economy need - MarketWatch