Jeb Bush is banking on 4 percent. That’s the annual rate of growth in gross domestic product that he’s forecasting for a Bush presidency. “There is not a reason in the world why we cannot grow at a rate of 4 percent a year,” Bush said in June when he officially announced his campaign.
Actually, there are quite a few reasons, including a half-century of economic history and the improbability that productivity would grow sufficiently to create such a high rate of growth. (Though it isn’t high compared with Mike Huckabee’s robust pledge of 6-percent growth.)
Productivity isn’t the only way to raise GDP. A rising population also works. And the surest, easiest way to increase population? Immigration.
Florida’s GDP grew more than 4 percent annually during Bush’s tenure. According to a Bloomberg analysis, that added up to 41 percent over Bush’s eight years. Per capita personal income grew more than 43 percent over that time, ranking 11th nationally. The housing price index went up 142 percent, the fourth-highest increase in the U.S. during that period.
Never miss a local story.
That last point has proved troubling, with critics including Paul Krugman pointing out that much of Florida’s growth under Bush resulted from a housing bubble that burst after Bush left office. Stan Humphries, chief economist at Zillow Inc., told Bloomberg News that the housing market accounted for about one quarter of the annual increase in Florida’s GDP from 2000 to 2005.
From 2008 to 2010 the state experienced a net population loss, according to data compiled by the Florida Department of Health. “During the four years after Bush left office, only Nevada lost a greater percentage of jobs,” Bloomberg reported.
While the housing bubble surely juiced Florida’s GDP, so did population growth. (In-migration was also a key to Rick Perry’s “Texas miracle.”) Florida’s population during Bush’s term grew 21.86 percent, according to Bloomberg. As Massachusetts Institute of Technology economist David Autor pointed out via email, GDP growth due to population increase doesn’t necessarily deliver improved living standards, since more people share a larger economic pie. “Definitely, growing the population does a lot for GDP!” he wrote. “But not much for GDP per capita (probably lowers it).”
According to state data, more than 80 percent of Florida population growth from 2000 to 2010 was due to migration. “Miami’s immigrants have made my hometown a vibrant, dynamic and exciting place to live, and that in turn has made it a magnet for even more immigration from inside and outside our country,” Bush wrote in the preface of a 2013 book on immigration that he co-authored.
Immigration is not incidental to Bush’s growth strategy. It’s fundamental. “In order to restore sustained economic growth going forward, we need a new immigration strategy that opens our doors to young, aspirational people from all around the world,” he wrote.
I asked University of California, Davis economist Giovanni Peri for a back-of-the-envelope estimate of how much immigration would have to increase for it to single-handedly drive GDP from, say, 2.5 percent annually to 4 percent. (From 2010 to 2014 the economy grew at about 2.2 percent annually.)
“Well if one is only looking for growth in total GDP,” he wrote via email, “then one needs a growth of labor force of 1.5 percent due to immigrants only. That will do the trick. The U.S. civilian labor force is about 157 million, this would imply admitting 2.3 million immigrants per year beyond what we admit now. This is a large number, it will roughly imply tripling the current inflow of immigrants, but it is not impossible.”
To be clear, Bush is not calling to triple legal immigration. He claims that tax reform, tax cuts and new energy policies will also power higher growth.
But there’s no denying the role that immigration played in Florida’s growth under Bush. And he makes no bones about it playing a role in his presidency. “We have to fix the broken immigration system,” he says on his campaign website, “so that it helps drive a growing economy.”
©2015 Bloomberg News