Immigration is one of the most polarizing issues of the 2024 presidential election campaign—but not a new point of contention in America politics. From the late nineteenth through the early twentieth centuries, waves of immigrants, mainly from Europe, reshaped the U.S. population, sparking concerns about cultural assimilation, labor competition, and strain on social services. In response, the U.S. government implemented restrictive immigration laws in the 1920s, including national origin quotas. The landmark Immigration and Nationality Act of 1965, also known as the Hart-Cellar Act, later abolished that national origin-based quota system, creating new opportunities for immigrants from outside Western Europe to settle in the United States. By the end of the century, the result of the policy was a substantially changed American population.
Today, the cultural and economic situation has evolved again, and policymaker and scholar Jason Furman says much of the current debate misses the crucial dynamics in the aging U.S. workforce—and with it, Americans’ economic prospects.
During the latter half of the twentieth century and into the current one, amid increased globalization and labor mobility—as wars and other disasters prompted mass migrations from Sudan, Syria, and other afflicted regions—immigration surged in the United States and in Europe, leading to developed-nation debates on both sides of the Atlantic about the benefits and costs of global migration. Illegal crossings of the U.S.-Mexico border—of late, especially from failed economies or nations plagued with violence (Venezuela and several Central American countries)—have become one of the focal points of political controversy. Native-born American workers, especially during economic downturns, regularly express fears of job displacement and wage depression due to competition from immigrant labor.
In an interview with Harvard Magazine, Furman, Ph.D. ’04, Aetna professor of the practice of economic policy at Harvard Kennedy School and the department of economics, discusses the economic impact of immigration on the United States since COVID-19. Furman served as chief economic advisor to President Obama and is credited with helping to lead much of the Obama administration’s fiscal policy, including the Patient Protection and Affordable Care Act (ACA), otherwise known as ObamaCare. He was appointed as the twenty-eighth chairman of the Council of Economic Advisers in August 2013, serving until 2017. Furman is a regular contributor to the Wall Street Journal, and has authored two books on economic and healthcare policy.
Furman offers a clear perspective on immigration’s domestic economic impact: “A large fraction of the economic growth and job growth that we’re experiencing is happening because of immigration,” he states—because “job loss among Americans isn’t due to immigrants taking jobs. Rather, it’s due to aging and retirement.”
As the baby boom generation retires, he continues, the labor force is shrinking. Effectively, immigrants are filling the gaps by taking jobs and paying taxes—largely without displacing native-born workers. Even with a low fertility rate (the United States has been below the replacement rate of 2.1 children per woman for 50 years), the U.S. population continues to grow because of immigration—staving off the experience of countries like Japan, which have faced economic stagnation in face of shrinking, aging populations.
Furman emphasizes that future U.S. population growth and economic expansion hinge on immigration policy. “We need to decide whether we want to be a growing, expanding country,” he says, “or one that’s shrinking and contracting.”
Of course, legal immigration across the U.S. border, which sustains and buffers the United States population and economy, is a separate topic from the hotly-debated and polarizing issue of undocumented immigration—a complicated issue which has become largely divorced from data in most public and political debates.
Given the economic benefits of legal immigration, what are the costs of increased spending that may be associated with undocumented workers, including for public services such as healthcare and education, mostly at the state level? Are these costs offset by the value provided by undocumented workers through their labor contributions in various sectors from agriculture and construction to the service industries, unremunerated payments into to Social Security and stimulus of the economy?
Although exact figures are elusive, Furman suggests that unauthorized immigrants make a net positive contribution at the federal level. Undocumented immigrants contribute to payroll taxes, but often do not collect Social Security benefits for many years, if at all—ultimately, contributing more to the system than they receive, Furman explains. Preliminary findings from the National Academy of Sciences suggest that immigrants, including undocumented ones, he says, tend to pay more in taxes than they receive in benefits. While state and local impacts might be more mixed, the immigrants’ overall federal fiscal contribution is positive.
Because economic growth now relies on immigrants in certain important ways, Furman advocates for a comprehensive policy to address the associated issues effectively. “Here’s the tricky thing. Our economy could not function without immigrants, but it also is a terrible way for an economy and a country to function by having some sort of widespread breaking of laws,” he acknowledges. He proposes three components for future immigration policy:
1. Welcoming highly skilled immigrants: Allowing those with advanced degrees and skills to stay and contribute to the country.
2. Regularizing unauthorized immigrants: Providing a pathway for the more than 10 million unauthorized immigrants already in the United States to reduce uncertainty and enable greater economic contribution.
3. Expanding legal immigration: Broadening immigration opportunities while tightening border enforcement to address illegal immigration effectively.
“We need to change the law, but we can’t change it to say, ‘Hey, no more immigrants,’” Furman argues—instead, the United States needs to welcome more immigrants legally as a first step to tightening the borders and enforcing the laws. Focusing immediately and only on restricting undocumented immigration would, he says, “Ruin our economy” while “heartlessly and cruelly enforcing a set of laws that we had basically previously sent the message are not going to be enforced.” Balancing those pressures, he concludes, can benefit both immigrants and American citizens, simultaneously maintaining future U.S. population growth and economic vitality.
