Second Act

Obama could really help the US economy by pushing for more legal immigration

November 7, 2012
Obsession
US Election
November 7, 2012

It’s time for US President Barack Obama to think big. Syria’s civil war and Iran’s nuclear capability will continue to give the president plenty of opportunities to make his mark on history in foreign affairs. But the hope of any further major achievement in domestic policy will have to overcome two hard realities: Republican control of the House of Representatives and aging Americans’ effect on the federal budget.

What the president needs is some form of political jujitsu that also solves the country’s long-term budget problems. Meanwhile, one of the biggest messages for Republicans from this election is that their electoral prospects hinge on bringing a larger fraction of Hispanics into the GOP fold. So immigration is an issue that puts them in a box: either they play ball, or they get tarred further as the anti-immigration party, which is politically deadly.

Now is the perfect time for the president to tackle immigration reform. He already has put immigration reform on the agenda, but there is a danger that he will think too small and miss the potential of the right kind of immigration reform to strengthen the economy and shore up the long-run government budget. But the key to the economic and budgetary magic of immigration reform is to dramatically increase the level of legal immigration allowed each year.

Let me be concrete by suggesting an increase of 1 million legal immigrants per year for the next 30 years. If the immigration reform is designed specifically to help the economy, here is what it can do.

First, it can work wonders for the long-run solvency of Social Security and Medicare by increasing the number of young people paying relative to older people receiving benefits.

Second, it can bring in large numbers of highly educated and highly skilled immigrants who can keep the United States at the cutting edge of technical progress.

Third, it keeps America a melting pot while giving it a competitive advantage in the global economy.

Fourth, in general, a group’s wages are raised by increasing the number of workers who are different from that group.

Thus, bringing in immigrants at the bottom and the top of the skill distribution will help the wages of those in the middle of the skill distribution—the middle class that the president promised to help. Additional immigration may cause a problem for native-born Americans who don’t complete high school, but the kind of education reform that will help solve that problem is already one of the president’s strong suits and something strongly supported by Republicans. Finally, since real-estate markets are forward-looking, a commitment to a large increase in legal immigration over the next 30 years would help the economy even in the short run by raising property values, so that fewer homeowners would be underwater, meaning they owe more than their homes are worth.

Done right, and done in a big way, the economic benefits of increased legal immigration are compelling. In the blogosphere, Adam Ozimek and Noah Smith have been some of the most forceful advocates. And on my own blog, I have stressed the moral case for increased legal immigration. (See my post “You Didn’t Build That: America Edition” and its follow-up.) And politically, increased legal immigration designed with the economics in mind is a wedge issue that separates the pro-business part of the Republican coalition from the culturally conservative part of that coalition.

An increase in legal immigration doesn’t solve the problem of illegal immigrants already in this country, but it will ultimately make that issue so much easier to deal with that the issue of illegal immigrants could be safely deferred, if political necessity demands (as it might, given the strong positions to which many Republicans have committed themselves against illegal immigration).

For the sake of our nation, second-term presidents—who no longer face a reelection battle—should be thinking about their place in history. Most Americans today have a positive view of the legal immigration we have had in the past since it’s how most of us got here. On the domestic front, the president has very little room to maneuver. Changing our 21st century approach to immigration is one arena where a bold move can put President Obama forever in the top tier of American presidents who have laid the foundation of American greatness.

Follow Miles on Twitter at @mileskimball. His blog is supplysideliberal.com. We welcome your comments at ideas@qz.com.

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