From the Editor – November 2019

October 28, 2019
From the Editor

More than 40 million people living in the United States were born in other countries, and almost an equal number have at least one foreign-born parent. Together, the first generation (foreign-born) and second generation (children of the foreign-born) comprise almost one in four Americans. So, it comes as little surprise, then, that many U.S. residents view immigration as a major policy issue facing the nation.

The sad fact, though, is that blaming immigrants for the nation’s woes has long been an American pastime, and one of the most well-entrenched myths about immigrants is that they steal jobs from American workers, collect an excess of government benefits, and, in general, represent a drain on the economy. However, contrary to popular belief, immigrants do not take away jobs from American workers. Instead, they create new jobs by forming new businesses, spend their incomes on American goods and services, pay taxes, and raise the productivity of U.S. businesses. Immigrants are good for the economy, not the other way around.  As the characters in Lin-Manuel Miranda’s ‘Hamilton’ sing: “Immigrants – we get the job done!”

Indeed, a 2017 report entitled The Economic and Fiscal Consequences of Immigration from the National Academies of Sciences, Engineering, and Medicine found that, “Immigration supplies workers who have helped the United States to avoid the problems facing stagnant economies created by unfavorable demographics—in particular, an aging (and, in the case of Japan, a shrinking) workforce. Moreover, the infusion by high-skilled immigration of human capital has boosted the nation’s capacity for innovation, entrepreneurship, and technological change.” Immigrants start companies at twice the rate of native-born Americans. Almost half the companies in the Fortune 500 were started by immigrants or their children, and without them, jobs are likely to be scarcer in the future.

The report also states, “The high employment levels for the least educated immigrants indicate that employer demand for low-skilled labor remains high. There are still many jobs in the United States for low-skilled workers, and immigrants appear to be taking low-skilled jobs that natives are either not available or unwilling to take.” Immigrants make up more than a third of the workforce in some industries. Fully 36 percent of workers in the farming, fishing, and forestry fields are immigrants without a college degree, as are 36 percent of building and grounds cleaning and maintenance workers, 27 percent of hotel workers, and 21 percent of home health care industry workers. Their geographic mobility helps local economies respond to worker shortages, smoothing out bumps that could otherwise weaken the economy.

The report concludes: “If the American economy grows and requires more workers both to replace those who retire and to create new firms and industries, the primary source of labor will be first and second-generational immigrants. This basic fact will hold at all levels, from low-skilled service jobs to professionals with postgraduate degrees.”

In addition, immigrants bolster the national birth rate, which has recently dropped to historically low levels among the native-born population. A low birth rate can lead to a decline in the labor force, reduced demand in certain industries such as housing, and a slowing and less dynamic economy. By 2035, the Census Bureau projects that there will be only about 2.4 working-age adults in the U.S. for each person age 65 or older, fewer than in any prior decade on record, and down from 4.7 working-age adults in 2016. The ratio of working-age adults to children and elderly combined is expected to fall from 1.6 to 1.3 between 2016 and 2030 and remain there until at least 2060. Adding younger workers now can ease this demographic shift, and partly for this reason, increases in immigration tend to improve the health of the Social Security and Medicare trust funds.

So in terms of labor force growth, entrepreneurship, and human capital, immigrants are essential to economic growth in America. They always have been, they are now, and they always will be.

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