Your browser (Internet Explorer 7 or lower) is out of date. It has known security flaws and may not display all features of this and other websites. Learn how to update your browser.

X

Navigate / search

Immigration and the Future of the U.S. Economy

Jeremy Robbins is a Policy Advisor and Special Counsel in the Office of New York City Mayor Michael Bloomberg, where he helps manage the Partnership for a New American Economy.

During a chaotic four years spent frantically trying to stabilize the U.S. economy, we’ve endured bailouts, the stimulus, a perilous debt ceiling negotiation, and countless other measures to defend against the financial catastrophe of the day.  These fixes may have been short term necessities, but they did nothing to ensure long term growth or to fix the structural problems with our economy.

If we want a robust economic future for this country, we first need to dramatically retool our workforce.  Many necessary solutions will be infeasible because of debt constraints, inflation fears, or a polarized political climate.  But there is at least one way to revamp our workforce that does not break the bank, does not pass the burden to the next generation, and does not divide the political parties:  We can be smarter about our immigration laws.

Several danger signs jump out when you look at the U.S. workforce.  Our workforce is aging rapidly.  Seven states now boast populations with an average age over 40 years old.[1]  More worryingly, our workers are increasingly ill suited for the high- and low-skilled jobs that are necessary to keep our economy moving.

At the high skilled end, jobs in the innovation rich fields of science, technology, engineering, and math (“STEM” fields) grew three times faster than jobs in the rest of the economy over the last decade.[2]  But Americans are not entering these fields in sufficient numbers, and even during a recession more than one quarter of science and engineering firms report difficulty hiring.[3]  It is imperative that we convince and equip more Americans to pursue these fields, and it is equally imperative that we recruit the best STEM talent from around the world to come here if we want the next technologies, life-saving drugs, and scientific breakthroughs to be invented in the U.S.

At the low-skilled end, too few Americans are willing or able to work labor-intensive jobs.  One of the great successes over the last fifty years has been that Americans are now graduating high school and increasingly going to college.  Fifty years ago half of Americans lacked a high school diploma.  That number is now under 15% and falling further.[4]  This is a great success for the education of our citizens, but it has severely depleted the labor-intensive workforce in this country.

Simply stated, we need a workforce that is young, diverse, and flexible to meet the needs of an ever-changing market.

Just look at Europe.  With an aging society and a 20th century workforce that is ill-adapted for the 21st century economy, Europe’s economic prospects are dim even if it can weather the banking and debt crises it currently faces.

America faces the same barriers, but we have at least one large competitive advantage:  We are still the destination of choice for talented, hard-working individuals all over the world.  As a new analysis of U.S. Census data by the Partnership for a New American Economy and the Brookings Institution makes clear, this bodes well for America’s economic prospects if we are willing and able to capitalize on it.

The new data shows that as our population continues to age and as baby boomers begin to retire, immigrants provide a ready influx of young and diversely talented workers to keep our companies productive.  The share of immigrants in the workforce has grown from five to 16 percent over the last forty years, and has grown faster than the rise in immigrants in the population at large – which grew from five to less than 13 percent over the same time period – indicating that new immigrants are more likely to be of working age.[5]

More importantly, the new data shows that immigrants are filling the roles we need most at the low- and the high-skilled ends of the economy.   You see this in sectors all over the economy.  At the low skilled end in construction and agriculture, immigrants are most likely to be laborers while native born are most likely to be managers.  At the high skilled end in industries like high tech manufacturing and information technology, immigrants are more likely to be computer scientists.  And in healthcare, where there is a strong and growing need as baby boomers age for doctors at the high skilled end and home health workers on the low-skilled side, immigrants are far better poised to meet these needs than native-born.  Immigrants are nearly twice as likely as native-born workers in the health care industry to be physicians and surgeons (7.7 % and 4.0%, respectively), but also nearly twice as likely as native-born workers to become home health aides. (19.0% and 10.3%, respectively).[6]

Finally, as we look to where our economy will need to go if we are to remain competitive in the coming years, immigrants can play a large role in getting us there.  When you look at the 15 occupations that the Bureau of Labor Statistics expects to create the highest number of jobs between 2010 and 2020, immigrants are heavily represented in eight of them.[7]

This data should not be surprising given what we already know about the impact of immigration on our economy.  Immigrants are nearly twice as likely as native born to start a business,[8] and more than 40 percent of our Fortune 500 companies were founded by an immigrant or a child of immigrants.[9]

Nor should it be surprising given what economists have already told us about how immigration impacts American job creation through filling gaps in our economy, inventing products that lead to new jobs, or starting new businesses.  A recent study by the American Enterprise Institute and the Partnership for a New American Economy found that every additional foreign-born STEM grad whom we convince to remain in the U.S. creates an estimated 2.62 American jobs, and that every low-skilled, non-agriculture, temporary worker that we get to fill shortages in our economy creates an average of 4.64 American jobs.[10]

But our outdated immigration laws turn many of the workers we need most away.  There is no visa for entrepreneurs, so businesses that could be started in the U.S. are instead started elsewhere.  There are far too few visas for the top STEM grads we are training in our universities, so we are experience a brain drain that is equipping our competitors at our expense.  And low skilled visas to work on our farms, in our meatpacking plants, in our hotels, and in other industries are so difficult to get that our companies are not opening to full capacity or are even moving elsewhere.

All of these needlessly cost American jobs.  It’s time to be honest about the problems with our workforce and to be strategic about how we use immigration laws.  Let’s hope our representatives in D.C. take notice.

 


[1] U.S. Census, “2010 Census Shows Nation’s Population Is Aging,” May 26, 2011, http://2010.census.gov/news/releases/operations/cb11-cn147.html

[2] David Langdon, George McKittrick, David Beede, Beethika Khan, and Mark Doms, “STEM:  Good Jobs Now and for the Future”, U.S. Department of Commerce, Economics and Statistics Administration, July, 2011, p. 1.

[3] McKinsey Global Institute, “An Economy that Works: Job Creation and America’s Future,” (June 2011), available at http://www.mckinsey.com/Insights/MGI/Research/Labor_Markets/An_economy_that_works_for_US_job_creation

[4] U.S. Census, “Educational Attainment by State: 1990 to 2009,” http://www.census.gov/compendia/statab/2012/tables/12s0233.pdf

[5] Partnership for a New American Economy and the Brookings Institution, “Immigrant Workers in the U.S. Labor Force,” March 2012, http://www.renewoureconomy.org/brook_slideshow

[6] Partnership for a New American Economy and the Brookings Institution, “Immigrant Workers in the U.S. Labor Force,” March 2012, http://www.renewoureconomy.org/brook_slideshow

[7] Partnership for a New American Economy and the Brookings Institution, “Immigrant Workers in the U.S. Labor Force,” March 2012, http://www.renewoureconomy.org/brook_slideshow

[8] Robert Fairlie, “Kauffman Index of Entrepreneurial Activity, 1996-2008,” University of California at Santa Cruz, April, 2009, http://www.kauffman.org/uploadedFiles/kiea_042709.pdf

[9] Partnership for a New American Economy, “The ‘New American’ Fortune 500,” June 2011, http://www.renewoureconomy.org/sites/all/themes/pnae/img/new-american-fortune-500-june-2011.pdf

[10] American Enterprise Institute and the Partnership for a New American Economy, “Immigration and American Jobs,” December 2011, http://www.renewoureconomy.org/sites/all/themes/pnae/img/NAE_Im-AmerJobs.pdf

Comments

comments

Leave a comment

name

email (not published)

website