Publications

- January 1, 2021: Vol. 8, Number 1

One billion Americans: Expanding the U.S. economy through strategic population growth

by Mike Consol

Think about what makes the United States truly powerful. One could argue it’s the millions of people the world over who want to emigrate here. That is among the most powerful elements of so-called soft power that makes the United States influential beyond all other nations, and what has attracted the world’s brightest and most ambitious minds to our country, people who played huge roles in building American industry, not the least of which is the formation and innovations of Silicon Valley. Witness the recent study by the National Foundation for American Policy that found 55 percent, or 50 of 91, of the country’s $1 billion startup companies, had at least one immigrant founder. Another study concluded one-quarter of new businesses are founded by immigrants.

Our universities educate people from around the planet and the leaders of many countries have been educated at U.S. institutions of higher learning, including 20 percent of African leaders, a continent many economists and investment professionals consider ripe for investment, with its young population and rich array of natural resources.

Sadly, there are millions of Americans who fear a future where immigrants continue streaming to the United States to start a new life. Even enemy states, such as Iran and Russia, are loaded with educated and professionally skilled citizens who would make a mad dash to become Americans, if not for impediments in their countries and ours. The Trump administration, which touted its commitment to stopping illegal immigration, also cut legal immigration, sending the you’re not welcome here signal to the rest of the world.

Size does not necessarily equate to power, just take a look at the tiny nation of Israel, which has turned itself into an economic power, or India, which is the world’s second-biggest in terms of population with 1.3 billion people, struggling to grow its economy and exert influence on par with its rival China. Then look to aging and shrinking European countries, such as Italy and Japan, and the economic struggles that demographic challenge has caused. The only thing keeping the United States from a similar fate has been immigration of many young, mostly Asian and Hispanic, newcomers.

On this very subject, along comes economics journalist Matthew Yglesias, a co-founder of the news site Vox, and author of One Billion Americans, a book in which he argues we should roughly triple the United States' 330 million-person population for two major reasons: one, the global economic competition among nations favors big and rich countries, and two, the United States has historically benefited mightily from having a large population relative to a lot of its competitors.

There are many people who consider Yglesias’ idea preposterous and out-of-step with efforts to reduce global population growth and take pressure off the environment.

Consider a few of his arguments, however. His idea doesn’t need to be taken literally to mean we shoot for 1 billion people, but perhaps think in terms of a growth rate robust enough to significantly boost U.S. market size and economic activity. Secondly, even if we think in terms of growing our citizenry to a full billion people, it wouldn’t be an instant or short-term effort. Reflect on Canada and its population growth rate of 1.4 percent, which, if the United States equaled, would put us on pace to build our citizenship to 1 billion in 80 years, the year 2100. Meanwhile, China’s population is aging and shrinking, and at the current rate would see its 1.4 billion population reduce to about 1 billion during that same time period. Finally, Yglesias argues the world is not necessarily overpopulated. The real problem “we suffer from is a deficit of technologies in certain key areas,” he says. One example is the great progress being made toward zero-carbon electricity production. Besides, he reasons, the problems we face will not be solved by shrinking the world’s population.

Clearly, the United States has vast expanses of uninhabited land, and U.S. population growth would not have to mean global growth. Our nation could relatively easily grow to 1 billion citizens by simply relocating people from countries around the world to our soil, without overall global population necessarily increasing at all. The United States would simply be taking advantage of its status as the nation of choice among millions of people currently living in less desirable or exciting territories.

Yglesias point to a proposal from the U.S. conference of mayors that would create a new visa program allowing cities with declining populations — cities such as Cleveland and Akron in Ohio; Grand Rapids, Mich.; and Rochester, N.Y. — to sponsor visas for people from overseas to emigrate to their cities and fill economic roles that boost local economies. For example, a city might sponsor a slate of immigrants from India to handle medical records, rather than outsourcing those jobs and salaries to Bangalore.

“Maybe we can let those companies build offices in our post-industrial cities, bring the workers over there, then the workers become local taxpayers, so these cities can afford to maintain their fire and police and educational services,” Yglesias says. The new citizens would “become customers for the local businesses, so people can run their barber shops, restaurants, construction companies and maintain their real estate values.”

There are cities and towns across the United States that are hurting because of population loss, and they could be buttressed by targeted immigration programs. Nationally, a growing population increases U.S. market power, expanding domestic revenue opportunities for homegrown corporations and small businesses, as well as attracting more investment dollars from around the world. Witness the market power exercised by China, whose huge population and rate of GDP growth has companies and nations around the world pining for access to Chinese consumers. China has used that power to bend companies to its will, including forcing them to share their patented technologies with Chinese companies, many of them state-run or state-controlled.

This timing of Yglesias’ proposal isn’t particularly good for a couple of reasons. There are far too many Americans with a zero-sum attitude toward employment. They believe the path to lower unemployment is curtailing immigration rather than intensifying it — in effect, shrinking rather than enlarging the pie. Secondly, neither the executive nor legislative branches of the U.S. government have been willing to propose any bold new ideas for a very long time. Instead, they keep going round and round about tax policy, military spending, law enforcement and other run-of-the-mill issues that tinker around the edges of governance rather than representing something truly new and capable of having a significant impact on our society and domestic economy going forward.

Yglesias says, “That so many people from all around the world want to move here, that doesn’t mean we need to say ‘yes’ to just anyone who happens to show up, but we also shouldn’t be slamming the door shut.”

Obviously, U.S. citizens are not going to be talked into increasing their birth rates, but the United States has a tremendous power of attraction for people in all corners of the world — educated and professionally accomplished people who can bring their skills to our shores, fill jobs, start companies, create new employment, become consumers who stimulate commerce, and make other economic and civic contributions. No other country has that power in equal measure to the United States, and yet we have not exercised that power despite immigration and national population growth being the very mechanism that took our nation from a renegade splinter group from the British Empire to the nation that supplanted Britain and thrust the United States into its current position as the world’s economic, military and political leader.

There is no greater power a nation can possess than to be held in high esteem by people in foreign lands, and to have those people ready and willing to become Americans and make a new life for themselves in the land of the free. Alas, Americans have become loath to exercise that power, and that has weakened our country in ways most people do not even comprehend.

 

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.

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