An Answer To The Impending Bankruptcy Of Social Security: An Immigration Brain Gain

from the huddled-masses dept

As the baby boomers start to retire en masse, one of the fears is that the US will struggle to continue to fund Social Security. Though originally projected to become cash flow negative by 2016, it looks like Social Security will reach that mark this year, hastened by the early retirement taken by many boomers as a result of the global recession. Robert Reich, former Secretary of Labor under President Clinton, proposes a potential solution to the impending crisis: immigration. The way Reich puts it, the nation's workers all put into the system to support the retirees -- but the increasing number of retirees is outpacing the growth of the American workforce:

Forty years ago there were five workers for every retiree. Now there are three. Within a couple of decades, there will be only two workers per retiree. There's no way just two workers will be able or willing to pay enough payroll taxes to keep benefits flowing to every retiree.

So, to correct this demographic imbalance, Reich proposes that the US opens itself up for more immigration:

Get it? One logical way to deal with the crisis of funding Social Security and Medicare is to have more workers per retiree, and the simplest way to do that is to allow more immigrants into the United States.

Easier said than done, perhaps. Faced with a global recession and high unemployment levels, it will be easy to find critics who will vehemently argue that there are not enough jobs here for American workers. Reich refutes this with a simple claim that "once the American economy recovers, there will be." He may be right, but he could have done a more convincing job. Reich misses an opportunity to explain that bringing a fresh wave of skilled, smart immigrants into this country actually creates more jobs. Jobs are a not a zero-sum game -- studies have shown that an increase of H-1B visas resulted in an increase in jobs. And as we've pointed out before, there are also suggestions like the startup visa that attempts to attract immigrants who would create jobs.

Immigration policy will almost certainly need to be included as a part of any solution to the impending Social Security shortfall. Without addressing immigration at all, the options are much more limited -- focusing mainly on cutbacks or higher taxes. An option that could help grow the economy should not be left off the table.

Filed Under: immigration, robert reich, social security