Sep 17, 2020 - Economy

America's cities are facing an immigration deficit

An illustration of a hand putting a velvet rope in front of New York.

Illustration: Sarah Grillo/Axios

America's cities are facing a historic shortage of two vital resources: money and immigrants.

Why it matters: Cities drive American economic growth, and immigrants drive cities. The coronavirus pandemic has effectively stanched the main source of talent that municipal economies have long relied upon.

The big picture: As Axios' Stef Kight reports, COVID-19 has slammed the door on highly skilled foreign workers — and the restrictions and bottlenecks may outlast the pandemic, especially if President Trump wins reelection. Economists warn that could slow the U.S. recovery and reduce competitiveness.

  • By the numbers: The U.S. issued more than 61,000 skilled visas in January. That number fell to just 494 in April and remained very low through July. Don't expect the numbers to pick up meaningfully anytime soon.
  • New York alone has some 3.1 million immigrants, who fill 45% of the city's jobs, according to the Mayor's Office for Immigrant Affairs. But that population was declining even pre-pandemic. Tougher immigration restrictions caused a decline of 75,000 immigrant residents in 2018.
  • Immigrants contribute $232 billion to New York City's GDP and own more than half of its businesses.

Context: As I wrote today for Axios Cities, New York's recovery from the current crisis is going to be based on an influx of not-wealthy creatives and young professionals replacing the older, richer, more established people moving out.

  • If the newcomers require less space per person than the people leaving, then so long as landlords don't leave apartments empty, the population will rise and the city will rebound.
  • The catch: Historically, newcomers to New York and other cities have come from abroad. With intra-American migration slowing, it's not clear where else the reinforcements will come from.
Data: U.S. Census Bureau via New York City Department of City Planning; Chart: Andrew Witherspoon/Axios

New York's boom years, at the beginning of two successive centuries, coincided with its peak levels of immigration. Today, about 60% of New Yorkers live in a household with at least one immigrant.

  • New York's 1970s nadir occurred when immigration to the city was at all-time lows.

The bottom line: I reviewed Matthew Yglesias' new book, "One Billion Americans," last week. While its titular goal is utterly unrealistic, it's also directionally correct.

  • The U.S. needs a lot of immigration if it's to achieve its potential and thrive in the coming century. At the moment, thanks to the pandemic, the prospects for such immigration have never been grimmer.
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