The Economic Downturn is Accentuated by Labor Market Deficiencies of U.S. Immigration Policies: A Mandate for Change

Abstract

[Excerpt] The depth and length of the economic downturn has already led federal policymakers to implement fiscal policy remedies (i.e., government spending and tax cuts) of unprecedented proportions. These efforts have been intended to enlarge labor demand by stimulating aggregate spending in the lagging economy. Likewise, the Federal Reserve has pursued an expansionary monetary policy (i.e., increasing the money supply) that has driven interest rates to historically low levels and held them there longer than has ever before been imagined. Despite the massive scale of these policy initiatives, they have been of little avail. Throughout this troublesome period, however, the nation’s immigration policies — which have been under criticism for over 40 years for being at odds with the nation’s labor market trends — have remained untouched by policymakers. Annual immigration levels have remained at historically high levels without any seeming notice of the economic downturn affecting the economy.