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Fertile Imagination

Jeb Bush says Hispanics have more babies, helping us meet funding shortfalls. He's only half right.

Getty/Kevork Djansezian

Worried about the slow-growing U.S. economy, and the even more slowly declining unemployment rate? Jeb Bush has a remedy: more immigrants. Especially the fast-breeding kind. “Immigrants create an engine of economic prosperity,” the former Florida governor told a group of evangelical Christian activists at last week’s annual Faith and Freedom Coalition conference, because they “are more fertile, and they love families.” He predicted their multiple offspring will, in turn, boost the payroll-tax revenue needed to cover the predicted shortfall in funding for Social Security and Medicare, thereby avoiding the need for uglier alternatives such as cutting benefits or raising broader-based taxes.

Bush may well have other reasons to support large-scale immigration from south of the border, such as improving the meager support for the GOP among Hispanics, who constitute the bulk of recent immigrants. But he may want to reconsider his prognostication about both the demographic and the economic consequences of immigration reform.

He's correct on the fertility front: Birth rates among Hispanics remain considerably higher than those of non-Hispanic whites and blacks (and far higher than those of Asian immigrants). But he may be disappointed by a new report from the Centers for Disease Control and Prevention, which found that the birth rate among Hispanic teenagers has dropped sharply in recent years, averaging a 34 percent decline from 2007 through 2011. While the rate remains higher than for non-Hispanic black and white teens, who were also less procreative over the period, the decline was sharpest among Hispanics.

Much of this decline, as the report notes, is due to increased contraception use among teenagers—a practice that many of Bush’s fellow Republicans oppose. But even if this birth rate trend reverses, there are other side effects to his immigration prescription.

Some economists are becoming a bit more optimistic about the economic outlook, and the stock market has certainly been ebullient. But as New Yorker economic columnist James Surowiecki recently observed, the market is happy primarily because, despite stagnant incomes and sluggish economic growth, corporate profits are well above their historical average. Part of the reason for that disparity is the decline in corporate taxes, but globalization is another important factor: The stock averages are being dominated by large numbers of American multinationals, which, a recent study found, now garner nearly half of their earnings abroad. That suggests that the U.S. economy may not be able to absorb many more local workers, at least not those lacking scarce skills.

True, there have been reports of corporate “repatriation.” General Electric, for example, has recently moved part of its off-shored appliance manufacturing operation back to Kentucky, as the Atlantic noted in a December article on the “insourcing” phenomenon. Nor is GE alone—witness the small, but notable uptick in U.S. manufacturing jobs this past decade. But the new crop of U.S. manufacturers will not be produced by the assembly lines of old. Robots and other sophisticated production techniques will greatly reduce the need for routine human labor. In time, as is now happening in China, corporations will recognize that substantial numbers of reasonably well-paid domestic consumers are essential to absorb the products of their machines’ heightened productivity. Still, efforts to adjust to the new realities of the labor market can cause huge social and economic disruptions. Witness the plight of 250 million rural Chinese currently being displaced in that country’s efforts to build new urban centers, the growing public discontent with soaring air pollution, and the dismal job prospects now facing many of the 7 million new graduates from China’s colleges and universities.

Moreover, should the need for more manual labor arise, there is certainly no shortage. More than 7.1 billion people now populate the globe. Within a dozen or so years, even with fertility rates declining in most countries, that number will likely reach 8 billion. By mid-century, assuming no climactic upheaval, it should be 9.4 billion, nearly 7 billion more than in 1950. Many of the countries where these masses reside already have large numbers of job seekers. In its World Factbook, the CIA estimates that in India the number of jobless exceeds 120 million and that doesn’t count the larger number employed only part-time or at misery-producing wages. In less-developed parts of the world unemployment rates can reach into the stratosphere: In Zimbabwe, 95 percent of the potential workforce is counted as unemployed. And while many, if not most of these potential workers are still less job-ready than potential Hispanic immigrants, large numbers of them, especially in Asia, are already better prepared than many American workers.

The problems associated with a large population of unemployed and underemployed teens and adults have been well-documented. Males, in particular, are a challenge. In the Middle Ages, they were dispatched on “crusades” to rape and pillage other people’s property. Even in recent times, our unemployment rate has been moderated by our maintenance of a large standing army. But warfare is also rapidly becoming mechanized. Who needs expensive ego-driven pilots when drones can do the job nearly as well or even better? Who even needs ground forces when uncomplaining robots and self-mechanized tanks can conquer the battlefield? Think not only of the savings in training, pay, medical and burial costs, but the future savings in retirement benefits as well!

Of course, as Bush acknowledges, a major reason that he—and a large number of conservative scholars at the American Enterprise Institute and elsewhere—favor a rapidly expanding U.S. population is that they worry about having enough low- and moderate-income workers to foot the bill for the Social Security and Medicare benefits that, under current law, will be owed to today’s workers when they reach retirement. Never mind that, as they labor, these workers are piling up retirement and medical liabilities to be shouldered by the future generations—their many offspring.

To pay those payroll taxes, though, the bulk of that enlarged population needs to have decent-paying jobs. But there are other ways to finance these benefits than a highly regressive payroll tax—like a value-added tax (VAT), which most other industrialized countries employ to finance their typically more generous social-welfare benefits. A VAT is, of course, less progressive than an income or profits tax, but it has the enormous virtue of being imposed upon imports (and rebated on exports). So it requires exporters from other countries, who benefit greatly from their sales to American consumers, to shoulder part of the cost of their upkeep.

Oh, but what am I thinking? This would be a brand-new tax! No right-ward politician like Jeb Bush could even consider it. Far more right-eous to encourage the masses to be fruitful and multiply.