Population growth has long been a precursor to economic prosperity. But a new study finds that in recent decades America’s rising population has sparked just the opposite: higher rates of unemployment and poverty.
Economists are remiss in equating job growth with economic prosperity, according to Rethinking Growth in a Finite World, a 2012 study by the Federation for American Immigration Reform. Here’s why: Job creation causes people to swarm areas with new job growth in an attempt to take advantage of those finite employment opportunities. In doing so, newcomers burden infrastructure and the local tax base and contribute to overpopulation and urban sprawl. Local job growth coupled with this population surge actually offsets gains in overall employment, the study found.
An analysis cited by the study found that a 1 percent population growth rate between 2000 and 2009 was associated with a $2,500 drop in per capita income.
The study also criticizes subsidies and tax breaks offered to corporations by local governments as a means to lure new business to their municipality. ”These subsidies do not create jobs, but redistribute them,” the study states.
The U.S. government spends $50 billion annually on economic development incentives for corporations, which lead to higher taxes and cuts in local services, according to the study.
“State and local governments should stop prioritizing ‘job creation’ and start prioritizing the creation and continuation of policies that actually improve the quality of citizens’ lives,” the study states. “Increasing the overall size of the economy is less important than improving the quality of life. Economic development should improve the well-being of all citizens, and should not be a code word for growth policies that favor powerful special interests at the expense of the majority.”
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