The U.S. has a people problem. The birth rate has been sliding for years, and it’s about to translate into a shrinking labor force. By 2040, according to a study out this week, America could have more than six million fewer working-age people than in 2022. The only way to counter the domestic trend is by attracting workers from abroad.
“The working-age U.S. population has peaked absent additional immigration,” writes Madeline Zavodny, in a forthcoming paper from the National Foundation for American Policy. “New international migrants are the only potential source of growth in the U.S. working-age population over the remainder of the next two decades.” Ms. Zavodny is an economics professor at the University of North Florida, and her analysis is based on data from the Census Bureau and Bureau of Labor Statistics.
At a time when some Americans view foreign workers as cheap competition, she offers a prescription for growth and vigor. In particular she notes that, although foreign-born workers accounted for nearly half the gain in U.S. employment from January 2021 through May 2023, “employment among prime-aged U.S.-born workers also soared during this period.”
Unemployment has been historically low, she adds, and difficulty of finding good workers will increase if the pool of working-age people shrinks.
The domestic trend lines aren’t good, for two big reasons. The declining birthrate is one. The other is Baby Boomers are both living longer and aging out of the work force. Anyone who imagines that a shrinking population is pleasant should spend some time in Japan and Italy. As these countries are finding, decline means fewer people to produce goods and services, as well as less innovation. Even China’s Communists now admit that owing to their pursuit of a one-child policy, they now face, as Milton Friedman predicted, a huge worker shortage that will challenge economic growth.
So far the U.S. has been able to compensate via immigration, which was “the sole source of growth in the U.S. working-age population in 2021 and 2022,” Ms. Zavodny says. But this isn’t guaranteed. She suggests a future of competition among countries hit by the double whammy of a declining birth rate and aging society. Canada recently rolled out a new work permit to lure away foreigners in the U.S. on high-skill H-1B visas. The target of 10,000 applicants was met in two days.
Amid Donald Trump ’s talk about a wall and Joe Biden ’s chaos at the southern border, it’s hard to imagine any solutions from Congress before 2025. But Ms. Zavodny identifies labor-force trends that will have damaging consequences if they aren’t addressed. Someone needs to make the case that admitting foreign workers is good for Americans.
The Wall Street Journal
