The U.S. doesn’t have an immigration crisis. Illegal immigration halted a decade ago, and overall anti-immigration sentiment is down. But some immigration opponents question why the U.S. needs so much legal immigration in the first place. Presidential strategist Steve Bannon, for instance, said in an interview last year that legal immigration is “the real problem”:
“We’ve looked the other way on this legal immigration that’s kinda overwhelmed the country … 61 million, 20 percent of the country, is immigrants—is that not a massive problem?”
Bannon’s numbers are slightly wrong — the foreign-born population is just under 15 percent. But more importantly, the idea that immigrants constitute a “massive problem” is completely misguided.
High immigration levels are the historical norm in the U.S. Recent immigration levels are about the same as those of the late-19th and early-20th centuries.
Data on the foreign-born percent of the U.S. population goes back only to 1850. But data on new arrivals goes back even further. As economist Lyman Stone has documented, the early 19th century saw enormous influxes of German and Irish immigrants that, in percentage terms, dwarf anything that has come since.
These immigrants, the ancestors of tens of millions of Americans, built the U.S. Without them, the U.S. would now be a sparsely populated country like Australia, with a population of less than 25 million. The nation probably wouldn’t be the home of world-beating technology industries. The industrial might that allowed the U.S. to triumph in World War II and the Cold War would never have existed, and the Soviet Union would have dominated the globe in the second half of the 20th century.
That was then. What about now? The big reason that the U.S. needs to keep immigration going is to combat the aging of the population. Like almost all other rich countries, the U.S. doesn’t produce enough children to replenish the population. About 2.1 children per woman are needed to keep a country from shrinking, but the U.S. has only about 1.9.
Without immigration, the U.S. would look a lot more like Japan — a shrinking, graying society, with young people crushed under the economic burden of providing for the elderly. Social Security and Medicare would become impossibly expensive, as the tax burden for a larger and larger number of benefit recipients fell on a shrinking base of young taxpayers.
Immigrants — young, hard-working newcomers who help provide for the elderly native-born — are the only thing saving the U.S. from that fate. During the 1950s, when fertility was very high, low immigration levels weren’t a problem. But now, with the baby boom heading toward retirement and even the modest fertility rise of the 1990s and early 2000s fading, immigration is the only option for keeping the economy vibrant.
But that’s not the only reason the U.S. needs immigrants. Newcomers also start lots of businesses — far more, per person, than the native-born. As economists Sari Kerr and William Kerr show, 27.1 percent of entrepreneurs are immigrants, and 37.1 percent of new companies have at least one immigrant founder.
Why is this true? Native-born Americans often have to take over family businesses, leaving less opportunity for them to start new ones. Also, the people who immigrate to the U.S. tend to be risk-takers — after all, moving to a new country is itself a huge risk. That means that immigrant entrepreneurs are key to fighting the malaise of reduced dynamism that has afflicted the economy since the turn of the century.
There’s a third reason the U.S. economy needs immigrants — market size. Companies naturally want to locate their offices, factories, and research centers near the places where they sell their products. That’s why so many multinational companies have been investing in China, despite rising labor costs there. The U.S. can’t hope to match Asia as a population center — the number of people in China alone is four times larger. But because the U.S. is richer and more productive, it’s still a crucial market for multinational companies. That’s why so many companies build offices and factories in the U.S., providing jobs for native-born American workers.
But as the world’s economic center of gravity shifts toward Asia, the U.S. will have to work harder to maintain its advantage. A stagnant or declining population will make it much harder to convince the world’s companies that the U.S. is a place they need to be. Immigrants, especially the high-skilled, keep the U.S. indispensable for companies.
So there are many reasons why the U.S. depends crucially on continued immigration. Far from being a problem, as Bannon asserts, immigrants are a pillar propping up U.S. economic dominance. Knock out that pillar, and the edifice could very well crumble.
A national health care system is coming. I’m not making an endorsement. Call it a prediction. Last week the leader of the liberal party in Twin Falls County wrote a criticism of the Republican majority in the Idaho Legislature. He believes it’s a waste of time to debate increasing speed limits for passing on two-lane roads. Saturday night I attended the Lincoln Day festivities hosted by the Twin Falls County Republican Party. Twin Falls County Prosecuting Attorney Grant Loebs cited a figure. An astonishing 84.5 percent of all elective offices in Idaho are now occupied by Republicans and the numbers keep growing. Passing on two-lane highways is about convenience. The leftists don’t ever seem to understand even their own kind get stuck behind slowpokes. In the effort to Islamify Idaho and provide Johnny and Jimmy with access to the ladies room, the Democrats overlook Johnny, Jimmy and Ahmed would like an opportunity to pass slower drivers just as much as Republicans.
Unlike liberal dreams of coercing people into a worldview, many of the proposed Republican legislative bills come directly from the suggestions of constituents.
Which brings me to health care. Decent medical care at affordable cost is a universal want and not relegated to party affiliations. Somewhere in the internet ether is a YouTube video starring former Republican U.S. Rep. Ron Paul. The leader of the libertarian wing of the GOP released the video a decade ago. Dr. Paul stands outside the U.S. Capitol and explains in a succinct seven minutes the history of health insurance. The wheels came off in the early 1970s as President Nixon championed Health Maintenance Organizations, and the indemnity plans Dad had through work faded away. Insurance was for protection against catastrophic costs. Otherwise you paid for most visits to your doctor. An old argument explains if automobile insurance worked like medical insurance State Farm would cover a portion of your oil changes. Car insurance would also be very expensive.
On a winter day in 1990 I interviewed the daughter of Dr. Albert Schweitzer. She had worked alongside her father in a hospital in Africa. He died in 1965, but she explained not before predicting we were going to outstrip our ability to pay for modern medicine. Why? Because he saw our desire to live forever carried a heavy burden.
People across the Western world now are conditioned to expect a high level of care and a low level of cost. Economist Walter Williams explains politicians respond by hiding costs and fobbing off services as free. The political class has some unusual allies. The editorial page of the Wall Street Journal has long been friendly to the idea of a government-run health care system. It frees companies from an old covenant, and business tycoons believe it makes American firms more competitive with European and some Asian counterparts. Our new president also has a history of rumblings about a national health care system. You could argue it was one of the key reasons he fared so well in destroying the “blue wall” in the rustbelt states.
I started reading newspapers in grade school and watched the political activities of my parents from a young age (I was raised in a pro-union household and Mom and Dad were heavily involved in organized labor battles). Over half a century, I’ve made some observations about the political class. In order to perpetuate its personal interests, it compromises. It also is beholden to big donors. Really big donors welcome the notion of being free from providing employee health care benefits. Therefore, a national health care system is coming. In solid red states like Idaho it’ll be welcomed by both parties. Democrats get coverage for an estimated 75,000 to 80,000 without a plan. State Republicans can point at Washington and explain it’s a federal matter.
Two weeks ago I read a lengthy review of national health systems published by the Heritage Foundation. There are essentially seven different models operating in Europe, East Asia and North America (Canada). Some involve total government control from top to bottom while others are hybrids. None come with a cheap price tag. Most U.S. allies can claim some success because American taxpayers cover the cost of defending neighbors and friends and money is freed for other public promises. Stress some success because all of the systems have flaws, and most are paving the road to bankruptcy. Living in a nation with an estimated $20 trillion in federal debt and trillions more unfunded liabilities, at state and local levels can we afford a universal health system? Of course not! Will debt stop adoption of such a system? Of course not! When did running up the credit card stop our government from taking the easiest if not most costly approach? Of course not!
Business leaders will cheer but won’t be paying for the program. Liberals will demand higher corporate taxes, but short of holding the children of business executives as hostages it won’t happen. Businesses can pack up and go overseas at any time. High tariffs as punishment? Companies will find newer markets not so heavily indebted. An old phrase says you can have your cake but can’t eat it, and now you know the meaning.