Restricting legal immigration to America won’t help our economy

In the immigration reform debate, President Trump has pressured lawmakers to reduce legal immigration in exchange for normalizing the status for recipients of Deferred Action for Childhood Arrivals (DACA). These are immigrants brought to the United States as children to whom President Obama granted temporary legal status by executive order. While Congress is considering multiple bills to extend protections for these individuals, it has yet to agree on a path forward.

President Trump has proposed granting 1.8 million young undocumented immigrants a path to citizenship, but argues this influx should be balanced by a reduction in legal immigration levels. He also contends current family-based immigration harms American workers by bringing in low-skilled immigrants. This trade, however, would not benefit the U.S. economy. The United States needs more access to immigrant workers and consumers to aid economic growth and help businesses meet their demand for labor.

{mosads}To reduce overall and family-based immigration levels, President Trump has proposed eliminating four visa categories that allow U.S. citizens to sponsor their siblings and both U.S. citizens and lawful permanent residents to sponsor their children over the age of 21. (Note that no current immigration categories allow U.S. citizens or lawful permanent residents to directly sponsor grandparents, cousins, or any other extended family.) Based on 2016 data, this change would reduce overall immigration levels by over 130,000 immigrants annually, or by about 11 percent.

Granting 1.8 million young undocumented immigrants the permanent right to live and work legally in the United States would benefit the economy. Current DACA recipients are represented in every industry of employment and collectively contribute nearly $42 billion to U.S. gross domestic product each year. They also provide roughly $3.4 billion to the Treasury Department. Alternatively, removing the DACA-eligible population would cost the federal government between $18 billion and $52 billion and shrink gross domestic product by $176 billion.

In contrast, the other side of President Trump’s proposal — reducing future flows of legal immigration to account for a one-time legalization of undocumented immigrants — would hurt the economy in several ways. Immigrants spur the economy by increasing the population, which boosts overall demand for products and services. In turn, this demand spurs new jobs for both immigrants and natives, and the economy grows. Decreasing legal immigration would reduce this demand and put a drag on employment for everyone.

Immigrants are also an instrumental addition to the U.S. labor force. Immigrants have a higher labor force participation rate than native-born Americans and start almost one-quarter of new businesses in the United States. Additionally, without immigration, the U.S. population would shrink, as birth rates in the United States have been below the level at which a generation can replace itself since 1971. This would cause corresponding decreases in both the labor force and overall economic activity. As baby boomers enter retirement, immigration is as vital as ever to a healthy labor force.

The argument that immigrants harm American workers is also flawed. Adding immigrant workers into the labor market does not reduce the total number of jobs available. Immigration creates jobs by generating new economic activity. Estimates suggest that every 100 new H-1B workers, or temporary high-skilled immigrants, result in an additional 183 jobs for U.S. natives, and every 100 new H-2B workers, or temporary low-skilled immigrants, generate an additional 464 jobs for U.S. natives.

This multiplier effect is in part because immigrants are imperfect substitutes for native workers. They have different language skills, education levels, and work preferences that lead them to seek different types of employment. This dynamic is especially true for low-skilled immigrants, who are in less direct competition with native workers for jobs. Furthermore, the United States is currently at full employment. With an overall unemployment rate of only 4.1 percent, it is difficult for some employers, especially in labor-intensive industries such as farming and forestry, to find the workers they need even after increasing wages.

Instead of eliminating family-based visa categories, President Trump should consider changing the total proportion of U.S. immigration allocated to family reunification. Only 14 percent of immigration to the United States is employment-based. This proportion stands in stark contrast to other countries, such as Australia and Canada, where 61 percent of immigrants are admitted based on employment. Increasing the pool of labor available to U.S. businesses would help ensure that industries with labor shortages such as agriculture, construction and health care have access to the workers they need.

By expanding employment-based immigration and making it easier for immigrants to live and work in the country, the United States can give immigrants the opportunity to reunite with their families while also productively contributing to the economy. For immigration policy to be successful, worker visas should be available to immigrants across all skill levels based on the current and future needs of U.S. businesses. Doing so will strengthen the U.S. economy.

Jacqueline Varas is director of immigration and trade policy at the American Action Forum in Washington, D.C.