Immigration Reform for the Long Run

The media and the book stalls seem of late to be full of doomsayers, particularly when it comes to the ill effects of aging populations. The Consensus Bureau, these pessimists note, estimates that the country by 2030 will have barely three people of working age for every dependent retiree. Such a lopsided mix of producers and consumers will, they forecast, distort finance and impair growth prospects. This demographic reality certainly levels such threats, but as the new book Thirty Tomorrows makes clear, their despair is misplaced. The countries facing aging populations, the United States included, have ways to relieve the strain, to supplement their relative loss of producing, tax-paying, pension-contributing workers. One way is through immigration.

Immigration also occupies headlines these days. Various interests have called for reform, all of them using the word in different ways. Some press amnesty for illegals, others demand stricter border control, while still others stress language rights and have called for cultural integrity, neither with especially clear definitions. For all the use this positioning has in the current milieu, it nonetheless has little relevance to the needs of the unfolding demographic challenge. That will require an entirely different kind of reform, one that increases the inflow of workers, to be sure, but more importantly, one that also screens immigration to find people who will help answer the country’s increasingly intense need for skilled labor.

The particular need with immigration and the demographic challenge is to find ways to trade off the economic contribution of newcomers with the social tensions that inevitably arise when they arrive in large numbers. It is all well and good to say that such tension is inappropriate, that newcomers and natives need neither to fear nor suspect each other, that people should reach across ethnic and language divides. It is sad that such high-minded advice is often ignored. But policy must deal with reality not with oughts and shoulds. This country already faces considerable tension over immigration even now when the foreign-born population amounts to only about 11 percent overall. Were the numbers to swell enough to meet the relative labor shortfall implicit in aging demographics, the degree of tension could become severe enough to erase any economic benefits from the enlarged workforce. Reform must avoid such an outcome.

The way for the country to get the most benefit with the least risk of social tension is to produce the greatest productive, tax-paying, and pension-contributing benefit from the smallest number of immigrants. In this effort, the various immigration experiences around the world have much to teach, both the successes and the failures. Europe can instruct the rest of the world mostly about what not to do. Immigrant communities there have largely failed to integrate into the economy, much less the larger culture, certainly much less so than in North America, for instance, where admittedly the record is far from perfect. Europe, for instance, could benefit from versions of practices already common in the United States and Canada. Its own version of a high-school equivalency diploma, for instance, would help. In the United States, it clearly facilitates immigrant job searches. Europe could make concessions on foreign languages, another gesture that has helped economic integration in Canada and the United States. Many in Europe are beginning to acknowledge these needs.

If Europe is behind in this matter, Canada seems to offer the most effective guidance. The Canadians have managed to combine a remarkably welcoming approach to immigrants with a system to assure the country’s labor needs. Ignoring any ethnic preference or even very much attention to family connections, Ottawa has implemented what could be called a point system. Prospective immigrants get points for fluency in either English or French, the country’s two official languages. They get additional points for years of education or job skills that the government believes the Canadian economy needs. Once a candidate earns enough points in this way, he or she gains entry. Canada then goes a step further. It connects these new residents to their respective national or ethnic advocacy groups. It is a kind gesture for the new immigrant, but it also serves Canada’s purposes well. Not only does the association guard against the anti-social behavior that can easily grow from a feeling of isolation, it also hastens the new immigrants’ job search and so also hastens the time when he or she will contribute to the economy, to tax revenue, and to public as well as private pension schemes.

In all probability, the practical limits on immigration will prevent it from fully answering the challenge of aging demographics. As Thirty Tomorrows shows, there are other avenues of relief: extending careers, for instance, increasing the number of women in the workplace, relying more thoroughly on international trade and globalization. But if handled properly through the kind of reforms described here, immigration can help answer much of the demographic challenge, to the benefit of this and other economies with similar challenges, and to the benefit of the immigrants themselves.

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