Diversity & Productivity

Further, it is proposed to set the remittance cap based on diversity considerations. There is a public good gained through more racially and ethnically integrated neighborhoods and towns, especially in the face of the recent rise in racial residential segregation (Frey 2018). For example, segregation is presumably at least partially responsible for differences in education, since schooling in the United States often depends on a local areas’ socioeconomic makeup, with minority populations such as blacks and hispanics with on average lower household wealth than their white counterparts, a trend set to continue (Sherman 2017). Furthermore, America is suffering from a crisis of so-called ‘lost einsteins,’ whereby many children from disadvantaged groups see significantly lower rates of innovative activities (as measured through patent authoring) than otherwise expected. For example, one study notes that “if women, minorities, and children from low- income families were to invent at the same rate as white men from high-income families, the rate of innovation in the economy would quadruple” (Bell et al. 2017, pg. 16). Research increasingly illustrates the lost potential resulting from racial stratification and segregation, costs which can potentially be ameliorated through a more targeted immigration policy.

With demographic trends continuing, the United States will see a lower proportion of the white population than in our recent history. The immigrant population is of differing ethnic and racial stock (Suh 2015), and is one of the factors in the gradually decreasing proportion of the white population. Given the tendency for immigrants to cluster in neighborhoods and specific areas, the risk of increasing segregation is more so heightened. The fear of ethnic enclaves has been a recurring paranoia, with some speculating that the unique factors of American history produced a melting pot of greater assimilatory power to counter the proliferation of enclaves (Borjas 2006, pg. 65-68). Yet these enclaves also provide immigrants a baseline social network and support system. The byproducts include helpful links for employment and housing, and institutional forces like community centers and ethnic churches providing bevies of support (Tsang 2014, pg. 1182-1187). Hopefully by leveraging diversity considerations into the remittance system, more individual migrants will take the step of expanding the spread of foreign-born populations to new places, forming the foundation for the expected future diverse immigrant cohorts. Aside from the phenomenon of ethnic enclaves and their impact on immigrants’ social mobility, there are other compelling reasons to promote the further geographic spread of immigration.

Central to that contention is research concluding that more diverse workplaces tend to be more productive. One study using city-level data found that every standard deviation increase in workplace diversity correlates with a six percent wage increase (with wages being used as a proxy for productivity), even after controlling for a variety of factors advocated generally by skeptical economists (Sparber 2009, pg. 79). A sociological review found that increased diversity in a workforce helps in nearly every area that detractors often point to as the harm of diversity. Even after controlling for a myriad of factors, increased diversity was significantly correlated with increased sales, profitability, market share, and the number of customers (Herring 2009, pg. 218). Furthermore, with the trend of low productivity growth in recent years (Blinder 2015), systematic attempts to further innovate labor force combinations are well justified. A side note: for administrative or bureaucratic purposes, it may be easiest to use a simplified measure of just non-white to white population--rather than breaking it down by black, hispanic, asian, pacific islander, etc--with immigrants categorized according to how they would answer questions on race from the Census Bureau. To limit the negative effects of racial segregation and to maximize the social good of diverse workplaces, a remittance cap could serve to ameliorate a rising problem and contribute to creating more productive and innovative American firms.