Recently, Robert Samuelson wrote a column for the Washington Post in which he discussed different projections for future economic growth. On the one hand, he noted that a recent White House economic report includes a projection of 3 percent economic growth per year for years to come.
On the other hand, most economists project slower growth. In part, this is due to the slow growth projected for the U.S. labor force. As Samuelson illustrates, the Congressional Budget Office is projecting labor force growth of 0.5 percent annually over the next 10 years. Productivity growth is projected to be 1.3 percent annually. Adding these together gets economic growth to 1.8 percent per year—more than one percent short of the White House’s rosy projections.
What Samuelson does not talk about in his column is immigration.
Continue reading “The Missing One Percent”
The California Immigrant Policy Center recently released its annual report on the economic contributions of immigrants to California’s economy. The contributions are huge–$715 billion, or one-third of the state’s total output. And the state’s total GDP makes it the sixth largest economy in the world. Undocumented immigrants alone contribute an amount equal to the entire output of the economy of Oklahoma.
The continued ability for immigrants in California to play such a crucial role in the economy is being undermined, however, by rising inequality and housing prices that are increasingly unaffordable for immigrants at the low end of the pay spectrum.
The study takes three examples of neighborhoods in Los Angeles and San Francisco that traditionally housed an immigrant population and shows that, with housing costs rising in these neighborhoods, the immigrant population has been declining.
Read more of my summary of the California Immigrant Policy Center’s study over on Immigration Impact.
Photo credit: Luke Price under Creative Commons License 2.0.
Deferred Action for Childhood Arrivals (DACA), an initiative of the Obama administration that has proven to be an enormous success with the 740,000 beneficiaries of the program, has yielded gains not just for the individual beneficiaries, but also for the communities in which they live, their employers, and government at all levels.
Ending the program, as the president-elect has vowed to do, comes with an economic downside. If DACA recipients lose their work authorization and no longer can work, they will lose their earnings, the economy will suffer and the government will lose tax payments. Two recent studies have estimated what the end of the DACA program would cost the U.S. economy, the Medicare and Social Security systems, and employers who will incur costs if they are forced to replace their workers.
Once in office, the new Administration will have to ask itself whether it really makes sense to have employers, communities, and governments incur such costs to reverse an initiative that has not only been a tremendous success for its recipients, but also popular with the general public. One can only hope that, after the transition has taken place, the business sense that Mr. Trump is reputed to have will translate to common sense with regards to the DACA initiative.
Read more on my post on Immigration Impact.
Photo credit: 401(K) 2012.