Sharp Cuts in Immigration Threaten U.S. Economy and Innovation
Immigration to the United
States fell 70 percent in 2018 to only 200,000 people. Further, the Trump
administration plans to sharply reduce the number of refugees the United States
accepts, from the current limit of 30,000 to 18,000.
While President Donald Trump and his supporters may celebrate the falling immigration numbers, the decline represents a danger to the long-run health of the country’s economy, University of Chicago economist Austan Goolsbee writes in a recent article for The New York Times.
There are several reasons why low immigration rates will negatively affect the American economy. For one, the economy’s growth rate depends on population growth. And sustained immigration is why the U.S. population is expected to continue to grow over the next 40 years. Without it, economic growth will slow.
In addition, Social Security and Medicare rely on workers to pay for retirees. The expansion of the American workforce over the next 15 years — a period that will see the entire baby boom generation reach its Social Security retirement age — will come from immigration. “Lower immigration rates will mean serious funding shortfalls for older Americans,” Goolsbee writes.
Add in the fact that
immigrants start companies at twice the rate of native Americans — new
companies mean more jobs — and research shows that excluding immigrants harms
American innovation, and the news that immigration to the United States has
fallen to its lowest level in more than a decade is, Goolsbee writes, some of “the
scariest economic news we have seen in some time.”
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