The Congressional Budget Office recently released a report on immigration. Immigration is reshaping the US labor force, and slowly, the US population. It also facilitates the trend toward regionalization, where countries coalesce to form larger societies.
Since 2020, a net influx of 9 million immigrants have come into America. About 30%, 2.6 million, came legally; the other 6.5 million came illegally. Venezuela contributed the most (14%), followed by Mexico (13%), then Honduras (8.5%). The most common destinations are Florida, Texas, California, New York, and New Jersey. The most common jobs are construction worker, maids and house cleaners, then cooks. The immigrants are young, less educated, but more available to work than the native US population. Roughly 78% are 16 and 64, compared to 60% of US-born Americans. Immigrants are half as likely to have a high school diploma than their US counterparts. While roughly 5% of working-age Americans are unable to work, less than 1% of new immigrants are unable to work. With immigration, the US population growth is 1.2% per year; without it, the growth would be 0.2% per year. The US unemployment rate is unaffected by immigration because the unemployment of new immigrants is offset by the increased economy that veteran immigrants generate. And while most models show immigration slightly depresses wage growth for US workers with a high school education or less, it slightly boosts wage growth for other American workers due to the economic growth it generates. The influx of migrants can be taxing on local and state governments, which spend more on education, health care, and housing than they receive in tax revenue from the new population. However, over a lifetime, the typical immigrant will end up paying much more in taxes than s/he consumes in benefits.
Immigration is good for the American economy. Notwithstanding, it needs to be managed, with proper controls at the border. In the long-term, the border will become more porous legally (as Europe’s have) because technology will increase in the volume and velocity of exchange across borders. Regionalization occurs when new infrastructure is developed to support the increased cross-border exchange.
Regionalization will be facilitated by the demographic shift. Due to immigration from other North American countries, generational ties within the continent will strengthen over time as ancestral ties to Europe weaken. This will make the US population more receptive to the idea of a closer working relationship, and even shared infrastructure with our neighbors. This will take decades to play-out, however.
Source:
Paul Kiernan, “How Immigration Remade the US Labor Force,” Wall Street Journal, 4 September 2024; accessed from https://www.wsj.com/economy/how-immigration-remade-the-u-s-labor-force-716c18ee
Michael Dorgan, “Surge of Foreign-born Workers Remake American Jobs Market,” Fox Business, access from https://www.foxbusiness.com/economy/surge-foreign-born-workers-remake-american-jobs-market
Pia M Orrenius, Madeline Zavodny, Stephanie Gullo, “How Does Immigration Fit into the Future of the US Labor Market?,” Federal Reserve Bank of Dallas, March 2020, accessed from https://www.dallasfed.org/-/media/documents/research/papers/2020/wp2005.pdf
Photo: Congressional Budget Office
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