Full Disclosure — this blogger is a 3rd-generation US citizen on his father's side compared to the sole occupant of the Oval Office who is a 2nd-generation US citizen on his mother's side. Perhaps that explains the current occupant's stupidity about immigration along with a healthy dose of inherited racism learned at his father's knee (and other low joints). Meanwhile we expend time and national treasure on a faux immigration crisis. If this is a (fair & balanced) diagnosis of racist stupidity and its cost, so be it.
[x New Yorker]
Why The United States Needs More Immigrants
By John Cassidy
TagCrowd Cloud of the following piece of writing
As controversy continued to rage on Thursday [last week] about the Trump Administration’s policy of separating migrant families at the southern border, the Census Bureau published new data that show why the United States will need more immigrants, not fewer, in the coming decades.
Demographers and economists have been warning that the aging baby-boomer population presents a serious challenge to the nation’s finances, as the ratio of seniors to working-age adults—the age-dependency ratio—rises. The reason is straightforward: Social Security and Medicare are largely financed on a pay-as-you-go basis, which means that some of the taxes paid by current workers are transferred to current retirees. If the dependency ratio rises, the financial burden on the working-age population also increases.
A front-page piece in Thursday’s Wall Street Journal pointed out that this problem was contained for a long time because the age-dependency ratio remained relatively steady. In 1980, there were nineteen Americans age sixty-five or older for every hundred Americans between the ages of eighteen and sixty-four. The dependency ratio was nineteen per cent. By 2010, it crept up to twenty-one per cent, an increase of just two percentage points in thirty years.
But the end of 2010 marked an important threshold. In 2011, the first members of the baby-boom generation (people born between 1946 and 1964) turned sixty-five. By 2017, the age-dependency ratio had risen to twenty-five per cent—an increase of four percentage points in just seven years. In the coming decades, it is expected to rise even more sharply. By 2030, “the ratio would climb to 35 retiree-age Americans for every 100 of working age. . . and 42 by 2060,” the Journal story said, citing projections released earlier this year.
These projections take into account the big rise in immigration that occurred between 1990 and 2010. During those twenty years, according to Census Bureau data, the total number of foreign-born people (documented and undocumented) living in the United States roughly doubled, to about forty million. But this influx of working-age people—the vast majority of whom are immigrants of working age—wasn’t enough to offset a decrease in birth rates that began in the nineteen-seventies and has recently accelerated.
The easiest way to grasp the seriousness of what is happening is to look at the fertility rate, which is the average number of babies born to mothers between the ages of fifteen and forty-four. Merely to replace the existing population, the fertility rate needs to be about 2.1 per cent. During the baby-boomer years, it reached 3.7 per cent. In 2017, it was just 1.76 per cent. If this trend persists, as it seems likely to do, it portends a declining population and a sharply rising dependency ratio.
From a public-finance perspective, there are several possible ways to tackle the looming challenge. One is to reduce the level of retirement benefits significantly—but that would be very unpopular and difficult to achieve politically. A second option is to increase the proportion of people who are working, among both working-age people and senior citizens. That, too, would be a mighty challenge, because the trend is going in the opposite direction. Since the start of 2000, the employment-to-population ratio among adults sixteen or older has fallen, from 64.6 per cent to 60.4 per cent, according to the Bureau of Labor Statistics. To be sure, the Great Recession and its aftermath were partly responsible for this decline. But so was the aging population: employment rates tend to decline in older-age cohorts.
The final option is to welcome more immigrants, particularly younger immigrants, so that, in the coming decades, they and their descendants will find work and contribute to the tax base. Almost all economists agree that immigration raises GDP and stimulates business development by increasing the supply of workers and entrepreneurs. There is some disagreement about the net fiscal impact of first-generation migrants. The argument is that they tend to be less educated and therefore earn lower wages than the native population, and that they tend to contribute less in taxes. But this is disputed. There is no doubt about the contribution that immigrant families make over the longer term, however.
“Second-generation adults—the children of immigrants—had, on average, a more favorable net fiscal impact for all government levels combined than either first-generation immigrants or the rest of the native-born population,” a study of the period from 1994–2013 by the National Academies of Sciences, Engineering, and Medicine, published in 2016, pointed out. “Reflecting their slightly higher educational achievement, as well as their higher wages and salaries, the second generation contributed more in taxes on a per capita basis during working ages than did their parents or other native-born Americans.”
In the long run, welcoming immigrants is a good investment for the United States. The entire history of the country demonstrates this fact. But the current President wants to go in the opposite direction. Along with introducing draconian measures to curb the influx of undocumented migrants, he wants to slash legal immigration. At the moment, the United States grants permanent-resident status to about a million people a year, and many of these folks go on to become US citizens. Trump wants to cut this number in half, roughly speaking.
His policy isn’t driven by economics, of course. As he more or less admitted earlier this year, with his derisive comments about immigrants from “shithole countries,” it is driven by racism and a desire to resist the emergence of a nonwhite majority in the United States—a transformation that is inevitable and necessary.
What’s largely driving this transformation is the aging of the white population and a concomitant fall in white birth rates. In twenty-six states, according to a recent study from the Applied Population Lab at the University of Wisconsin, deaths in the white population now outnumber births. In other words, the number of white people in America is declining. The new Census Bureau figures suggest that this is also true on the national level. In 2016 and 2017, the number of white, non-Hispanic Americans fell by forty-one thousand, according to the Journal report.
That number is partly an artifact of the opioid epidemic, but the underlying picture is clear: with the native white population aging rapidly, the US economy and fiscal system are in dire need of other groups to pick up the slack. Fortunately, there are eager candidates, including the roughly six million non-Americans who file immigration applications every year, and the thousands of parents and children currently languishing in detention centers operated by US immigration authorities and the Department of Health and Human Services.
This shortage of young people is far from just an American phenomenon. (In many European countries, the age-dependency ratio is rising even faster.) This doesn’t justify a policy of open borders. But it does mean that the United States needs a President who is willing to face the real challenges facing the country, and recognize the benefits of large-scale immigration. # # #
[John Cassidy has been a staff writer at The New Yorker since 1995. He has written many articles for the magazine, on topics ranging from Alan Greenspan and Ben Bernanke to the Iraqi oil industry and the economics of Hollywood. He also writes a column for The New Yorker’s Web site. He has written two books: Dot.Con: The Greatest Story Ever Sold (2002) and How Markets Fail: The Logic of Economic Calamities (2009). Cassidy received a BA (economics) from Oxford University (UK) as well as an MA (journalism) from Columbia University (NYC) and an MA (economics) from New York University (NYC).]
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