The U.S. Census Bureau calculated yesterday that by 2042, the non-Hispanic white population of the U.S. would be the minority of citizens. This rather obvious demographic trend has produced hand-wringing among the anti-immigration crowd on talk radio and in the newspapers. But in a little noticed interview with the Wall Street Journal yesterday, Alan Greenspan made clear that more immigration is exactly what’s needed in this country, in the wake of the housing crisis.
Public policy can hasten this process by not prematurely propping up housing starts and by expanding the underlying demand for homes generally. The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants. Skilled immigrants tend to form new households, by far the most important source of new home demand. The number of new households in the U.S. is increasing at a rate of about 800,000 a year, of which about a third are immigrants. Perhaps 150,000 of those are loosely classified as skilled. A double or tripling of this number would markedly accelerate the absorption of unsold housing inventory for sale — and hence help stabilize prices.
An enlightened immigration policy, instead of the right wing demagoguery we have now, would solve not only the housing crisis, but also provide for the long term health of Social Security. In addition, every foreign student who gets a college degree in the United States should be offered an immediate work visa and a very clear path to citizenship. I can’t tell you how many talented international students of mine are told to leave the country one year after they graduate.