Tuesday , 27 June 2017

America's Economic Advantage is Immigrants! Here's Why

The American age demographic profile is substantially better than its major trading partners, driven by the combination of a rising working age population as the children of the post-war Baby Boomers grow up and enter the work force and substantial immigration [legal or otherwise. This profile has major economic dividends as outlined in this article.] Words: 530

So says Cam Hui (http://humblestudentofthemarkets.blogspot.ca) in edited excerpts from his original article*.

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.

Hui’s article goes on, in part, as follows:

Advantage #1: Growth in Labor Force

Advantage #2: Workers per Retiree Ratio High

Despite the angst over dependency ratios, or the ratio of workers to retirees, the expected increase in American workers means that American dependency ratios are likely to stabilize in the decades to come, whereas those of many other countries continue to decline – which will strain the pension system and national finances.

Advantage #3: Immigration Influx

America’s relative youthfulness compared to trading partners isn’t just a product of its higher birthrate, it is also a function if its willingness to accept immigration. The United States and Canada are in the minority of major industrialized countries that openly accept immigrants.

Advantage #4: Mexican Immigrants

Indeed, BBVA research (via Business Insider) titled ‘Immigrants rejuvenate the United States’ show that without the influx of Mexican immigrants, the demographic of the U.S. would be much, much older:

Advantage #5: Asian Immigrants

What’s more, America is attracting the right kinds of immigrants. A recent report indicates that Asian immigrants now exceed Hispanics. Asians are an enormous[ly] attractive demographic, largely because they tend to outperform. The latest BLS data shows (via Global Macro Monitor) that Asians are the top earning ethnic group and beat out Whites.

Advantage #6: Skilled Labor Potential

Canada’s Globe and Mail recently featured a series on immigration. Reporter Jon Friesen wrote that the shortage of skilled labour was a series of speed bumps to Canada on its way to achieving its growth potential.

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Advantage #7: Great Source of Innovation

Studies have shown that the children of immigrants tend to be sources of innovation and growth in an economy [emphasis added]:

When immigrants arrive, they not only fill gaps in the work force but pay taxes and spend money on housing, transport and consumer goods. Productive capacity increases and there is a ripple effect across the economy. Studies show that their offspring tend to be among the country’s best-educated and initiative-taking young people.

Forbes magazine reported that an astounding 40% of Fortune 500 companies were founded by immigrants or their children. The 40% figure is especially astounding when you consider that the foreign born population of the United States has been steady at 10.5% since 1850. Bloomberg highlighted a report that showed the inventiveness of immigrants:

[P]olicy makers should flag a recent study that found more than three-quarters of patents from America’s top ten patent-producing universities, including MIT, Stanford, and the University of Wisconsin-Madison, were the result of breakthroughs by immigrants. Those universities produced 1,466 patents—a fraction of the total awarded—but many were in such cutting-edge fields as information technology and molecular biology.

In other words, if you want to build a society of innovators and entrepreneurs, encourage immigration as a way to enhance, not only the growth of your work force, but the quality of your work force.

Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Other Articles:

1. http://www.munknee.com/category/investing/

2. http://www.munknee.com/category/economics/