Immigration and growth
By Scott Sumner
There are some indications that the immigration crackdown may slow economic growth:
AUSTIN, Texas (AP) — Though construction is in high demand in Texas’ booming capital city, Oscar Martinez’s drywall company is suddenly struggling.
One-third of the approximately 20 employees Martinez uses to build new homes and commercial spaces have recently fled the state, spooked by a combination of a federal immigration crackdown by the Trump administration and a tough anti-“sanctuary cities” law approved last month by Texas’ Republican-controlled Legislature.
“I took a big hit since my workers started hearing crazy stories about being deported, and they panicked,” said Martinez, who relies on immigrants in the U.S. illegally for labor and has failed to find replacements for the physically grueling, precise work.
“The Americans I hire can’t last in this job more than half a day,” Martinez said.
And it’s not just about the quantity of workers, immigration also boosts the quality of the workforce:
JOSÉ ROMMEL UMANO, who is originally from the Philippines, moved to New York last autumn. He came on a family-reunification visa and joined his wife, who had been living in America for some time. This is a typical tale: America gives more weight to close family members when considering immigration applications than some other rich countries do. More surprising is that Mr Rommel Umano arrived with a master’s degree from the University of Tokyo and 20 years of experience as an architect in Japan. Yet this, it turns out, is typical too. Nearly half of all immigrants who arrived between 2011 and 2015 were college-educated. . . .
The result is that America has switched from importing people who are, on average, less educated than the natives to people who are better schooled.
For the past several years I’ve argued that 1.2% is the new trend rate of growth in real GDP. I see no reason to change that forecast.