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Is Immigration the Answer to the Current Economic Crisis?

13 October 2008—Vol. 10/ No. 43

Writing in the Wall Street Journal’s opinion section, Lee
E. Ohanian urges the U.S. to respond to the turmoil in the financial
markets by opening the door to more immigrants. “We should
encourage the immigration of prime-age individuals,” he writes.
“Increasing immigration would increase the demand for housing
and raise home prices. And note that the benefit would be immediate.
Home prices — and the value of subprime obligations —
would rise in anticipation of a higher population base. . . . these
workers not only would purchase homes, but would generate higher
living standards for all Americans.”

Ohanian’s view of the economic benefit of new immigrants is overly
rosy. Many of the immigrants who arrive on our shores possess neither
marketable skills nor good educations. Essentially penniless, they
are not going to be homebuyers for many, many years. Rather they are
going to be looking for the kind of low-end jobs that are already in
short supply in the current economic climate, while their children,
who must be taught English, are taxing an educational system already
facing straitened budgets.

Consider what is happening in New Zealand, where the country’s
immigration office has already hastily enacted policies to allow more
immigrants into the country, ostensibly in order to help offset the
current economic decline. The new policy has, predictably, come under
heavy fire, according to an October piece in the New Zealand
Many New Zealanders correctly fear that the arrival of
a new wave of immigrants will give rise to both short-term costs and
long-term societal problems. New Zealand’s head of immigration,
Andrew Annakin, dismisses these concerns, instead arguing that the
“ongoing attacks on New Zealand’s immigration service will
restrict the country’s already ailing economy by discouraging would-be
migrants from applying.” It sounds like he’s taking matters a
bit personally, if you ask us.

Every baby comes equipped with a mind which, when educated, is capable of solving problems and learning valuable skills.

We applaud both Mr. Ohanian and Mr. Annakin for recognizing the
value of people. Clearly population growth in both the U.S. and New
Zealand would stimulate the economy, and encourage the recovery of the
housing market. In both cases, however, it seems more reasonable to
encourage greater fecundity among the existing population, rather than
recklessly increase immigration during a financial crisis.

The problem is that childbearing has long since gone out of style
with today’s intelligentsia, and even the most level-headed of
economists are often loath to discuss it. The result is a strange
double-standard, where it is acceptable to discuss immigration as a
response to the economic crisis, but not the encouragement of

So we find Rick Green of the Hartford Courant announcing
that the state “need(s) immigrants.” He goes on to add
that for Connecticut to “flourish — where we have good
schools and people who pay taxes and businesses that actually make
things — we need, above all else, more people willing to
work.” He goes on to cite Peter Goia, an economist at the
Connecticut Business and Industry Association, who argues: “We are
dead without immigrants in this state. . . .”(T)he only growth we are
going to get is from immigration. If the immigrants go negative, we
are going to have a declining population.”

But if population growth is good for the economy, why not admit
that there are two ways to go about it? The first, obviously, is
immigration. The second is an increase in the birth rate. The answer
to a society that has voluntarily chosen infertility as a way of life
is not to import people, it is to encourage fertility by giving
generous tax credits to families who chose to bear and raise

Human reproduction produces valuable economic assets. Every baby
comes equipped with a mind which, when educated, is capable of solving
problems and learning valuable skills. And from the time of its
arrival, it stimulates the economy, as parents go out and buy larger
houses and larger cars to hold their burgeoning brood.

The current economic crisis was not caused by low birth rates, to
be sure. But encouraging higher birth rates through the tax code
could help us pull out of our current economic doldrums. Those who
are going all out to try and stimulate the economy should not forget
that the ultimate stimulus package to the family economy is the
arrival of a little one.

Steven Mosher is the President of the Population Research Institute
Colin Mason is the Director of Media Production at Population Research Institute

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