Immigrants are rescuing a worker-starved U.S. economy
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Immigrants are joining the U.S. workforce at much higher levels than normal.
- They're likely to account for roughly half a million new jobs over the next three quarters, per a new report from Goldman Sachs.
Why it matters: As the U.S. continues to struggle with a historically-tight labor market, immigrants are coming to the rescue of desperate employers — while also creating new jobs themselves.
By the numbers: Between the pre-pandemic month of January 2020 and July 2023, the immigrant labor force grew by 9.5%. That compares to a tiny 1.5% growth rate among the native-born.
Between the lines: The foreign-born labor force is growing for three main reasons.
- Immigration: The rate at which the U.S. is giving out visas — both temporary work visas and permanent green cards — has risen by about 335,000 workers per year over the past 12 months, to a level near record highs. That's partly because the government has successfully begun to clear the backlog of more than 500,000 visa applications that built up over the course of the pandemic.
- Participation: More of those immigrants are working. The foreign-born labor force participation rate has jumped by 2.3 percentage points to 67% over the past two years. By contrast, the native-born rate has risen by a meagre 0.4 points, to 62.2%.
- Demographics: The great retirement of the Boomer generation is taking place mainly among the native-born — most immigrant workers aren't yet facing retirement. As a result, millions of new native-born workers need to enter the workforce every year just to keep the total native-born labor force constant, let alone growing.
What they're saying: "The foreign-born labor force has made a disproportionate contribution to reducing the jobs-workers gap," writes Goldman economist Tim Krupa.
- In normal times, he calculates, the unemployment rate holds steady when employment grows at about 75,000 workers per month. Thanks to immigrants, however, the U.S. can currently absorb some 125,000 new jobs per month without driving unemployment even lower.
The bottom line: Immigrants: We get the job done.
