The Commerce Department’s recent announcement that the United States economy actually shrank by 3 percent in the first quarter of this year was at first quite startling.
Economic analysts then rushed in to explain the sharp drop as a function of seasonal factors and a wider trade deficit. In other words, it’s a blip and GDP growth the rest of this year should be much stronger.
A good barometer of where things stand is always the American people. Numbers are important but viewing the economy just through numbers is like watching television in black and white. Understanding how people feel about the economy, on the other hand, adds color and HD clarity to the picture.
Americans know intuitively that the economy is not as strong as it should be: a recent poll found that 86 percent of respondents rated the economy as the most important issue facing the country. If the economy was strong, those numbers would be much lower.
More astonishingly, five years into an official recovery, more than half of those in a Gallup poll believe economic conditions are “getting worse”—in complete contradiction to what the Labor Department numbers tell us.
That means economic growth must be the number one priority for Washington: for this Congress’ last months, for the remainder of the President’s term, and for the next Congress.
Especially for those on the ballot this November, a focus on growth simply can’t wait. Sure, there are some good ideas on offer in Washington and elsewhere. Democrats and Republicans both agree, for example, that the time has come for tax reform. Broad regulatory reform, too, appears to be gathering more support.
These and other ideas should be good for economic growth. But they’re still a long way off and their effects even longer. What Congress and the President need are ideas that promise to immediately jumpstart the economy without worsening the deficit.
Fortunately, there is such an idea at hand: Congress should act now to create a new startup visa to attract immigrant entrepreneurs.
A startup visa that allows immigrants to start businesses in America has the potential to create many needed American jobs and boost GDP growth. A Kauffman Foundation analysis of one proposal in Congress to enact a startup visa found that it could create up to 1.6 million new jobs for Americans over 10 years and add an additional 1.5 percent to economic growth. This estimate, derived from historical data on employer firm creation and survival, plus Census Bureau statistics on job creation, is considered conservative.
Happily, a startup visa has bipartisan support in Congress. The idea was included in the comprehensive immigration bill that passed the Senate last year and in legislation the House Judiciary Committee approved in 2013. During committee consideration of that bill, members of both parties expressed support for a visa that would create jobs for Americans.
But what about the defeat of Rep. Eric CantorEric CantorDemocrats step up calls that Russian hack was act of war Paul replaces Cruz as GOP agitator GOP shifting on immigration MORE (R-Va.), whose loss has been interpreted as eliminating the chance of anything with the word “immigrant” in it of seeing the light of day?
A startup visa for entrepreneurs is about immigration in the same way that the Fourth of July is only about fireworks and parades. Yes, both are part of the day but they were not what we celebrated last week.
Pure and simple, a startup visa is about jobs for Americans and economic growth—two things the country desperately needs.
Immigrants were twice as likely to start businesses as native-born Americans in 2013. These are companies ready to grow and create jobs immediately—all Congress has to do is open the door to that entrepreneurial energy. The resulting job creation and economic growth would benefit all.
Wiens is policy director at the Ewing Marion Kauffman Foundation and Stangler is vice president of research and policy. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that works with partners to advance entrepreneurship in America and improve the education of children and youth.