Think you understand the immigration issue? Don’t say yes until you read this

by Ryan Streeter on January 30, 2012. Follow Ryan on Twitter.

Immigration is actually on the wane, and population growth is slowing worldwide. These findings, which cut against what typically passes for settled truth in our overheated immigration debates, have some pretty serious implications for the future of our economy. So if we understand immigration according to our preferred ideology but fail to grasp the facts of the matter, we may end up doing some damage when it comes to policy.

That’s one of the conclusions you can draw from this useful and important essay by Joel Kotkin and Erika Ozuna.

Some of the points worth digesting:

We should be less concerned about too many newcomers than with the consequences of drastically reduced rates of immigration.

Why?

Global population growth has not increased but slowed considerably over the past few decades. Global population growth rates of 2 percent in the 1960s have dropped to less than half that rate, and past projections of the number of earth’s human residents in 2000 overshot the mark by more than 200 million.

This is because birth rates are dropping around the world, not just in developed countries but also in some developing nations such as Mexico or Iran. The image of a rapidly-growing population fueled by exploding birth rates in developing economies in turn leading to an unending stream of low-skilled immigrants quickly becoming a thing of the past. Even though the United States boasts birth rates ahead of the rest of the developed world, we misunderstand this competitive edge if we don’t comprehend immigration’s role in producing it:

Mexican and other immigrants are one key reason why America boasts a fertility rate 50 percent higher than Russia, Germany, or Japan, and well above that of China, Italy, Singapore, Korea, and virtually all of eastern Europe. Consequently, it is widely believed America’s workforce will continue to grow even as that of Japan, Europe, Korea, and eventually even China will start to shrink.

For this reason, we should be worried about the decline that we are seeing in immigration:

Although the foreign-born population in the United States grew by 10 million over the past decade, few have noted that immigration has entered into what could be a secular decline.

This matters to our economic future because of the role immigrants have come to play in the entrepreneurial sector, which is where most new job growth comes from. Consider this:

Between 1990 and 2005, immigrants mostly from the Chinese diaspora and from India started one of every four U.S. venture-backed public companies.

And this:

Overall, immigrants have boosted their share of new entrepreneurs from 13.4 percent in 1996 to nearly 30 percent in 2010.

The authors conclude thus:

A rational immigration policy would work against a scenario of rapid aging, stagnant population growth, labor shortages, and declining entrepreneurship, which are likely to afflict Europe and Asia. By remaining the world’s leading immigrant country, America would assure its future as the world’s beacon of liberty and prosperity.

Yes it would. Let’s hope rationality sets in soon.