Pia Orrenius is an open-hearted realist when it comes to immigration

Pia Orrenius, VP and senior economist with the Federal Reserve Bank in Dallas, discusses the economics of immigration. She and George also explain how migration is a central theme in the biblical story.

Listen here, read the transcript below, or click here for the full video version.

George Mason:
Welcome to Good God, conversations that matter about faith and public life. I'm your host, George Mason. And we're continuing our series of conversations about immigration, a big, broad topic that has so many implications in our everyday lives. We are delighted to welcome to the program today, Pia Orrenius. Pia, glad to have you.

Pia Orrenius:
Thank you. I'm glad to be here.

George Mason:
Great. So let me introduce you a little further and say that Pia is the vice president and senior economist at the Federal Reserve Bank of Dallas. She also served in the Bush administration in 2004 and '05 in the Council of Economic Advisors in the Executive Office of the President. So she's been at work in the labor sector, especially of immigration, for a long time. And what's more, she's even written journal articles and books about this, including one I hope we'll talk about a little bit called Beside the Golden Door, US Immigration Reform in a New Era of Globalization. Big words there, but a reference to Emma Lazarus' poem on the Statue of Liberty.

George Mason:
So again, you come well-equipped to give us insights that most of us mere mortals really don't have, Pia, as we wrestle with this matter. But I suppose let's start with the labor market and the economic portion of this, because I think very often we do this conversation around culture, and around our national identity, and around questions of how many people can we manage in terms of immigration, things of that nature.

George Mason:
But as I understand it, we are finding ourselves in a tremendous challenge with a GDP that is projected to slow over the next decade, and largely because of a shortage in the labor market, as I understand it. And we have a declining birth rate and that's true, not just of US citizens and Anglos, but also remarkably of Hispanic folk who are making the choice not to have as large to families. So this becomes a really important question, immigration, that is not only a political one, not only a partisan one, but really one of the very question of our flourishing economy. So help us make some sense of that and go beyond the quick summary I gave. And if you want to dispute anything I just said, that'd be great too.

Pia Orrenius:
No, I think what you said is correct, George. So we are basically at a period in sort of American history, economic and demographic history, at which labor force growth and by extension obviously population growth is slowing dramatically. And what's particularly impacting the labor force at this juncture is the retirement of the baby boomers. The baby boomers was a very large cohort for its time and they've contributed immensely to the labor market. And so they're all retiring, basically, starting now or a few years ago, really over the next 10 to 15 years.

Pia Orrenius:
So the loss of that gigantic cohort at the same time that we're also seeing a pronounced decline in the birth rate, as you mentioned, that really started about 2007. So we're about 15 years into that slowdown. And so on all these levels, and at the same time, the workers that we have are aging. Obviously we're all aging, but we're aging faster because we have fewer cohorts of new workers joining.

Pia Orrenius:
And so really the growth rate of the economy is to a large extent determined by the growth rate of the labor force, which is of course by extension the growth rate of the population. So with all those things, feeding into it, we're looking at substantially slower labor force growth, which means substantially slower economic growth.

Pia Orrenius:
Now that can partly be addressed by immigration, not entirely addressed by immigration. There's a lot of other things we can do to sort of give people incentive to work. But if we're interested in growing the economy and keeping the growth rates sort of where we're used to having them, then immigration has to be part of the answer.

George Mason:
So let me possibly push it to the other side, or the unintended consequences of what happens when we have a sort of focus only on economic expansion and meeting the birth rate and growing the economy. Because we also find ourselves in this moment with a real danger of climate change and of the impact of more people on the globe, right? So in a sense, we're talking about how the labor market and the economy is harmed in a sense by not having replacement level, at least, of birth rate.

George Mason:
And yet overall it may be to the betterment of the planet and our overall wellbeing if we maybe aren't replacing everyone that we have. Because the demand for more and more just puts more pressure on nature. So how do you balance the real needs of a sense of, yes, we focus on growth because that ultimately is good for everyone because the pie grows, right? And yet on the other hand, we're diminishing our resources and maybe harming the planet more. How much do you reckon with all of that in all the algorithms you come up with in your work?

Pia Orrenius:
Well, it's true. Of course, being at the Federal Reserve, we're very focused on economic growth. So that really is our big objective among a few others, but it's true that in more recent years, this idea of just growing bigger and bigger has come under attack and criticism and for valid reasons. Because really do we want to grow? We know the effects on the climate. We know the effects on resources. We know that we care now maybe more than ever about the quality of life, as opposed to just having more of it. And so all these are considerations that need to be taken into account.

Pia Orrenius:
But I think no matter what we do, we're going to slow because, like I said, there's just too many factors feeding into the slowing of economic growth and population growth more generally. And so even with immigration and more liberal immigration, we're still going to have slowing growth. The tricky thing is that if immigration is not just make us bigger, it also makes us better.

Pia Orrenius:
And what do I mean when I say that it makes us more productive and more efficient in how we run our economy? So immigrants come in and they tend to contribute on a number of levels. They tend to address bottlenecks in the labor markets. So maybe for example, types of occupations where we have shortages or bottlenecks. They also come in and they tend to be more entrepreneurial. So they start more businesses on average than natives do. And they tend to be more innovative. So there's been studies that show, especially high skilled immigrants that come in the STEM fields, so science, technology, engineering and math, a lot of computer occupations, and also in the medical fields. They're contributing to research and development, new technologies, new medicines. And so you also have that dimension.

Pia Orrenius:
So with immigration, yes, you get more people. But you also get a more productive economy. And at the end of the day, it's productivity growth that makes us all better off. So we would have to think really hard about cutting off immigration for the purposes of trying to contain growth when we know that immigration is part of the puzzle. It's what lifts productivity growth and what makes us better off. Economists say the per capita GDP grows, not just the GDP growing. And that's really has to be the goal. The goal has to be trying to increase the standard of living of Americans.

George Mason:
Okay. So we have gotten into some fairly deep economic language that I think some of our viewers might not fully appreciate if they don't have PhDs in economics as you do, or even just a bachelor's in business as I do, weirdly as a pastor. But you made the claim that productivity is a really important factor in making our economy better and making our lives better.

George Mason:
And I when you say productivity, I think it's helpful for people to understand that that requires more efficient work, right? That we're talking about the output being done in a more efficient way. So talk a little bit more about productivity and why that would be a key, and why immigrants really help that process.

Pia Orrenius:
So productivity, it can come about, it can just be you and us being more efficient about how we work less hours but produce the same amount, or produce even more. Just in how we organize ourselves. Or you can use technology and become more efficient. So you don't have to travel to a meeting. You can just do a zoom meeting. That's an efficiency gain there. But productivity also-

George Mason:
Can you-

Pia Orrenius:
Yes?

George Mason:
Here we are using zoom and having a podcast. So there we are.

Pia Orrenius:
Exactly. Right. So we saved a lot of time, commuting and not having to go. Although I do relish meeting people in person. I do miss that. But yeah, it is an example of an efficiency.

Pia Orrenius:
And then more importantly, really, it's innovation and entrepreneurialism. So innovation, when people come together and they come up with new technologies. I mentioned medicines and things like that are also the things that make us able to produce a lot more with less. And so doing things better, doing things smarter, is the key to increasing the standard of living and making us all better off.

Pia Orrenius:
And it just so happens that immigrants are a very key piece of that. We have a lot of studies that show that. So that's one of the biggest reasons, I think, that that even in light of our concerns about growing bigger and consuming the planet's resources and climate and all those, I think those things can be addressed in a certain way, a smart way. But not necessarily by having to cut off the things that help us grow, especially grow productivity, like immigration.

George Mason:
Well, and if we're even talking about the climate, the idea of innovation in the energy field is a critical part of that too. And I think that often when we think of immigration, we are focused on the Southern border, and we can talk about that a little more, and we almost always do in this respect. But there's also the factor that you were talking about, how some of the most innovative breakthroughs that have taken place in this country and for the world technologically in the internet age, and with computer technology and the like, are the product of immigrants who have come to school in this country and who have stayed and who have created these remarkable businesses.

George Mason:
And all you have to do is say the word Google, and you could just about stop there even though the Google story is multiplied many times over, right? So when people think about immigration, they also need to be thinking about this enormous human capital that comes to us through immigration, that if we use a ham-fisted approach to limiting immigration, we're really cutting off our nose to spite our face aren't we?

Pia Orrenius:
Absolutely. I mean, what's unfortunate is that, like you mentioned the Southern border, is that the whole debate over managing the border and illegal immigration or unauthorized immigration, that that sort of debate tarnishes all the other efforts to do immigration reform and that are affecting high skilled immigrants, medium skilled immigrants, family based immigrants.

Pia Orrenius:
There's just so many pieces to the immigration policy puzzle that we have to be very careful. And I think we're asking a lot of the public, but I think it's fair to ask them to make these separate issues, and to treat them separately, and to say, you know what, I want my government to run and manage immigration, make sure it's legal, bring in what's going to benefit the American economy, and then buy extension also the global economy. But I'm going to trust them to be able to do the job.

Pia Orrenius:
And so allow sort of reform to move forward even though we are bogged down in certain areas. And certainly at the Southern border, we are bogged down to a certain extent as we try to figure out how to deal with so many people coming, and wanting to come into the United States.

George Mason:
So as we're doing this, I think it's helpful to step back and say that you can look at this from an economic and labor market perspective. You can look at it from a nationalistic perspective on how do you manage the people coming into your country, and a cultural perspective, and those sorts of things. But you know, this program's called Good God. So we're always trying to make a connection to the human aspect of this, and the spiritual, and draw upon what is it about our religious traditions that informs this conversation.

George Mason:
And from the account of Genesis, we have that we're given a mandate to work. That it's very much a part of the dignity of human beings that they are able to fulfill being made in the image of God, that they get to till the earth and work it, and to make more of creation. And then to do so, we also have one story after another of migration that is at the very heart of it. When the children of Israel, Jacob's family, were experiencing famine, what did they do? They went to Egypt, right? They left their home because of circumstances in their homeland, and they went to Egypt.

George Mason:
And then of course, things went bad in Egypt because of oppression and corrupt government and a labor market that was not functioning properly. And so they were called out of there, and then went into ultimately the promised land. All of this is a migration story, right? And it's all about human flourishing, and the right of people to actually have an opportunity to work, and to contribute, and to eat, and to have healthy lives.

George Mason:
So when religious people actually look at a story like this, one of the struggles is how do we have conversation with people who are only looking at, yeah, but our nation has a right to guard its borders? And we should or shouldn't have somebody taking our job. Or we need somebody to come and do this job there. There's a bigger picture here, isn't there?

Pia Orrenius:
Absolutely. And I'll turn the question back. Isn't there the one, I don't remember where in the Bible this is, about the stranger, and letting the stranger in, and sharing your food?

George Mason:
Absolutely. In fact, part of the Hebrew tradition is that you leave the corners of your field unharvested so that the poor are able to come and eat without losing their dignity. They don't have to have a handout. It's left for them. You know? So I mean, there's all sorts of things like that. The welcoming of the stranger as if he or she is one of your own is of the biblical story. And it's a part that we conveniently forget at times, isn't it?

Pia Orrenius:
Yeah. So that's the one sort of that me personally, obviously, that I sort of remind myself about that. But the nice thing about immigration is that it's almost a win-win. When it's well done and well managed, it can be a win-win. So we can benefit from the labor, and also from the other contributions of immigrants to our society. We can let them in, and we benefit and they benefit, because they're so much better off than where they came from in most cases.

Pia Orrenius:
So it really is a win-win when it's not a big sacrifice to let people in. I mean, we just have to remind ourselves that we are being made better off on average from the arrival, and we're also helping them. So that's good. But of course at the same time, you have to be practical and you have to think we can't take everybody. And we can hurt ourselves in taking in too many, and hurt ourselves, I mean, by fueling political division and anger and resentment and that type of thing.

Pia Orrenius:
We have a responsibility to bring people in a planned managed way, a number that is not too overwhelming, a number that does not disrupt labor markets, or throw native workers out of jobs. I mean, we have to do this carefully, and it can be done. Absolutely, it can be done. I was in the White House a very short period of time, but I'd love to go back and just give them more of my advice because I think I know how we can do it in terms of doing-

George Mason:
How can we do it, Pia? Come on. And we'll just broadcast this to the White House. Okay?

Pia Orrenius:
Oh yeah. Okay, George. Sounds good. Well, I think absolutely essential to manage the border. Absolutely essential to be out there. Be humanitarians. Respect refugee law. But also to say we're not going to be taken advantage of. There's bad actors out there. There's people that are coming for all kinds of different reasons.

Pia Orrenius:
I think we get to set the criteria for who gets to come, and when, and how, and that's it. We need to manage it very clearly. We need to put the numbers out in terms of how many we can take, and then we take that many. We do really have to control the flow because if you look, for example, now at the Southern border, I mean, if you look at the whole rest of the world. I mean, we're a big country. We're 330 million people, but there's still billions and billions out there, most of whom want to come to the United States just given the chance.

Pia Orrenius:
But I think what we've shown in recent years is, I mean, right now it looks like the border is out of control. But generally I don't think that's the case. It's more under control than it's ever been. We have 20,000 border patrol agents down there doing the best job they can for the most part. And so I think we've shown that we can manage the flow, and that's what we have to continue doing.

Pia Orrenius:
And then at the same time, I think our priority has to be the people that are already here. So we have about, we think, 10 to 12 million undocumented immigrants. And of course I've written about this in my book that you mentioned, and other papers and so forth. My reasoning there is that we really have to take care of this group of people. They have to be legalized somehow, some way. We need to do that first, and then we need to look outward and bring in the people for humanitarian reasons and to help our economy, and for all the different reasons that we bring people in. But we also already have immigrants here that have to be taken care of. There's a lot of reasons that this situation has to be addressed.

George Mason:
Okay. So the taking care of those who are already here, and in fact, the taking care of those who are seeking asylum, who have been brought in. I mean, it does seem that we have lots of people, you say 20,000 at the border who are law enforcement at the border of one form or another, immigration force. But it does seem that we do not have the staffing necessary to go through immigration courts and to vet people in a timely fashion, which is itself just an enormous backlog.

George Mason:
And then you have these DACA kids who grew up here. Some of them are adults now, and they still haven't had their opportunity. So how do we convince Congress, and the administration, to really reform immigration, not just in terms of policies of how many come in, but the allocation of resources and staffing, so that we can treat people humanely and move people through in an efficient way?

Pia Orrenius:
There's a lot of change that can be made. I mean, there's some real low hanging fruit. I've talked to, for example, the immigration judges that do the refugee, or the asylum cases, for example. It's a very poorly organized in the sense that one random immigration judge will get a case from Cameroon, a scientist docket. And so he has to go through and study everything about Cameroon and what was the political persecution in Cameroon, of what groups, and this and that. And then his next case, may be a Chinese immigrant who wants asylum.

Pia Orrenius:
And so I mean, one easy thing would be to just assign one judge to all the cases from Cameroon, another one all the cases from China. They can become specialists and experts, and then they can process those cases much faster. But I mean, these judges are trying to process these cases, and they don't have resources. They don't get analysts and so forth to help them.

Pia Orrenius:
So that's just an example of some of the low hanging fruit. I mean, there's just a lot of ways that we could be doing things better. And I think what's frustrating to me is that these easy opportunities are out there, and it just seems like what really is lacking is the ability to make change and lasting, intelligent, smart choices.

George Mason:
Okay. All right. So you wrote this book Beside the Golden Door. I think Emma Lazarus' poem, The New Colossus, that is on the base of the statue of Liberty, is something that a lot of us know or know about. It's a sonnet, and I'll just read the last few lines that are the most familiar so that we can remember these together, and then let you comment on them:

George Mason:
"Keep, ancient lands, your storied pomp!" cries she with silent lips. "Give me your tired, your poor, your huddled masses, yearning to breathe free, the wretched refuge of your teeming shores. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door!" Oh my.

Pia Orrenius:
It's so beautiful.

George Mason:
It is so beautiful. But now, Pia, that poem was written not just in a vacuum to put on this gift, of course, from France that sits in our New York Harbor where I grew up, and where my father, by the way, was a ship pilot in New York Harbor. So I spent a lot of time going past that on the New York ferry, the Staten Island Ferry.

George Mason:
So the context of this was a time when lots of new refugees were coming into the country, and there was a lot of tension in people's minds about all these Italians, and Eastern Europeans, and Jews, Russian Jews, and the like. And we have in the background of that, the limitation of Chinese immigrants that had happened just a few years earlier. And so talk to us about how this poem speaks to immigration today. Or is it only an artifact of a day gone by that we can't any longer afford?

Pia Orrenius:
Yeah. I mean, that's a good question. And there's people who argue that back then, because we didn't really have a lot of social services, or spending on new arrivals, or other poor and low income families, that it was possible to bring in large numbers of immigrants. And that it's no longer possible because we have this social safety net that whereby we have to provide for them.

Pia Orrenius:
So I guess I would say I would, I still love the poem and I think it still holds true. But it has a little footnote on it, which kind of just destroys it, I guess. But the little footnote that says we're going to take as many as we can, sort of we're going to do the best that we can. Help those that we can in a sense. But again, I mean, our first responsibility is to Americans, people that are already here.

Pia Orrenius:
And so, I mean, not just Americans, but other immigrants. Anyone who's already here, our responsibility is first and foremost to them. So we try to fulfill these obligations to the extent possible, but without really, like I said, disrupting the labor market, disrupting the social contract with the people that we already have.

Pia Orrenius:
But that's possible. You can totally do it. You just have to, for example, and we talk about this in our book, is you can't have too much low, skilled immigration. And by that, I mean, low wage workers, and maybe refugees and asylum seekers to a certain extent. You can bring in a certain amount, disperse them across the country, make sure they go to growing regions, which we do actually, so that they can easily transition into the labor market. And manage it that way.

Pia Orrenius:
We can't bring in unlimited numbers. We can't have open borders. This has to be managed. Because first and foremost, we're accountable to the people that are already here. But it's doable, and it's beautiful for the people that we can help. And I think we have some recent experiences where the government has really decreased quotas, on refugees for example, to point which was almost absurd. You know, something like 10,000 refugees in a year was one of the quotas, or 15,000 is what they wanted to lower it to.

Pia Orrenius:
But we're a country of 330 million. I mean, that's not nearly enough to accommodate. Really I mean, we are accountable to the rest of the world. We have to do our part. So bring in a good number, but also bring in a good balance. Make sure you're balancing it out so that you bring in all kinds of immigrants. And that's going to really make sure that we don't get too much of anyone kind, or that resources are not overwhelmed.

George Mason:
To your point about how this can be done. Maybe we could point to the experience in Germany where Angela Merkel put her career on the line in welcoming Syrian refugees and others from war-torn areas that were coming, mostly Muslim populations. And she said we're going to take them. While other countries were putting up fences, she took them. They required them to learn German. They were able to space them throughout the country, and to address some of the pockets in the labor market that been unaddressed. And they have integrated into that economy more than a million of them. And everyone told her that that couldn't be done. It would ruin the culture, but there was a kind of sort of redemption in the German psyche, I think, about being willing to be in a saving mode after World War II, that this was their moment that they could do this.

George Mason:
And I wonder what would it take for us to learn some lessons from some place like Germany in that regard, and to think about renewing our own spirit of being that Emma Lazarus place of welcome.

Pia Orrenius:
It was a beautiful moment sort of when Angela Merkel did that, as you pointed out, and really allowed over a million refugees to come into Germany, just in a very short period of time. I will say, however, that I wouldn't have done it. And the reason I wouldn't have done it is because what followed was a big backlash, and a lot of controversy, and spurring the anti-immigrant movement at the same time.

Pia Orrenius:
So I still believe that the best way to get consensus and buy-in is to do it slowly, do it gradually. It's very heartwarming to open your arms and welcome people in as many as, and that was a huge number. But beware, because what happened in the years following was that there was a backlash.

Pia Orrenius:
And I think we are accountable. Like I said, we have to be careful and we have to do things in a gradual way. And so even though we'd like to do big things and that's very admirable. But again, we're managing. This is a long-term gain, because really we need the immigrants to come in. We need them to be accepted. We don't want discrimination. We don't want racism. We want an inclusive economy. And so we need buy-in from everyone that's here already. And so that's our job. Our job is to bring them in a way that we still maintain the buy-in from the people that are already here, and that people can see the benefits.

George Mason:
Well, you're really talking my language now, I think, in terms of the religious and spiritual obligation to help create the spirit of welcome and to change the attitudes of people so that there's not a backlash. And politically we're seeing that we're really wrestling with that right now in our country overall. But maybe we can prayerfully work together to find a new cooperation. Certainly immigration's one we have to have that on. And Pia, thank you for all you're doing in your space to make us better, and to make us more humane and flourishing as a nation.

Pia Orrenius:
Thank you, George. Thank you for having me.

George Mason:
Delightful. Take care.

Pia Orrenius:
Bye-bye.

Speaker 3:
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