Please Allow Immigrants to Keep My Taxes Low
In wake of the April 15 bombings in Boston, the eight Senate members tasked with addressing current immigration woes have decided to postpone moving forward. Members of the working group, four Republicans and four Democrats, are not able to discuss the provisions of the bill publicly until it is finalized, according to an article published in the Wall Street Journal. As both brothers accused of setting off the bombs had legally immigrated to the United States, Senator Charles Grassley (R-Iowa), believes the recent bombings pose the question, “How can we beef up security check on people who wish to enter the United States?”
Let’s be honest with ourselves. We all know the concern is not about security checks, pre-Boston bombings or post-Boston bombings. According to the United States Department of Homeland Security, in 2012, 757,434 people were naturalized. Therefore, the two men accused of the Boston Marathon bombings represent 0.00026% of naturalized citizens just including the year 2012 alone. Moreover, in the past 20 years of my life, 17 individual bombings by U.S.-born citizens have taken place, each killing multiple people.
Security concern or not, there are 11 million illegal immigrants, more than 3.5% of the total population of the United States, waiting for a change to happen. The recent Senate bill released, as the Wall Street Journal reported, included “an eventual pathway to citizenship, but only after a series of ‘triggers’ are met to enhance border security.” Border security enhancement or not, 11 million people already made it. The existence of more security along the Mexican/U.S. border is simply not going to change anything. The “problem” itself, historically speaking, is a new social construct. No problem actually exists. Never before has the movement of people across countries been so low. Never before, in the history of other civilizations, has a government attempted with such brute force to restrict the imminent, natural flow of people to such a devastatingly low degree. Even the Great Wall of China didn’t span the entire length of the empire, as plans for changes in the Mexican/U.S. border propose.
In fact, rather, what exists is an opportunity—an opportunity to ensure the United States remains the largest economy in the United States. Projected to surpass us soon is China, a country with a population of 1.344 billion. With the current United States population at 313 million, China is more than one billion people ahead of the United States.
Absurdity. That is the only word that comes to my mind when I read these current population statistics. There is simply no imaginable way to compete with a work force more than four times greater than ours. A group of 429 people is unquestionable going to be more productive than a group of 100, regardless of improvements in technology. Looking at the bigger picture, three things matter in an economy: land, labor, and capital. Despite increases in communication assisted by globalization, we are not living in a time of the greatest flows of land, labor, and capital. That already passed in 1973 with the end of the Bretton Woods system. Far past the search for ghost acres and the need of exploiting land merely for food sustenance, land changes won’t contribute to the prosperity of the United States anytime soon. Therefore, looking ahead to keep our dominance from an economic perspective, we are only able to look to our capital levels and our labor levels. According to economist Barry Eichengreen’s recently published book, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System, one-fifth of all tax dollars are currently committed to interest payments alone to satisfy the debt of the United States. Given our debt situation, the United States can’t hope to maintain dominance using levels of available capital.
A visit to the Athenaeum by acclaimed French economist and philosopher Dr. Guy Sorman, however, convinced me, from the standpoint of a history major, not to entirely lose hope. As Dr. Sorman exclaimed, “You can see the future as a threat or an opportunity.”
An opportunity is exactly what my grandfather saw when he came to complete his medical residency in the United States from Cuba in 1954. However, the opportunity was not only to complete his residency. Despite many pleas to contribute his knowledge to Cuba as the number one student in his graduating medical school class, he preferred the opportunities offered to him in the United States. Similar to the United States’ current economic standing, it is crucial Americans view each immigrant as an opportunity, and a last hope, for continued prosperity rather than an apocalyptic disaster waiting to happen. Each immigrant is an opportunity to improve our labor productivity and, more importantly, an opportunity to once again reach a viable level of competition in the world labor market.
The restrictions on immigration, from a historical standpoint, have never been as high as they are today. Clever politicians stating there are more immigrants living in the United States than at any other time are correct; with the monumental increase in population that has occurred over the past century, the physical number of immigrant is higher than ever. As a percentage of total population, however, it is at a low point.
Why is immigration from a historical standpoint so crucial to our economic prosperity? Population is a key determinant of economic size. Plain and simple. Eichengreen writes in his book, “A stagnant population will mean a stagnant economy.” While the U.S. is still the largest economy in the world due to its incumbent position, with the possibility of a stagnant population, we will without a doubt fall form this position. There is no feasible way that China, with an additional billion people, will not out-produce our economy. From a competitive standpoint, we are poised to lose. Additionally, to put this vast gap into perspective, the difference in population between the United States and Russia at the end of the Cold War, seen to be impossible to compensate for, was a mere 40 million people. To reach the population level of Russia, the United States would have only needed to increase its population by 16 percent.
Will we feel this fall from incumbency? Let’s take Japan as a case study, as Dr. Sorman pointed out. Currently, Japan is facing zero economic growth. Moreover, the population is decreasing, failing to even remain stagnant. Does the rule hold that population determines economic size? From the point of view of an average Japanese constituent, it apparently does not. With a decrease in population, income for each individual has actually increased. While Japan is receding on the global market, the common constituent feels no sense of crisis. Yet.
The common American citizen, the generation of current policymakers, specifically, may not feel our fall from hegemony. My generation will.
Most importantly, my generation will feel the increase in taxes. Even for those who argue that a fall from hegemony may not be that bad, it will undoubtedly mean an increase in taxes. According to Dr. Sorman, it is possible to attribute a country’s propensity to redistribute income to the uniformity of its population. Countries with greater homogeneity redistribute income at much higher rates than those with heterogeneity in their population.
In the long run, without immigration reform, the United States will see no economic growth, if not a decrease in economic growth, a fall from a position of hegemony, and an increase in taxes as the population increases in homogeneity. Our only hope for a continued rise in economic growth, fostered by a change in labor, is a substantial growth in population. An increase in immigration, and the subsequent increase in population, is our last hope to even have a shot at remaining as a dominant economic and global power.