Economists explore growth and immigration

The George W Bush Institute hosted a naturalization ceremony on July 10 during which President George W. Bush personally welcomed 20 new America citizens.
In his speech, President Bush said all forms of immigration must be grounded in both America’s laws and traditions.
“We’re a nation of immigrants, and we must uphold that tradition –which has strengthened our country in so many ways,” he said. “We’re also a nation of laws, and we must enforce our laws. America can be a lawful society and a welcoming society at the same time.
“We can uphold our traditions of assimilating immigrants and honoring our heritage as a nation built on the rule of law. But we have a problem. The laws governing the immigration system are broken. The system is broken.”
After the ceremony, the Institute hosted three panels about the benefits immigration presents to the United States. The first panel focused on how immigration, especially in Texas, fuels state economies.
“We’re in Texas, home to 4.2 million immigrants. Texas is also a state that has achieved four percent growth in recent years, and we don’t’ think that’s a coincidence. Americans often forget the contributions that immigrants make to the economy,” said Ambassador James Glassman, Founding Executing Director of the George W. Bush Institute.

With about 10 percent of America’s immigrants in Texas – about one out of every six people – immigration should have a significant impact on growth in the state. However, the panelists admitted that immigration has different connotations in Texas than in the rest of the nation
About 60 percent of immigrants in Texas (compared to less than 30 percent nationally) come from Mexico and, on the whole, have a lower level of education than most immigrants.
Although it may seem almost imperceptible, unskilled immigrants working in Texas have a grassroots effect on the economy.
“That happens in the agricultural [and] construction sectors, but in all of these cases they recognize that this is a state where workers are ready, willing and able because the state makes it possible for them to get engaged, for them to work and for them to build their own individual wealth as a family and as an employee and at the same time help that enterprise to grow,” said panelist Javier Palomarez, President and CEO, U.S. Hispanic Chamber of Commerce.
Palomarez shared an example of the impact unskilled laborers can have on an economy when Alabama displaced 40,000 illegal immigrants who were working crops and factory jobs. The state lost $10 billion in revenue and $500 million in taxes.
“If you’re not going to fill the void with some workers, a void that was previously filled by unauthorized immigrants coming in across the US-Mexico border, how is this going to play out? What are the unintended consequences of doing what they’re planning to do?” asked Pia Orrenius, Assistant VP and Senior Economist at the Federal Reserve Bank of Dallas.
A more speculative contribution involves the relationship forged between Mexico and the US as workers come north and put down roots. Specifically, panelists referred to the possibilities surrounding Texas shale deposits that extend into Mexico.
“If the shale becomes what it could be, if we didn’t have the relationship we currently have with Mexico, we wouldn’t be able to take advantage of that opportunity that exists,” Palomarez said.
Not only do immigrants fill an important current and future role in the U.S. economy, but panelist Stephen Moore, Editorial Board Member for the Wall Street Journal, said they are the type of people who have the ambition needed to push the U.S. to further innovation.
“Let’s face it, 99 percent of people in the world never move more than 100 miles from where they grew up,” Moore said. “So we’re talking about that one percent of the people who are ambitious enough and courageous enough to leave [their] homeland.
“This is one of the kind of innate advantages of having immigration: number one – they’re pre-selected for the kind of economic success, and number two – we are a melting pot, and I feel that gives America a huge competitive edge.”
Moore believes the key to successfully harnessing immigrant potential is through efficiently integrating newcomers into American society. He pointed at two predominant schools of thought. The first, practiced by California, brings immigrants into the welfare system. The second, Texas’ strategy, throws them into the workforce.
“People come to Texas, in my opinion, for jobs. People go to California for welfare,” Moore said. “We looked at some of this evidence, and what we found was that, on balance, immigrants are much more likely to go to states with low unemployment rates than they are to go to states with high welfare benefits, which is an important finding, because it says people are coming here because they want a job not because they want a welfare check.”
None of this will be accomplished without making it easier for aliens to work in the U.S., however.
“The single most effective program in the history of this country in reducing illegal immigration was the guest worker program in the early 60’s,” Moore said. “We reduced illegal immigration by 90 percent by having a plan where people could come here legally, so that’s the obvious solution.
“By the way, the immigration bill before congress does that, and that will be much more effective than building these surveillance towers and putting triple fences and things on the border.”
Palomarez is convinced successful integration requires changes in the narrative that defines the relationship between Mexico, Latin America and the U.S.
“Every time I hear about it the narrative has gotten worse, like illegal immigration and drug wars or border crossings and so forth,” he said. “Again that is true and we’re moving, not turning a deaf ear or blind eye to that, but the reality is Mexico is still the second largest trading partner to the United States and yet we never hear about that.”