I realize writing a blog about immigration now is about as risk-free as shouting ‘fire’ in a crowded theatre. I also know that I am not without my own bias on the subject, as I am friends with many first and second-generation immigrants who have accomplished wonderful things, which has influenced my thinking. Then three years ago, our son fell in love with a fellow engineering PhD candidate he met in class at OSU, and she has become like a second daughter to us. She was born and raised in India, which has made the topic even more personal. That’s my up-front disclosure.
What finally encouraged me to approach the topic was an article from The Brookings Institution a client forwarded to me that made the current debate about immigration financially relevant to those who may feel far removed from the subject.
In late December, the U.S. Census Bureau reported that the US population growth rate had reached an 80-year low of 0.62 percent in 2018. Our annual growth rate has been decreasing in the US since 1993, and the current year’s rate is at its lowest since 1937, a result of declines in the number of births and an increase in deaths due to an aging population and other health factors.
One of the great historical strengths of the U.S. economy, especially compared to Europe and Japan, has been a relatively high birth rate, which kept our average population young and our population growth robust. A perfect example is the post-WWII influx of soldiers whose young and growing families needed everything from houses to diapers and kept businesses and our economy humming. For our population to remain stable, there should be 2.1 babies born to every woman in the U.S. over their lifetime. This factor, known as the Total Fertility Rate, fell to 1.76 in 2017 in the U.S. As fewer women have children, the percentage of our population that is elderly grows, and there are fewer women of childbearing age, which accelerates the effect. The U.S. population over age 65 now exceeds the number under age 15.
Why does it matter?
Low birthrates can have a ripple effect that disrupts our economy as the country’s population ages out of the workforce.
- Businesses may struggle with the ability to fill jobs with qualified applicants. This can be offset by workers who remain in their jobs past traditional retirement ages, but some jobs require training and skills that are better matched by younger employees.
- Fewer people to fill jobs slows the growth rate of companies who need to add new workers at a faster pace to meet demand. Last September, the unemployment rate fell to 3.7%, the lowest level since 1969.
- Wages may increase faster than businesses can afford. At my recent CEO Roundtable group meeting a member of our group shared his frustration with his search for a plant manager. He was receiving repeat applications from people who had applied for another position a year earlier, but now their current salaries were 15-30% higher than before. At another company, an executive-level employee had been recruited away by a publicly-traded company with an incredible offer of two times their current salary after only six months on the job.
- Fewer births combined with an aging Baby Boomer population means fewer individuals in the workforce to contribute to government programs in the form of Social Security and other services that are supported by taxes on earnings and income.
- A larger elderly population means fewer people to provide services for those who can no longer do things for themselves. Health care service workers in retirement communities and hospitals, lawncare, housecleaning and other services that are needed by people who want to remain in their own homes for as long as they live become more difficult to fill.
In the Brookings report, the author pointed out that with our slowing growth rate, immigration will be ‘an ever-more-important contributor to national population growth and will be the primary contributor to national population growth after 2030 as natural increase (births minus deaths) continues to decline.’ But only if we allow it.
On January 3, the Wall Street Journal reported the Labor Department received nearly 100,000 temporary worker visa requests in the first five minutes of New Year’s Day, causing the online submissions portal to crash. Landscaping companies, restaurants, hotels, farms and other businesses use the H-2B program to help fill seasonal openings for the spring and summer. The site was down for several days and as of last week the site was still having issues. These people are not being permitted to immigrate – just work here on a temporary basis to help businesses that have labor shortages during their peak seasons.
Forbes and Inc. magazine recently outlined limitations and changes that are being made to the H-1B visa application and processing that are expected to reduce the number of international students who can be offered jobs in the U.S., primarily affecting technology companies and other organizations looking for college graduates with advanced degrees in science, technology and engineering.
How many times a day do you “Google” to find an answer? You can thank Sergey Brin, a Russian immigrant who cofounded the company while he was a PhD student at Stanford, and Sundar Pichai, the current Google CEO who immigrated from India. As you watch a YouTube video you can thank immigrants Steve Chen from Taiwan and Jawed Karim from East Germany who built it. Whatsapp and Yahoo! were founded by Ukrainian and Taiwanese immigrants, while Apple’s Steve Jobs biological father was Abdulfattah Jandali, a Syrian immigrant.
Immigration is an emotionally charged issue for many people who feel it has had a more negative than positive impact on our country. I grew up with many people who feel that way, and I understand.
The U.S. faces challenges we need to face if we want to remain an international leader, not the least of which is the erosion of our work force due to demographic changes. Immigration can be a positive solution if we are willing to set aside the emotional rhetoric and address immigration’s complexities with the seriousness it deserves.