America’s Biggest Economic Challenge May Be Demographic Decline

on Apr4
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It raises the possibility that, if unchecked, these demographic trends might not merely reduce overall national growth rates in the decades ahead. They could also cause the left-behind cities to hit a point of no return that undermines the long-term economic potential of huge swaths of the United States.

The authors of the E.I.G. report suggest a potential solution: an immigration policy that would stop the vicious cycle. They propose that visas could be made available to skilled immigrants on the condition they go to one of the areas struggling with demographic decline. The idea would be to create growth in the working-age population in those places, increasing the tax base and the demand for housing, and giving businesses reason to invest.

“The real power of this is that it would start to change how investors, businesses and entrepreneurs view locational decisions,” said Mr. Lettieri, the president of the group. “They would know that there is this new pipeline for talent.”

Given hostility to immigration in large segments of the country, he said, places should be able to elect whether to make visas available to immigrants as part of an economic development strategy. It would have to be a “dual opt-in” approach in which both the community decides it wants more immigration, and individual immigrants elect to move there.

Dayton is the kind of place where that approach may just have some appeal. Ms. Whaley, the mayor, said a program called “Welcome Dayton,” intended to help immigrants move to the city, has been helpful in holding the population steady after a long pattern of losses.

Programs like that, she said, combined with a low cost of living and investment in community colleges to create qualified workers, can give smaller cities like Dayton the means to break out of demographic ruts.

Regardless of what one thinks about using immigration policy to try to arrest demographic decline, there’s a more basic point that everyone who cares about the United States’ economic future must wrestle with.

Demography may be the most powerful economic force of them all, and for much of the United States, the trend lines, for now, are pointing in the wrong direction.

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