Is Immigration A Good Thing?

"America was indebted to immigration for her settlement and prosperity. That part of America which had encouraged them most had advanced most rapidly in population, agriculture and the arts." - James Madison

In order to spark some debate in the United States there are a few hot buttons.  One is abortion, another is student loans, another is the state of the economy and still another is immigration.  I recently read a very interesting article that sides with allowing more immigration into the world's rich countries.  This is contrary to most schools of thought and certainly against the wishes of congress, so I thought I would provide the other side of the argument to tweak your interest as there is definitely some merit to allowing more immigration.

Some of the most successful modern economies of the world are a direct result of immigration.  Immigrants either settled or were exported to Australia and America just to mention a few obvious ones.  Currently however both of these countries are avid supporters of stiffer immigration requirements in order to protect the jobs of the local worker.  This argument goes that by keeping immigrants out, there is more work for the local residents.  The merit of this argument is questionable as a lot of the work that immigrants perform locals would not do such as janitorial or construction labor work.  Recently there was a Business Week article posted how Americans will not do the dirty work and rely on immigrants to perform these tasks.  That aside immigrants have far greater benefit to rich economies than performing just the grunt work.  Looking back in history the evidence is clear by looking at the success of those countries which grew into modern successful economies on the back of those original immigrants.  So keeping the immigrants out it is very short sighted.

Furthermore when immigrants migrate to a new country they create Diasporas or groups of people that share a common bond on their original country.  The Huguenots, Scotts, Jews and British are great examples.  These groups provide a good economic base from which to gain a foothold in the new country.  Once established they then provide a wonderful link back to the original country as not only do they understand the local customs and language, but they can find gaps in the market that can be filled with exports from their new home.  This business expansion provides jobs to locals and helps the economy grow.  It has been shown that immigrants are very successful at opening new markets for their new country.

A study shows that more than 3% of the world's total population are immigrants.  If this were a nation it would be larger than Brazil in terms of population.  With this large a mass of people international trade becomes far easier.  Knowledge of local cultures is of critical importance in international trade. Just ask anyone who has tried to break into China or Japan.  I remember a relative of mine tried to expand from South Africa to Australia expecting that the cultures were similar.  How wrong he was and while the business remained successful and thrived in South Africa it fell flat in Australia.  Had he had an Australian immigrant to show him the ropes things may have turned out differently.

Rich economies are constantly training foreigners in their ways.  Not only do we spend a fortune educating them we also spend a fortune teaching them our ways of trade and finance.  The amazing part of the equation is that once we have trained and educated them we often send them home.  A large swath of innovative ideas are thought of by this group of people and these ideas are repatriated to their countries.  Keeping them in the country that educated them would help stimulate growth.  Think about this, a person that has the capacity and drive to leave their home country and explore the world is far more likely to think outside the box than a local who has never left their county.  Rich nations need this edge to remain competitive.

Obviously opening borders to let anyone enter is absurd particularly if you are a rich nation bordered by poor ones.  The flood of people would overwhelm the system and bring with it a lot of the dregs of society that no country wishes to house.   That said closing the borders and keeping everyone out is a loosing battle that is very short sighted when you consider the benefits of recruiting highly skilled entrepreneurial people from other countries.  China is rapidly overtaking the United States in innovation.  To me this is a direct result of education being provided in the United States being exported back to China rather than trying to employ these engineers to innovate in the United States and maintaining the benefit long past the school tuition costs.  Think of it in terms of sport.  Recruiters spend countless hours scouring the world for the next big talent, why not do the same in business?  Well it is done in business however many times companies find the talent and then are unable to bring that talent in house as the laws prevent them from doing so.

This is a very politically charged situation.  Opening the doors to immigrants while unemployment is high is political suicide, however exporting talent that we created back to their countries is short sighted and gives our competitor nations an edge.  Immigration will always be a problem area, but we should consider letting more of the A-team in.