OPINION: The Immigration Solution

OPINION: The Immigration Solution

Could revised immigration policy help solve Texas’ looming demographic problems?

The Biden administration has appropriately made immigration a policy priority, working with members of Congress to introduce the U.S. Citizenship Act of 2021 and fix a broken immigration system. Many potential revisions in the act would directly benefit the economy, especially here in Texas. But they only scratch the surface of larger immigration issues that threaten our state’s and our nation’s economic vitality. Even with the changes proposed by President Biden, the nation’s current immigration policy is at odds with the demographic realities of an American population that is rapidly aging while birth rates are rapidly declining.

Two Major US Demographic Challenges

Let’s begin by looking at the rapid growth of the number of older Americans. Data from the US Census Bureau shows that as Boomers have begun to retire, this 65-and-older population grew by 34.2 percent over the past decade. The number of Americans in this age group is expected to nearly double, from 56 million in 2020 to 95 million by 2060, with the 65-and-older age group’s share of the total population rising from 17 percent to 23 percent.

Local, state, and federal government budgets will bear the brunt of this demographic change. For instance, an aging population is less likely to be employed and will pay smaller amounts of a variety of taxes, including the payroll tax.  In their 2020 annual report, Social Security trustees warn that OASI (Old-Age, Survivors, and Disability Insurance) and DI (Disability Insurance) Trust Fund asset reserves will become depleted and unable to pay scheduled benefits in 2035.

Older Americans will also consume more healthcare services—even as physicians themselves retire at a rapid rate. A 2017 study by healthcare consultant Merritt Hawkins found that 43 percent of physicians in the United States were 55 years old or older, with a wave of physician retirements imminent.

An aging population is the first part of the vexing demographic equation. The second part is a declining fertility rate, which has consistently been below the replacement level of 2.1 since 2007, and hit a record low of 1.71 in 2019.

Combined, these two trends become a significant problem. On one side is a wave of retiring Baby Boomers; on the other side is a smaller number of workers entering the workforce. The question is not only how we will sustain critical programs such as Social Security and Medicare and care for an aging America, but also where we will find the workers to keep our economy growing.

The Answer to Both Challenges: Immigration

The answer, in both cases, is immigration. From high-tech jobs to healthcare and agriculture, our economy thrives on the contributions and entrepreneurial spirit of new Americans. The United States is in a global contest to attract and retain talent, and some of the previous administration’s actions on immigration have hampered our ability to compete. Our immigration policies must allow us to recruit the workers—both high-skilled and low-skilled—we need to fuel our economy.

A study by the National Foundation for American Policy found that immigrants started more than half (44 of 87) of America’s startup companies valued at $1 billion dollars or more, including Eventbrite, FanDuel, and SpaceX. Another study from the New American Economy found that H-1B visa awards from 2010 to 2013 produced more than 700,000 jobs for US-born workers by 2020.

Yes, we do need border management—sensible border security that uses taxpayer dollars wisely and respects the rights of landowners along the border. As a matter of national security, we need to know and control who enters the country. We need to be able to keep bad actors out. But we should also allow in—indeed encourage to come in—the very workers we need to fuel our economy. Without a growing workforce, increasing our GDP will become nearly impossible, even with significant gains in productivity.

President Biden and Congress have the opportunity to address the demographic peril that threatens our nation. They should seize it by modernizing our immigration laws. If we do not find a way to welcome workers and attract entrepreneurs to the United States, their talent and economic impact will go elsewhere—and our country will be the poorer for it.

Dennis E. Nixon

Dennis E. Nixon is CEO of International Bank of Commerce in Laredo, and chairman of the board of International Bancshares Corporation.

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