With birth rates plunging and baby boomers retiring, the American economy is going to need workers. Unless someone comes up with a magical formula to boost fertility, that means we’ll need more immigrants.
So the Economic Innovation Group (EIG), a consortium of politically diverse investors, entrepreneurs, and economists, deserves credit for trying to figure out an immigration-based plan that would spare America from the coming labor crisis that could drain economic growth to under 2 percent. But the EIG’s proposed solution, which is to create a special category of visas that would repopulate Rust Belt towns and other places that have been left behind by the modern economy, is flawed.
It’s true that the Northeast and the Midwest have been hit particularly hard and that they risk falling into a cycle where, as populations shrink, employers flee, taking jobs with them. This erodes the tax base, which in turn impacts public services, causing further population loss. Rinse, wash, repeat.
To reverse this cycle, the EIG suggests granting “Heartland Visas” to skilled foreigners on the condition that they move to depressed areas targeted for renewal, such as Detroit. The authors liken this plan to Canada’s Provincial Nominee Program, in which Canada’s central government hands every province a number of visas with which to recruit immigrants of their choice, in addition to those admitted by Ottawa. In essence, it lets provinces write their own immigration policies for about a third of those allowed in.
The Canadian system isn’t a top-down effort at economic renewal or development. It allows a granular matching of workers to local economic needs. Even though immigrants could move out of their sponsoring province, about 80 percent don’t. The EIG doesn’t flesh out its proposal in detail, but it’s pretty clear Heartland Visas wouldn’t work the same way.
In Canada, provinces can recruit immigrants of any skill level, from welders to computer engineers. Heartland Visas, meanwhile, are recommended only for “skilled” foreigners, amplifying the current bias in America’s immigration system that prioritizes the demands of high-tech industries over rural economies. (The EIG is funded mostly by folks from the technology sector.) That could breed a mismatch between local needs and the immigrants who are admitted.
Moreover, disproportionate population losses are a symptom of broader governance problems. Local and state governments in these places have often failed to achieve crime-free environments with good schools and decent public services. They also erect regulatory obstacles that thwart entrepreneurship. Plunking immigrants in such places and expecting them to perform miracles when they can’t vote or run for political office will only set them up for failure and diminish public support in the long run.