TuckCenter for Global Business and Government

Slaughter & Rees Report - The Thrill of Victory, the Agony of Defeat

July 7, 2014 --

Early summer brings some of sport’s most exciting events. Golf offers two major tournaments within the span of about a month: the nervy U.S. Open and then the hallowed British Open. So does tennis, with the rouge French Open followed by the classic Wimbledon. North America’s NBA and NHL playoffs can extend to about the summer solstice.

The world of sport exemplifies the gains created when talent can cross borders. Members of the San Antonio Spurs, America’s newest basketball kings, hail from countries including Argentina, Australia, Brazil, Canada, France, and Italy. Seventy-eight percent of the Stanley Cup-winning Los Angeles Kings were born outside the United States. The newest U.S. Open champion is Germany’s Martin Kaymer. And at Wimbledon, for the first time since 1911 no American has advanced to the round of 16 in either the men’s or women’s draw.

In stark contrast to the thrill of these sporting victories for immigration lay the agony of defeat in Washington, D.C. last week. There, any prospects for comprehensive reform of U.S. immigration law died. Why?

It died not because of scholarly uncertainty. Yes, economists can and often do disagree about anything and everything. But the economic benefits of high-talent immigration is not one such topic. As we have written before, based on research by one of us and many others, immigrants have long been an essential part of America’s talent pool. The dynamism immigrants bring to sport is not an anomaly: throughout the U.S. economy they help drive the innovation that creates new jobs, new companies, and higher standards of living.

Nor did immigration reform die because of pervasive fears in public opinion. Indeed, recent surveys by the Pew Research Center show that in the wake of the financial crisis Americans’ belief in the economic gains of from immigration has strengthened, not weakened. In 1994, 63 percent of Americans said that immigrants “are a burden because they take jobs,” versus only 31 percent who said that immigrants “strengthen the U.S. with their hard work and talents.” In 2006, the wary view still predominated, 52 percent to 41 percent. But by 2013 the majority view had flipped, with 49 percent citing the effort and talents versus just 41 percent pointing to job pressures.

Immigration reform died because of inadequate leadership. Elected officials in Washington, D.C. could not find a way to bridge their differences to craft some sort of compromise solution. Last week’s death notices were not accompanied by quiet appeals to the economic needs of the country, or to the will of most American voters. No, they brought bitter finger-pointing throughout the nation’s capital.

In the wake of this major policy failure, what happens next to the U.S. economy? For better or worse, there won’t be an immediate crisis and there won’t be any acronym-laden bazookas from the Fed. But don’t be fooled. The costs, relative to how the U.S. economy would perform if it passed new legislation to expand skilled immigration, will still be all too real. Less innovation, slower growth, fewer new jobs—at a rate one of us estimated in The Wall Street Journal earlier this year of a lost new job every 43 seconds every single day that America is open for business.

Your two correspondents admit to penning this week’s missive somewhat in disbelief. Yes, wise minds have long been pointing to the many political pitfalls facing immigration reform. We both believed our country’s public leaders would find a way, however inelegantly, to sidestep these pitfalls given the massive economic and civic gains at hand. We were wrong. And the agony is real, most of all for the millions for whom this defeat shapes their lives in far more important ways than any sporting event ever could.

Articles © 2014 Matthew Slaughter and Matthew Rees. All rights reserved.
Publication © 2014 Trustees of Dartmouth College. All rights reserved.

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