End the shutdown with huge bipartisan immigration deal

The federal government entered the new year partially shut down. At the same time, the stock market rollercoaster has been raising fears about the economy. Amid all the tumult, it turns out that the White House and new Congress have an opportunity to kill two birds with one stone. The two birds? Reopening the government and strengthening the economy. The stone? Passing immigration policy as part of shutdown negotiations.

But our leaders should go big. A comprehensive immigration agreement can boost the economy while reopening the government. The crux of the deal should be increasing immigration levels, a goal more associated with Democrats, while increasing growth, which should satisfy Republicans. Baby boomers are retiring. Younger generations of native born workers will strain to fill the places of baby boomers in the workforce. We need more workers. On that note, there are two basic ways to add workers to the economy, which are raising them from birth or bringing them in from other countries. The two approaches impose sharply different costs.

{mosads}The first approach of raising and educating American children carries a high price tag. Households in the United States spend on average more than $233,000 raising each child through the age of 17. That figure excludes the annual public cost of $13,000 educating each child through age 17. The total public and private spending to raise the average native born child through age 17 reaches just over $400,000.

But the federal government and ultimately American taxpayers bear none of those costs if they pursue the second approach of bringing in more immigrants. Adding just 100,000 working age immigrants each year would bring skills into the economy that would cost $47 billion to obtain through rearing and educating native born children. The nation could do a much better job of tapping the willing and eager labor waiting overseas.

Current immigration law does encourage some immigration based on employment and skills, but these programs do not sufficiently meet our workforce needs. Take H1B admissions, which are dominated by computer programmers, software developers, and other technology experts. These are fields with few shortages. On the other hand, the law does little to fill gaps in fields that face severe shortages, like nursing and home health assistance. That is where more immigration can come in and fill the void.

If our leaders in the White House and new Congress look north to Canada, they can learn how to grow the labor force through smart immigration policies. The native born labor force in Canada is shrinking, so the country plans to accept more than one million immigrants in just the next three years, which is far more than the United States needs to contemplate. Almost 60 percent of them will come through employment channels.

Because different provinces have different labor shortage risks, Canadian lawmakers have allowed individual jurisdictions to set immigration criteria to meet their specific needs. Our federal government should permit states the same flexibility. Vermont, with more older residents proportional to the number of young people about to enter the workforce, has a different set of immigration needs than Nevada, with a relatively young population.

An upside to this approach is that it could calm worries on both sides of the aisle about immigrants bringing down wages for native born workers. Workers entering states where their skill sets fill serious employment gaps will not drive down wages for native born workers. Increasing visa limits based on employment and skills while allowing states to alter immigration policy according to their needs would promote growth and prosperity.

If the White House and new Congress pursued comprehensive reform in current talks, it could help them agree to finally reopen Uncle Sam. Such a deal could appeal to both parties, which is a necessity as we return to divided government, and also make a big difference for our economy.

Joseph Minarik is senior vice president and director of research at the Committee for Economic Development. He was chief economist for the Office of Management and Budget under President Clinton and author of “Sustaining Capitalism: Bipartisan Solutions to Restore Trust & Prosperity.”