Immigration: The Most Important Economic Issue

Matt Yglesias at Slate speaks some important truths about a topic not touched on in the presidential debate: immigration.

Imagine a counterfactual history of the United States in which we had slightly different tax and budget policies over the centuries, and you're imagining an extremely boring scenario. Most likely, things would be about the same. But imagine a counterfactual history of the United States in which we never opened our borders to the ethnic "others" of the past—the Catholics and Jews of Eastern and Southern Europe, then more recently Asians and Latin Americans. That is a very different vision of America. Not a bad place, necessarily, but probably one that looks a lot more like New Zealand….

— Inadequate supply of workers with certain specialized skills. — Inadequate demand for U.S.-made goods and services. — Endemic malgovernment and lack of democracy in many countries. — Funding problems for the popular and successful Social Security system.
— Growing anxiety about America's ability to retain a strategic advantage vis-a-vis China. These are problems that could be relatively easily ameliorated through better immigration policy. You start with the literally billions of people in the world suffering from malgovernment either in the form of lack of democracy (Russia, China), endemic corruption (India), poor macroeconomic management (Japan), rampant rent-seeking (Italy, Mexico), or lack of state capacity to perform basic governance functions (most of Africa)….

That's help on the supply side that becomes help on the demand side. Two demand side things happen when someone moves to the United States. One is that since their income rises, their volume of consumption rises. The other is that even in today's global economy, you're going to buy many more US-made goods and services if you live in Dallas or Denver rather than Dalian or Djibouti or Dominica…..

Our politicians talk, constantly, about how the United States is "the greatest country on earth" but they're oddly reluctant to pursue the policy implications of the fact that millions of people around the world agree with them about that. We treat the desire to migrate here with suspicion, as a problem we need to solve with better guards and biometric identity verification systems rather than as something that should be taken at face value. The United States of America is a much better-than-average place to live. Lots of people would like to move here. Taking advantage of that fact has, historically, been far and away the biggest contributor to American national greatness…

If you believe in ameliorating the lot of the less well-off in the world, you one-percent/99 percenters, and not just bettering your position vs. people richer than you, the most important thing you can do is be for more open immigration. 

Adam Ozimek at Forbes thinks that any economics writer who isn't stressing these points about immigration is guilty of professional malpractice:

It's the most important economic issue of our time, far more important than tax reform, and it is a lever that could help improve a lot of problems we have in this country. We should be shouting this from the rooftops daily.

Reason's classic 2006 cover story, "Immigration Now, Immigration Tomorrow, Immigration Forever."