The LuLac Edition #4 962, May 10th, 2023

 

WRITE ON WEDNESDAY

Our “Write On Wednesday” logo

If I hear one more white old pensioned fart in this area whine about the border and why we as a naton should keep immigrants of color out. I’m going to scream. The fact is the GOP has stoo in the way pf immigration reform because it is a good message for them. Their white base is pretty racist and every course they are going to demonize those people. But here’s an article that tells us why immigrants can drive and even save an economy.

 

 IMMIGRANTS HELP POWER AMERICAN ECONOMY, AND THEY ARE NEEDED NOW

For a country built upon the shoulders, minds and work ethic of immigrant populations, we have a strange view of today’s new arrivals.

Unfortunately, many new immigrants are regarded disparagingly, no doubt mostly because of the surge of illegals that have recently crossed our borders. The fact of the matter is that immigrants contribute to our economy in many ways. For instance, in 2019 immigrant entrepreneurs generated $88.5 billion in income for the U.S. economy.

Immigrants have a long history of creating businesses in the U.S.

Almost 45% of Fortune 500 companies were founded by immigrants or the children of immigrants. A 2019 study by the non-partisan New American Economy found that immigrants paid $492 billion in taxes. Even undocumented immigrants pay their taxes generating $11.7 billion in state and local taxes annually. Further, many undocumented immigrants also pay federal income taxes. For the last 25 years, most immigrants are given an Individual Taxpayer Identification Number and as a result, according to the IRS, a vast majority of the estimated undocumented immigrants are paying taxes yet are ineligible for many of the benefits citizens receive.

While immigrants have always been an integral part of the American economy, today their roles are even more important.

One of the prime reasons for today’s inflation is that there are too few people in the work force. The work force participation rate, the percentage of the U.S. population employed, stands at 62.5%. Further, Americans are working 30 minutes less per week than they were before the pandemic. Cumulatively, that lost time is equivalent to 2.3 million fewer workers according to University of Maryland economist Katharine Abraham.

During the pandemic workers were laid off. In addition, the availability of government subsidies caused many Americans to leave their jobs voluntarily.

As a result, the workforce has yet to recover. This short-term problem has been exacerbated by increases in American life-expectancy. Like many mature economies, the U.S. faces the problem of not enough active workers to help cover the costs of retirees. The result of these two pressing realities has been worker shortages which have cut into economic productivity and created inflation.

In the service sector, in particular, the lack of workers has caused wage-price spirals that all of us feel. Ironically, it is these service sector jobs that recent immigrants have historically filled.

With inflation standing at 6.5% and a worker shortage pushing up wages, it is little wonder that the U.S. economy grew at a meager 2.1% in 2022, down from almost 6% in 2021. The Fed’s decision to raise interest rates quickly, in response to significant inflation, represents the only tool that a central bank has to stave off inflation. However, along the way, rising interest rates tend to have significant unintended negative effects upon the economy.

Witness the Silicon Valley Bank debacle and the resulting drying up of loanable capital across the banking sector.

The net result of all this is an anemic U.S. growth projected to be 1.6% this year while China’s economy is growing at 3.9%. The Fed’s monetary policy alone cannot remedy this situation.

Here is where immigration comes in. An effective immigration policy that would ensure a well-paced immigrant flow of individuals willing to pay their taxes, participate in the economy, educate their children and become part of the American dream is the optimal way to address the economic morass in which we find ourselves.

The economic rationale for such policies is clear. That is why 14,700 economists, representing all sides of the political spectrum and including Nobel Laureates, signed a letter to the White House and Congress in 2017, pointing to the importance of immigration as a prime driver of economic prosperity.

If we had followed their advice several years ago and developed a thoughtful immigration policy, we would be much better off today.

A coherent immigration policy is not just a problem of border states. It is also not just a humanitarian problem, although the photos of families living on the streets of El Paso for the chance to come here and work pull at our heartstrings. It is both an immediate and long-term economic problem and should be addressed accordingly.