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Let's Talk Immigration

July 9, 2019
Either the U.S. will take action to increase its number of workers, or witness a permanent economic demise.

When it comes to immigration, it’s too bad legendary comedian Joan Rivers is no longer around to ask, “Can we talk?” Because few policy issues are more important, create more political division, are more misunderstood and need more reasonable and rational discussion.

Let’s start with some facts: Roughly 45 million people, or 13.7% of the total U.S. population, are immigrants today, including illegal immigrants. This percentage is not a historic high. That occurred in 1885, at the height of Eastern and Southern European immigration, when 14.8% of the populace was not born here. The percentage again approached that peak in 1910. Then, in the half-century following World War I, immigrants entering the country declined dramatically to 4.7%. It’s risen steadily back to pre-World War I proportions since 1970.

That steady increase, especially of unauthorized immigrants, combined with significant economic changes caused by globalization and technology, has led to a backlash of today’s wave of Latin American immigrants. Of course, this visceral response shouldn’t surprise us: No generation living in this country since 1700 has openly welcomed the arrival of new settlers. The original English settlers disdained the Scottish immigrants of the mid-1700s. This newly combined demographic scorned the Irish and German wave of the 1840s and 1850s. The new melting pot of British, German, and Irish ridiculed and excluded the Italians and Eastern European Jews who started arriving en masse in the latter decades of the 19th century. And Asian immigrants to America have always struggled to be accepted.

But let’s be clear: while there are legitimate concerns about illegal immigration (see below), there’s no turning back the clock in terms of the demographic changes occurring in this country. A recent report by Axios, based on the U.S. Census Bureau and United Nations data, shows that by 2040 not only will there be more (current) minorities than whites, there will be more senior citizens than children. That’s a demographic change that’s far more important than the growth of non-European citizens. In fact, it should send shivers down the spines of both business owners in need of employees and government officials worried about Social Security trust funds running out of cash by 2034.

Why is our aging population a problem? In 2018, 15.2% of the population was 65 or older. That compares to 22.7% of people under the age of 18. By 2040 those under 18 will account for 20.6% of the population, while those 65 and older will account for 21.7%. This means a steadily diminishing supply of employees—the population that can pay into and cover the payments to retired Social Security beneficiaries.

The U.S. manufacturing sector is already experiencing skilled worker shortages, unlike any it has seen before. So the demographic changes of the coming decades will result in one of two things: either this country will take action to reverse the trend and increase its number of workers (with more emphasis on trade, technical, and skilled-service training), or we will witness a permanent economic demise such as Japan has started to experience.

So, can we talk? With birthrates falling for a fourth consecutive year and fertility rates in the U.S. at an all-time low – 1.73, or below the 2.1 threshhold for a population to sustain itself in most countries  – the fact that the United States has people clamoring to enter and become citizens gives us a competitive advantage over virtually every major industrial nation in the world. Most other industrial economies have both lower fertility rates and lower immigration rates. For example, China’s fertility rate is 1.62, and its percentage of immigrants (a representation of how many people try to immigrate each year) is 0.1%. Japan’s fertility rate is 1.44, and its percentage of immigrants is 1.9%. Only Germany, with a fertility rate of 1.5 but an immigration percentage of 14.9%, has a comparable opportunity as the U.S. to offset a dramatic workforce decline.

The need for a smart, practical, and more welcoming immigration policy doesn’t disregard the legitimate concern about the levels of unauthorized immigration into the United States. A Pew Research Center study notes that while 77% of immigrants are in the country legally, 23% -- or about 10 million – are unauthorized. Still, this is a drop from the 12.2 million just before the Great Recession. Of these, the majority work in agriculture, primarily in high-risk jobs on dairy, fruit, and vegetable farms that are always hard to fill. Farmers will tell you that there’s a critical role here even for them – we just need to figure out how to incorporate them into society. 

Even with the challenge of unauthorized immigration, let’s not cut our nose to spite our face. We need a steady stream of young, highly educated and skilled immigrants, looking for economic and entrepreneurial opportunities, to choose the United States as their home in the coming decades. 

Stephen Gold is president and CEO, MAPI (Manufacturers Alliance for Productivity and Innovation).

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