Several economists and financial experts believe that the current recession and financial crisis will be exacerbated by the changing demographics in our country. Starting in 2008, the baby-boomer generation, which numbers slightly fewer than 100 Million, will start to retire and eventually require substantial expenditures in social security and medical benefits, while at the same time reducing its contributions to tax and social security revenues. What makes this inevitable change more stark is that the baby boomer generation reached its prime earning power only a few years ago, significantly impacting the stock market during the boom years by making large investments in 401Ks and other pension plans, boosting the demands for stocks and related securities.
Furthermore, as the baby boomer generation retires, many of them will vacate their big homes for smaller, less expensive apartments and condos. This will immediately impact the housing market and, as they start to pass away, the supply of real estate in all categories will increase relative to the available demands.
While the United States is aging, emerging markets such as China and India are booming with younger generations that will create a new middle class. As the aging baby boomers in the United States increasingly need to finance their retirement needs, they will be selling their stocks in the U.S. industry to the middle class in the emerging markets, leading to a transfer of wealth and influence from the U.S. to overseas markets.
At such a time, the need to increase immigration admission levels to the United States has never been more acute. We need young professionals in their 20’s and 30’s to immigrate to the United States in large numbers to fill in the huge gap left by retiring, and aging baby boomers. We need them to add to our tax and social security base. We need them to continue the trend of innovation that has characterized our country. In the current economic and housing crises, a new flux of immigrants would also support the purchase of homes and help stabilize the economy. In addition, in pure economic terms, we also need the undocumented population so they can provide, for reasonable prices, services that many U.S. citizens are not willing or able to do. Their presence has helped us contain inflation. This is a better option than removing them to their countries, which is not only harmful to our economy, but also destroys their family unity and deprives them of the ability to support others back home.
Unfortunately, the public sentiment has been used and abused by many politicians in exactly the opposite direction. In recent years, in order to score easy political points, many politicians and others in the media seeking publicity, have utilized demagoguery to agitate the public by blaming all of our society’s ills on immigration. With the onset of the current severe recession and possible depression, a public enticed by emotions and hysteria will only make the anti-immigrant sentiments worse.
Therefore, despite the need to open the doors to young professionals for work visas and green cards, despite the need to make the process less expensive and quicker, and despite our need for those who have already resided among us to remain, the trend is to create obstacles to prevent immigration.
The basic argument that an immigrant takes an American’s job is at best a one sided view. For, while an immigrant may hold a job, he will also add to the consumer side of the equation. In other words, he will become part of the consuming public, occupying a home, renting an apartment, buying groceries, electronics and so on. Furthermore, if this immigrant has a family, they will also be consumers. Moreover, many of those immigrants, especially in the professional H-1B and green card category, come to this country well-educated, sparing this country the cost of having to educate a professional and to spend money on them. The average cost of raising a child through college in the United States is about $250,000.00. When we accept an immigrant who is already a professional, we are getting a member of society who is already able to add knowledge, to work, and to contribute to the tax and social security base with little or no investment on our part.
In addition to immigrants becoming part of the consuming public, many of them open new businesses and in the case of foreign students studying at universities, their innovations add new opportunities for new jobs. Therefore, when assessing whether an immigrant would be an asset or a burden to our economy, one needs to balance the cost versus the benefits, for example the “cost” of an immigrant taking a job versus the benefits the immigrant and his family will confer on society with their purchasing power. Most studies show that, on average, immigrants pay more taxes in their lifetime and contribute far more to society than they take out.
Therefore, we should make immigration easier and less costly. We should open the doors for foreign students to get green cards upon graduation with high degrees such as Master’s and Ph.Ds, and to allow foreign professionals to immigrate to the U.S and obtain work visas by substantially increasing the number of H-1B visas and employment-based green cards, or by removing limits from such categories.
It will be very difficult for U.S. policy makers to convince the U.S. public that in the current recession and loss of jobs that opening the door for numerous new immigrants might actually help. This is a challenge for an intelligent and enlightened administration. We hope that the new administration is able to rise to such a challenge.