What Canada can teach the US about immigration reform
Shared goals are at the heart of all good deals. Congress and President Trump are furiously negotiating a deal on the "Dreamers" and the Deferred Action for Childhood Arrivals, known as DACA, to keep the government from shutting down on January 19. A broader immigration package will come next.
One of the shared goals of immigration reform can, and should, be economic growth. Fortunately, a net positive for national GDP – which is a requirement for Republican support – can be achieved through the right increases in immigration levels, which are needed for Democrat support. A strategic, economically driven approach to increased immigration is a deal that the president and members of Congress should broker this year.
Stagnant labor force growth is, and will continue to be, a drag on the U.S. economy. The population of native-born 18-to-64-year-old workers in the U.S. will expand by just 0.1 percent per year on average over the next ten years. This flat line of human capital means less output and persistently lower economic growth.
While the economic need to add workers to our population is unquestionable, the two potential sources of workers do carry different costs and considerations.
"Canada plans to accept close to one million immigrants in just the next three years – almost 60 percent of whom will come through employment-based channels. Compare that to only 14 percent of immigrants currently coming into the U.S. through employment-based programs."
Raising and educating children is expensive. The U.S. Department of Agriculture estimates that American households spend an average of around $260,000 raising a child to the age of 17. Add to that the public cost of educating a child through age 17, which the National Center for Education Statistics prices at more than $11,000, per pupil, per year. This means the combined public and private spending to raise the average native-born child through age 17 reaches just over $400,000.
An educated, working-age immigrant, on the other hand, carries no such cost for the U.S.
Recent analysis by the Committee for Economic Development indicates that adding just 100,000 working-age immigrants per year provides an infusion of human capital that would cost $47 billion to obtain through education and child rearing spending on native-born workers.
Combined with ready-to-work immigrants who come to the U.S. with a bachelor's degree in hand, foreign-born workers provide a value of human capital to our economy worth $314 billion per year, equivalent to 1.9 percent of GDP.
Current law does encourage some immigration based on skills and employment, but the parameters of these programs are both outdated and insufficient to meet workforce needs.
H-1B admissions, for example, are dominated by computer programmers, software developers and others in computer-related occupations – fields where researchers do not anticipate labor shortages due to limited retirements and large numbers of new entrants in those jobs.
Meanwhile, current law makes it difficult for foreign-born nurses and home health aides – fields that face significant worker shortages – to come to the U.S.
The Administration and Congress might look to our neighbors in Canada for ideas about growing our labor force through smart immigration increases. In Canada, the native-born labor force is declining in size.
Canada plans to accept close to one million immigrants in just the next three years – nearly three percent of their total population – almost 60 percent of whom will come through employment-based channels. Compare that to only 14 percent of immigrants currently coming into the U.S. through employment-based programs.
Canada also factors geography into their immigration policy. Knowing that different provinces have different labor shortage risks, Canadian lawmakers have allowed individual provinces to select immigration criteria to meet their specific needs.
Here in the U.S., states should have the same flexibility. For example, a state like Maine – with large numbers of 50-to-60-year-old residents relative to the number of young people about to enter the workforce – has very different immigration needs when compared to a state like Utah, which has a relatively young population.
Being mindful of geography can also address concerns around the potential for downward pressure on wages for native-born workers. If workers come into the states where they are needed most, the likelihood of negative impact on the native-born labor force is reduced. When managed strategically, immigration creates additional consumer demand, which is good news for all workers.
Significantly raising the level of employment-based visa limits, and allowing each state to tailor its intake according to their workforce needs, would allow the U.S. economy to efficiently capture the employment-ready, educated workers we need for more robust economic growth.
Reforming the nation's immigration system by attracting educated, working-age people who will add to the American economy is also the kind of sound policy deal on which the Administration and Congress should agree. It will improve economic growth by boosting both the quality and quantity of available workers without reducing opportunities for native-born workers: An artful deal, based on shared goals.
Commentary by Steve Odland, the CEO of the Committee for Economic Development and former CEO of Office Depot and AutoZone. Read CED's new immigration report here. Follow Steve Odland on Twitter @CEDUpdate and @SteveOdland .
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