A closing thought on the advantages of increasing immigration. The radio. The Hoover Dam. Fiber-optic cable. These are among the many stirring technological achievements of the past hundred years. Yet these imaginative feats would pale next to an increase of in the economy's long-term growth rate.

Take this example from Paul Romer, an economist and growth theorist at Stanford University. He notes that if the economy's underlying trend of growth rose from 1.8% to 2.3%--that's five-tenths of a percent--the monstrous budget problems forecast for Social Security, Medicare, and Medicaid a half-century from now would disappear. Plus, there would be plenty of money left over to address other pressing social issues.

Question is, what steps can policymakers take to boost the economy's long-term prospects and living standards? How fast the economy can grow depends on more than encouraging greater investment in research & development. No, policymakers should focus on nurturing the talent that takes ideas and information and transforms them into high-tech products and marketable services. It's what economists call human capital and Silicon Valley managers, intellectual capital.

Clearly, education reform at all levels is vital for hiking the supply of skilled workers. But that takes time. But policymakers could immediately boost the immigration of scientists, engineers, software programmers, and other educated workers by the hundreds of thousands. Already, a fifth of chemical engineers and computer scientists, and a third of Silicon Valley workers, are foreign born.

High-tech companies, desperate for workers with new economy skills, are currently lobbying the government to substantially raise the number of employment-based visas, including the annual cap on work permits for foreign professionals. An open door for skilled and educated foreigners is a policy initiative that would improve the prospects for faster economic growth over the long haul.

 


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