May 26, 2023 - Economy

Immigrant workforce reaches a new high

Note: Foreign-born describes adults born outside the U.S., where neither parent is a U.S. citizen, and includes legally-admitted immigrants, refugees, temporary residents and undocumented immigrants; Data: Bureau of Labor Statistics; Chart: Axios Visuals

The share of foreign-born workers in the U.S. labor force reached a record high last year, per new data from the Labor Department.

Why it matters: With more Americans aging out of the workforce than entering into it — and at a time of labor shortages — immigrants are playing an increasingly crucial role in the labor market.

State of play: The share of foreign-born people in the workforce has been steadily rising for decades, but dipped during the pandemic — making last year's uptick look a bit more striking than it is, said Abraham Mosisa, a senior economist at the Bureau of Labor Statistics.

  • Still, this is a trend that isn't going anywhere. The U.S. labor force participation rate of native born men has been consistently decreasing, he pointed out. And the rate for women has stagnated.
  • The number of foreign-born workers in the U.S. increased to 29.8 million in 2022, from 27.9 million the previous year — a jump of about 6%.
  • The number of native-born workers went from 133.2 million to 134.5 million — up barely 1%.
  • One key factor is that a bigger share of the immigrant population is of working age (18-64), at 77%, according to the nonpartisan Migration Policy Institute (MPI). That compares with about 59% of the native-born population.

Meanwhile: The relative size of the immigrant population has stayed flat over the past two decades — comprising 13.6% of the total U.S. population in 2021, according to the most recently available data from MPI — just below where it was before the pandemic.

Zoom in: Foreign-born workers tend to take different jobs than the native-born (see the chart below), and they typically earn less money.

  • In 2022, median weekly earnings for foreign-born full-time workers was $945, or 87% of their native-born counterparts.
Share of employment by <span style="background:#6533ff; padding:3px 5px; color:white; border-radius:5px;">foreign-</span> and <span style="background:#00c46b; padding:3px 5px; color:white; border-radius:5px;">native-</span>born workers by industry, 2022
Data: Bureau of Labor Statistics; Chart: Rahul Mukherjee/Axios

Worth noting: Immigration opponents might see the record number of foreign-born workers and argue that foreign born workers are somehow stealing jobs from Americans — but that's not what's happening.

  • Although was a big increase in net immigration in 2022 — essentially catching up from the COVID slump — there were plenty of jobs to go around.
  • At times last year there were actually two jobs available for every job-seeker. And this year, the unemployment rate has continued to hover around a record low.

Zoom out: As wealthier nations contend with shrinking workforces, many are crafting new immigration policies to find more workers — and combat inflation, as the Wall Street Journal reported earlier this month.

  • Policies that encourage immigration "will determine the extent and persistence of labor supply challenges," as a note from Moody's Investors Service pointed out a few weeks ago.
  • Immigration law in the U.S., meanwhile, remains a contentious and fairly intractable political issue.

What they're saying: "If you want a growing workforce, without immigration, that isn't going to happen," said Phillip Connor, a senior demographer at FWD.US, an immigration advocacy group.

Go deeper