In an otherwise thoughtful article on immigration, David Leonhardt asserts that "the country will almost certainly need an influx of new arrivals in coming decades. The baby boomers are about to start turning 65. Someone will have to take their place in the work force — and help pay their Medicare and Social Security bills." The United States will not need immigrants as the baby boomers retire, rather it will face a policy choice about the type of labor market and economy that it wishes to have. Currently, immigrants fill many of the lowest paying jobs, such as custodians, restaurant workers, cab drivers, house cleaners. If there were fewer immigrants, wages in these occupations would rise sharply. These would make it far more costly to go out to restaurants or to pay to have someone clean a house or hotel room. As a result, presumably people would go out to eat less frequently and be less likely to have a house cleaner in their home, but this would not lead to an economic collapse. In terms of the finances of Social Security and Medicare, raising the wages of those at the bottom relative to those at the top would by itself substantially improve Social Security's finances. Much of the projected shortfall over the program's 75-year planning horizon is due to the upward redistribution of income over the last three decades. If real wages grow at a health pace, and the health care system is fixed, then the taxes needed to sustain Social Security and Medicare will not impose a large burden on the working population even without a large influx of immigrants.
--Dean Baker
