Arturo Castellanos Canales
Introduction
In 2024, the United States continues to face significant demographic challenges. Propelled by falling birth rates, the U.S. population is rapidly aging and steadily declining. In turn, the country is experiencing economic and social pressures caused by labor shortages. Fortunately for the United States, the regular influx of working-age immigrants has helped the U.S. slightly alleviate this challenge. However, the country must increase its annual immigration levels to reach its full potential.
In “Room to Grow,” a 2021 white paper, the National Immigration Forum proposed a methodology that showed that the country needed a 37% increase in net immigration levels over those projected for fiscal year 2020 (approximately 370,000 additional immigrants a year) to prevent the U.S. from falling into demographic deficit and socioeconomic decline.
U.S. Population Growth Remains Sluggish After COVID-19
In 2021, as the world began to emerge from the COVID-19 pandemic, the U.S. population registered its lowest growth in its history – it only grew 0.1%. In 2022, the population growth in the country slightly accelerated to 0.4%, with immigration representing 81% of that growth. Among the many factors contributing to continuing slow population growth, the most glaring is that the United States fertility rate has declined to 1.8 children per woman, below the replacement level fertility of 2.1. Consequently, if all things remain equal, the United States population is expected to reach a high of nearly 370 million in 2080 before declining to 366 million in 2100.
This could be potentially catastrophic for the economic, social, and national security needs of the United States. Another increasingly worrying factor is the fast pace at which the U.S. population is aging. The percentage of people over 65 in the country grew from 13% in 2011 to 17% in 2023. The retired people in this group represent 58% of the 65-69 population and 76% of people aged 70-74.
Impacts of Low Population Growth
As highlighted in Room to Grow, the aging U.S. population creates demographic strains, impacting workforce needs and maintaining funding streams for popular retirement programs like Social Security, primarily funded by those remaining in the workforce.
These trends continued in the years following the release of Room to Grow in 2021 and were exacerbated by the pandemic. Due to the slow population growth and rapidly aging population, many U.S. economic sectors are currently facing acute labor shortages. Unemployment rates in the country are reaching record lows. The national unemployment rate in December 2023 was 3.7%. But in Maryland and North Dakota, for instance, unemployment has fallen below 2% for many months. Right now, the U.S. only has 6 workers for every 9 available jobs every month, and according to the U.S. Chamber of Commerce, the country is “missing” 1.7 million workers compared to February 2020.
These labor shortages – and their economic consequences – are expected to get worse in the next decades. As explained in Room to Grow, the Social Security will continue to face challenges unless and until the United States tackles its demographic shortfalls by increasing immigration levels. In addition, shrinking local tax bases could devastate local communities, impacting their capacity to provide basic infrastructure and adequate job opportunities to their residents.
Immigration Remains an Opportunity for the U.S. Economy and Workforce
Fortunately, the United States – the largest recipient of immigrants in the world – has a robust immigration pipeline capable of maintaining steady population growth. According to the U.S. Census Bureau, there are 335 million people in the country, of which 45 million (or 14%) are foreign-born. In some states, the percentage of immigrants is considerably higher compared to the national average, like California (26.5%), New Jersey (23.2%), New York (22.6%), and Florida (21.1%).
Notably, 77% of the approximately 45 million immigrants in the United States are of working age (18 to 64 years) – a much higher figure than the 59% of those born in the U.S Even though immigrants represent only 14% of the U.S. population, they constitute 17% (around 29 million people) of the labor force. And their percentage is even more significant in critical sectors of the U.S. economy. Immigrants represent around 73% of all agricultural workers, over 30% of construction workers, 25% of STEM (science, technology, engineering and mathematics) workers, and 28% of all highly skilled healthcare professionals—such as physicians and surgeons.
In the coming years, the U.S.’s aging population stands to benefit from immigration in another way. In addition to addressing the U.S.’s population decline, foreign-born workers are critical to care for its increasingly aging population. Immigrants account for 25% of personal care aides and 38% of home health aides, projected to be one of the fastest-growing occupations in coming years.
That said, as the Forum noted in “Room to Grow,” the U.S. economy needs higher immigration levels to combat an aging population. Specifically, Room to Grow projected that the United States needed, at least, a 37% increase in net immigration levels over those projected for fiscal year 2020 — approximately 370,000 additional immigrants a year. The urgent increase of net immigration levels would help prevent the U.S. from continue falling into demographic deficit and socioeconomic decline.
While demographics will pose increasing challenges to the United States over the next several decades – especially without an increase in legal immigration, the country has the potential to tackle this problem through increased immigration levels. In 2022, the U.S. had a positive net immigration rate of 2.748 per 1000 population. Despite elevated levels of migration at the U.S. southern border, the population of immigrants in the United States in percentage terms is still below the historic highs of the first decades of the 20th century, where around 14.7% of the population was foreign-born. And immigration levels in recent years are below projections from last decade, as Covid-19 and a series of immigration restrictions across presidential administrations have led to the overall immigrant population being 2 million below Census projections from 2017.
Conclusion
As explained in Room to Grow, the United States must increase its immigration levels. Bringing in more working-age immigrants would help build a more robust and resilient economy capable of tackling the current demographic challenges. Proposals to increase overall immigration have often been dismissed as politically untenable. But support for immigration is growing, and the U.S. has the ability and capacity to welcome more people. Three years after the publication of Room to Grow, the demographic challenges continue to deteriorate. Still, the proposed solution remains the same – increasing net immigration levels will allow the United States to reach its full potential.