Converging on immigration

“The biggest threat to American soft power is the backlash against immigration,” writes the Economist’s Robert Guest in “Borderless Economics”, a highly readable paean to the power of diaspora networks. If so, it’s a threat that looks to be receding.

Immigration is now one of the few issues on which Democrats and Republicans seem able to have a fruitful conversation.  Last week saw  eight senators, four from each party, announce an agreed set of principles for fixing a system all agree is broken. A day later, President Obama  re-unveiled his own set of ideas on the subject, first launched in May 2011. On the whole they converged.

Why now? A lot of it has to do with Republican presidential nominee Mitt Romney winning only 27 per cent of the Hispanic vote after suggesting he would require illegal aliens to “self-deport” or else.  Add to that projections the Hispanic share of the vote will be 2 per cent bigger in 2016 than it was in 2012.

Expect to hear less of the phrase “illegal alien”.  The preferred term is now “undocumented immigrant”, of which there are estimated to be 11 million, mostly from south of the Rio Grande.

Politicians from opposite ends of the respectable spectrum are at one on the proposition that rather than trying to find and send these people home, it would make more sense to document them, levy the taxes they would have paid had they been documented, assess some sort of fine for their having broken the law, and set them on the path to citizenship.

There is also consensus that for such an approach to fly politically, the federal government will have do a better job of stemming  the inflow of visa-less migrants and ensuring the visa-ed go home when their visas run out.  The Senate gang of eight proposes some sort commission to determine when the borders have been sufficiently sealed to trigger the amnesty programme.

The president accepts  the need to make the southern border less leaky but says that much of the work has already been done. The US Border Patrol has been beefed up. Drones and other technology are making it harder to get across undetected.  The number of people succeeding or even trying is way down.

Fear isn’t the only factor driving Republicans to the table. In fact, there’s a good case to be made that most of the undocumented who stand to gain citizenship will vote for Democrats when they do. Happily, there’s another incentive for reform.  Economics.

The biggest long term challenge the US faces is the graying of its population.  Today, there are five Americans working for every pensioner. On present trends, the ratio will be three to one by 2050. The obvious solution is to import more working age people.

But won’t these people themselves be a drain on the fiscus?  Not according to the Congressional Budget Office the last time it ran the numbers on a Senate bill similar to what’s now being weighed.  Keep the administrative costs of reform below $25 billion and it costs nothing. The CBO figured the new immigrants would consume $23 billion worth of federal income support and health benefits, but would at the same time generate $48 million in new tax revenue.

These calculations don’t fully account for the propensity of immigrants to create wealth. They start more businesses than native-born Americans. They earn more patents. They represent half of the PhD’s working here in science and technology.  Overall, the evidence is compelling that they  not only enlarge the national pie, they keep America at the forefront of innovation.

A study by the National Venture Capital Association, quoted by the White House, reported that between 1990 and 2005 fully a quarter of the fastest growing publicly traded companies in the US, including Intel, Google, Yahoo, Paypal and eBay, were founded by immigrants, creating 220 000 jobs.

South Africans, as it happens, are poster children for this narrative. Elon Musk, having co-founded Paypal, is revolutionising the US space industry as  America’s new Wernher von Braun.

Solar panels are an increasingly common sight on residential roofs throughout much of the US in no small part thanks to Peter and Lyndon Rive, Musk’s cousins,  who have put green energy within reach of ordinary wallets. Their company, Solar City, was listed on the NASDAQ exchange in December.

Port Elizabeth-born and Wits-trained surgeon Patrick Soon-Shiong, reputedly Los Angeles’ wealthiest resident, is responsible for over 50 US patents and has so far launched and sold two multi-billion dollar pharmaceutical companies. He has founded what he called a “do-tank” focused on fixing the US health care system.

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