Just yesterday this blog published a lengthy post about how the problems in the U.S. asylum system were promoting increases in U.S. immigration that were benefiting the U.S. economy.[1]
Now the New York Times has published a lengthy article focusing on the positive impact of new immigrants to this country with its declining and aging population.[2]
The Example of the State of Maine
The State of Maine has the oldest population in the U.S. with a median age of 45.1. Its “native-born employees either leave the work force or barrel toward retirement.” This especially presents a problem for the State’s annual $1 billion business of catching, cleaning and selling the lobsters off its Atlantic coast. As Ben Conniff, a founder of the State’s lobster processing plant (Luke’s Lobster), put it, “Folks in Maine are generally not looking for manufacturing work, especially in food manufacturing.”
In response, the founders of this company started Lift All Boats “to supplement and diversify the fast-aging lobster fishing industry. It aims to teach minorities and other industry outsiders how to lobster and how to work their way through the extensive and complex licensing process, and about half of the participants have been foreign-born.” And Maine’s state legislators are creating an Office of New Americans to attract and integrate immigrants into the work force.”
The Rest of the U.S.
“Nationally, even with the barriers that prevent some immigrants from being hired, the huge recent inflow has been helping to bolster job growth and speed up the economy. . . . The new supply of immigrants has allowed employers to hire at a rapid pace without overheating the labor market. And with more people earning and spending money, the economy has been insulated against the slowdown and even recession that many economists once saw as all but inevitable as the Federal Reserve raised interest rates in 2022 and 2023.”
“Ernie Tedeschi, a research scholar at Yale Law School, estimates that the labor force would have decreased by about 1.2 million people without immigration from 2019 to the end of 2023 because of population aging, but that immigration has instead allowed it to grow by two million.” In the longer run, “economists think the immigration wave could also improve America’s labor force demographics . . . even as the native-born population ages, with a greater share of the population in retirement with each year.”
“In fact, immigration is poised to become increasingly critical to America’s demographics. By 2042, the Congressional Budget Office estimates, all American population growth will be due to immigration, as deaths cancel out births among native-born people. And largely because immigration has picked up so much, the C.B.O. thinks that the U.S. adult population will be 7.4 million people larger in 2033 than it had previously expected.”
“Immigration could help reduce the federal deficit by boosting growth and increasing the working-age tax base.”
However, “nobody knows how long today’s big immigration flows will last. Many are spurred by geopolitical instability, including economic crisis and crime in Venezuela, violence in Congo, and humanitarian crises across other parts of Africa and the Middle East.” This, as we in the U.S. know, has sparked a lot of political unrest over this development.
Nor does anyone know about the future course of the U.S. economy. If it slows, “fewer immigrants might want to come to the United States, and those who did might struggle to find work . . . [and] compete against American workers for jobs, particularly those with lower skill levels.” However, “recent economic research has suggested that immigrants mostly compete with one another for work, since they tend to work in different roles from those of native-born Americans.”
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[1] Problems in U.S. Asylum System Help Promote Increases in U.S. Immigration, dwkcommentaries.com (April 11, 2024).
[2] Smialek, Immigrants in Maine Are Filling a Labor Gap. It May Be a Prelude for the U.S., N.Y. Times (April 12.2024).
COMMENT: President and CEO of the Federal Reserve Bank of Minneapolis Concurs in U.S. Need for Immigrants
Neel Kashkari, the President and CEO of the Federal Reserve Bank of Minneapolis and the son of immigrants from India, concurs in the U.S. need for immigrants with this statement: “Robust immigration levels are vital to growing the American economy.” It does so because it leads to a larger population, which “means more workers to produce things and more consumers to buy things.”
Moreover, “[I]ncreasing immigration levels is the most reliable way [to achieve] faster growth without further ballooning our national debt.” It also does so more reliably than increased productivity.
While there is global competition for talented immigrants to develop new technologies and lower-skilled individuals to support agriculture, the U.S. has succeeded in this international competition because of its “welcoming culture and strong job prospects.” This is a “competitive advantage” that should be used “to win the immigration competition and accerate growth.”
This has been a consistent theme for Kashkari. For example, at a Novermber 2022, Minnesota Chamber of Commerce luncheon, he talked about the difficulty that large and small businesses were having during COVID-19 of finding workers and noted, “Immigration has been a vital source of workers in our economy, both low-skill workers and high-skill workers.That has really dried up in the pandemic, and we’ve got to address that if we really want our economy to be competitive going forward.”
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Kashkari, Immigration Is Practically a Free Lunch for America (Jan. 18, 2018).
See also Niepow, Kashkari: To Remain Competitive, Minnesota Needs More People, Twin Cities Business (Nov. 21, 2022), https://tcbmag.com/kashkari-to-remain-competitive-minnesota-needs-more-people/
Lower immigration slows growth, warns Minneapolis Fed president, Central Banking (Aug. 8, 2017). https://www.centralbanking.com/global/us/3280576/lower-immigration-slows-growth-warns-minneapolis-fed-president