Shortsighted Immigration Policy

No doubt you have read or heard all of the reports surrounding the legislation regarding immigration. It has resulted in mass demonstrations around the country. As is typically the case, our government is trying to fix what they perceive to be a problem; mass illegal immigration from Mexico.

In a nutshell, the new law would make it a felony to be in this country illegally. The bill, which passed in the House, also calls for the construction of 700 miles of fence along our southern border.

To be honest, there are issues that need to be dealt with, but passing a law is not the answer. Passing another law has never solved any problem in this country, but that is the government's answer to everything.

Besides, if we look at some demographics of our population, we just may come to the conclusion that keeping immigrants out of this country is not the long-term answer to our future problems.

We Will Not Be Able to Retire

We have talked about this subject in past postings, but always from a financial point of view. If you haven't saved enough money, you will not be able to retire. You cannot depend on any type of defined benefit pension plan, nor can you depend on Social Security.

Today however, we are looking at this from a demographic point of view. It all begins with the national birth rate and our life expectancy. Back in the early 1900's when someone in government decided that we needed some type of national old age pension, the life expectancy of the average American male was 57. Since the retirement age was 65, hardly anyone ever collected benefits. Now life expectancy is in the mid 70's for men and 80 for women.

The birth rate per 1000 people in 1913 was 29.8. It has fallen steadily and in 2002 stood at 13.9 per 1000. What does all of this mean? In the next several years as the baby boomers start retiring in mass, there will not be enough people of working age to do all of the jobs and provide all of the services that we retirees will demand. There will soon be only 1.5 workers for every retiree and it will take everything these workers produce to provide enough goods and services to meet the needs of the retirees. Forget for a moment what this means for anyone expecting to collect Social Security benefits. We are talking here about being able to shop at Wal-Mart, eat out at restaurants, and get medical care.

Now this will not happen overnight, but will play out over the coming decades. If we consider simple supply/demand relationships one of two things have to happen. Either the price for goods and services will rise (low supply, high demand = higher prices) or there will be less goods and services available for consumption.

There is one other possible solution; the U.S. begins an aggressive immigration plan. This does not mean that we need to limit immigration but rather increase it and dramatically so. Right now the U.S. is allowing about one million people to immigrate to the U.S. At the height of the boomer retirement years, we will have to increase those numbers to four million per year. That is just to fill the vacancies created by retirees.

So you see, all of this talk about limiting immigration is very shortsighted of us. Instead of looking for ways to limit the number of immigrants coming to this country, we instead need to be looking for ways to attract immigrants into the U.S. Either that or we will be working well into our 70's or beyond.