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Tech group says US may lose to China without new migrants

Jordan Fabian, Bloomberg News on

Published in Business News

The U.S. risks losing its status as the world’s largest economy to China by the end of the decade if it doesn’t increase legal immigration, according to a study released Wednesday by a tech group that favors admitting more foreign workers.

The report projects that the American economy will be three-quarters the size of China’s by 2050 under current U.S. population trends and immigration levels. FWD.us, an immigration advocacy group founded by tech industry leaders, conducted the study in conjunction with George Mason University.

President Joe Biden is pushing to overhaul the nation’s immigration laws to make them more “humane.” A proposal he sent to Congress would increase the number of people allowed to gain legal permanent residence each year by almost 375,000, according to a separate study by the immigration services group Boundless Immigration Inc.

Republicans have rejected Biden’s approach and have blamed a recent spike in irregular migration at the U.S. southwest border on the president’s rhetoric and policies.

The situation at the border has also emboldened those who support cutting immigration levels. They argue that allowing more migrants could displace American-born workers as the U.S. economy recovers from the pandemic.

“Immigration has basically become the fulcrum of nativist and nationalist politics, which is really about a concern for putting America first,” said Justin Gest, the study’s co-author and associate professor at George Mason University. “If you look at the numbers here, the best way that we can put America first is by welcoming newcomers.”

The report argues that without more immigrants, the U.S. population will become older in the coming years as the number of elderly rises at a faster rate than working-age adults. The expense of entitlements for those older Americans, such as Social Security and Medicare, risks outpacing taxes paid by younger workers, the report argues.

 

The report says that while higher levels of immigration alone would not ensure solvency for the Social Security trust fund, it would help delay its depletion, now anticipated in 2034, by a year or more depending on how many more visas are issued annually.

If legal immigration levels were doubled, an estimated 31 seniors would live in the U.S. in 2050 for every 100 working-age people compared to 37 under current immigration levels, the study shows. Under that scenario, U.S. gross domestic product is projected to rise to $46.8 trillion in 2050 compared to $49.9 trillion for China. China’s economy wouldn’t overtake the U.S. until closer to 2035.

Biden’s plan isn’t that expansive. It would raise the annual number of green cards the U.S. issues by about 35%.

The report says that increasing immigration while keeping the current mix of visas, which are mostly family-based, would result in a larger GDP increase than if the U.S. allowed in most immigrants through work visas. That’s because immigrants who come to reunite with spouses or relatives are more likely to put down roots in the U.S. than those who come for work.

Groups that favor lower levels of immigration argue that granting a pathway to citizenship to immigrants already here illegally, as Biden’s plan does, would strain programs like Social Security and Medicare by making those immigrants eligible for benefits.

©2021 Bloomberg L.P. Distributed by Tribune Content Agency, LLC