Immigration and Economic Opportunity

By Karen Donahue, HSG member

There are very few people in the United States who do not have an opinion about immigration, particularly illegal immigration. Because the subject evokes core beliefs about fairness, economic opportunity, and the American dream, government leaders from both parties have tended to view it either as a goldmine with which to stir up voter sentiment, or as a landmine to be avoided at all costs. As a result, our current immigration system is the product of several disconnected, politically expedient, half-measures.

This piecemeal approach threatens to suppress overall U.S. economic growth and limit the ability of individual Americans to prosper. In the United States, economic growth is a function of output, productivity and innovation. All three of these factors rely upon the presence of a skilled and motivated workforce to support the formation of new businesses and the expansion of existing business capacity. The U.S. faces significant challenges in this regard because of a declining annual labor force growth rate (from 2.6 percent in the 1970s to less than 1 percent today), and a shortage of qualified personnel in key areas such as nursing, software engineering, skilled manufacturing, and agriculture.

To offset these workforce shortfalls, the United States requires and will continue to require the presence of a certain number of immigrants, whether as temporary workers or permanent residents. The Urban Institute estimates that immigrants are currently 11 percent of all U.S. residents, 14 percent of all workers, and 20 percent of low-wage workers. In the coming decades, the U.S. will need even more working age adults to augment its low birth rates and to help meet the financial needs of the retiring baby boomers.

A fact-based immigration policy must therefore become a priority of our federal lawmakers. Such a policy would include annual quota adjustments based on updated economic and employment projections. It would also clarify requirements for legal status in order to encourage responsible, hardworking people who want to participate in our economy and society to do so.

There is reason for optimism in this regard. Last spring, the Senate passed a comprehensive immigration bill with backing from both parties. Earlier this week President Bush used his state of the union address to reiterate his support for comprehensive immigration reform. It is now up to the House of Representatives to move beyond politics and develop its own bi-partisan immigration bill.

Getting Serious about Health Care Reform

Among the domestic policy issues President Bush addressed during his State of the Union address, his plan to reform the health care system has received a particularly tepid response.

The President is known for his willingness to stand his ground even in the face of great controversy and shifts in public opinion, especially when his convictions are strong. Yet his plan for expanding health care, which consists of providing tax breaks for the uninsured, expanding health savings accounts, and raising taxes on those whose coverage is deemed to be too “generous,” somehow managed to sound simultaneously too complex and lacking in ambition. The President seemed to have given up on a serious plan for health care reform before even trying.

What’s going on here is not mere partisan politics. Indeed, while Bush advances timid health care reform ideas that might only marginally advance coverage for the uninsured, fellow Republicans are leading the charge with some of the most sweeping health care reforms in recent memory. Former Governor Mitt Romney mandated universal health care coverage for Massachusetts residents, with Governor Arnold Schwarzenegger following close behind with a similarly ambitious proposal for California. Both have worked with Democratic legislatures on grand bargain solutions that will have tremendous impact on the numbers of insured individuals and families. By contrast, Bush’s plan to provide tax breaks to the uninsured would only allow about 5 percent of the currently 47 million uninsured Americans to buy health insurance, according to the Commonwealth Fund.

This year, the clamor for health care reform has grown even louder, with employers increasingly adding their voices to the call for major changes in the way our nation covers its workers and citizens. Universal health care, once dismissed as impractical and impossible, is starting to feel like a possibility thanks to efforts like Romney’s and Schwarzenegger’s.

In the past, Bush has been unafraid of big, sweeping changes. If he really cares about this issue, he will look at examples within his own party and offer Americans a big leap forward on health care, not just baby steps.

Amanda Levinson | Director of Policy Programs

Strange Bedfellows Tackle Healthcare and Retirement

Earlier this week, the Business Roundtable, AARP, and the SEIU announced a national campaign called Divided We Fail to promote bipartisan solutions to health care and retirement security. That these organizations, which are normally at odds on a number of issues, are coming together in this effort is indicative of the severity of the health care and financial security crisis facing America today.

According to the initiative’s website, on the health care reform side, the campaign will focus on increasing access to affordable health care, prioritizing wellness and prevention efforts, and supporting the choice of patients in deciding options for long-term care. On the financial security side, the three organizations will advocate for strengthening social security, providing workers with financial incentives to save for retirement, and increasing financial literacy.

By leveraging their collective memberships of over 50 million people (that’s almost 17% of the American population!), the organizations hope to pressure our political leaders to prioritize these issues and take action on them immediately. This alliance is particularly noteworthy, since the idea of universal health care and how to get there, while on the lips of many politicians and columnists these days, is still remarkably controversial.

In a departure from the position of many labor unions, the SEIU has been advocating severing the link between employment and health care (and retirement), a position based on the widespread acknowledgment that our current employer-based system hampers the ability of our businesses to compete in today’s global economy.

Hopefully, this coalition is another sign that healthcare and retirement reform will gain traction in congress this year.

Amanda Levinson | Director of Policy Programs

Marriage: the Magic Bullet?

Over half of American women are now living without spouses, according to an analysis of census data done by the New York Times. In 2005, 51 percent of American women were living without a spouse, a jump of nearly 15 percent from 1950.

While the article describes cultural shifts as the main reason for the evolution away from marriage, it does not mention the potential economic disadvantages single women may experience as a result. According to findings from Hope Street Group’s Economic Opportunity Index, marital status is an important factor in women’s economic security and success, since married women tend to have higher incomes and more wealth compared to single and divorced women, and even lead longer and healthier lives. These impacts may be even more pronounced for women who are already economically disadvantaged, especially black women, only 30 percent of whom live with spouses, according to the Times’ report.

The question is what kinds of policies will help alleviate the economic disadvantages single women face. In recent years,the Bush Administration and particularly by Wade Horn, the Assistant Secretary for Children and Families, have promoted marriage as a solution to poverty. Tax incentives and other efforts to encourage individuals to get and stay married have formed a major part of the administration’s approach to combatting poverty. Meanwhile, progressives who are skeptical of policies encouraging marriage as a solution to poverty argue that instead of fighting the cultural trend away from marriage, government should focus on policies that will strengthen the economic security of all individuals–whether married or single.

We should not ignore the important part that marriage plays not only in creating stable homes but in expanding and maintaining economic opportunity. Progressives need to look at the data and accept the fact that marriage makes a genuine contribution to economic well-being, and should be encouraged. On the other hand, we cannot expect marriage to be a magic bullet. Smart policies for economic growth will encourage people who love one another to get married and contribute to one another’s financial as well as personal well-being, but will reflect and support the obviously growing demographic of those individuals who choose not to.

How do you think our policymakers should respond to this issue?

Amanda Levinson | Director of Policy Programs