In previous cover stories, Southern Business & Development has warned readers about a demographic nightmare in the United States. We are running out of people needed (1) to fill over 7 million available jobs that are currently being filled at very low rates, (2) to replace our aging workforce, and (3) to help pay benefits such as Social Security and Medicare for the next generation.
The 2020 presidential race is now upon us. The issues are wide and deep. Immigration, national debt, gun control, climate change and the crisis on the Southern border are all issues that need to be addressed. Yet, no issue in my opinion is more important than the one that no one is talking about; the fact that the nation’s population is not growing and workers are aging out of the workforce (retiring) at the rate of 10,000 a day. The birthrate in 2018 was the lowest in the nation’s history, or since birthrates were first tallied.
Governments cannot force women of child bearing age to have more children. The government can encourage higher birthrates with tax credits. The Child Tax Credit in 2019 is worth up to $2,000 per qualifying child and $500 per qualifying dependent. Make that $10,000 per qualifying child and it just might make a difference because so many 20- to 40-year-olds do not believe they can afford a child. Or, maybe they believe they can afford to have just one child because of different issues, one of which could be overwhelming student debt.
Why are low birthrates such a concern? The ramifications are huge. For one, the economy cannot grow at healthy rates when workers cannot be replaced. We have the largest generation in this nation’s history aging out of the workforce and at the same time we are experiencing the lowest birthrates ever. It is this nation’s biggest economic issue and it will only get worse before it gets better.
To give you a numerical comparison of the demographic crisis we are experiencing, here is the data: This year, approximately 310,000 Baby Boomers (born between 1946 and 1964) will retire each month. However, on average, about 70,000 people are turning working age (16) per month in 2019. That figure is projected to drop to around 50,000 people turning working age per month by 2028. That means, on average, 240,000 jobs must be replaced each month and we are nowhere near that number in available workers. That also means the various levels of governments are losing 240,000 tax-paying workers each month, which is not sustainable.
Why is it not sustainable? Benefits such as Social Security are paid generationally, which we have written about numerous times. My taxes are paying for my parents’ Social Security and other benefits. My kids will pay for my benefits through their payroll withholdings. If we are losing 2.8 million people from payrolls each year in the U.S., birthrates are at all-time lows and 10,000 Baby Boomers are retiring each day, how will our benefits, which we have paid for, be sustained? The sad answer is they cannot be sustained unless the federal government steps in with some really effective initiatives, like increasing immigration of working age individuals from 1 million a year to 3 million a year.
A growing labor force is critical for generating tax revenues that fund vital programs such as Social Security and Medicare. Social Security is currently $80 billion in the red. If the workforce continues to shrink, that negative cash flow in benefit programs will only grow higher.
The U.S. is not alone in experiencing a shrinking workforce. Over half of countries in the world have fertility rates below worker replacement and some of the countries with the lowest fertility rates are the ones most opposed to immigration, including the U.S. and Japan. China, Japan and many countries in the European Union are watching their labor force decline in numbers as they have their own versions of the Baby Boomer generation aging out. Even Vietnam, which has seen a surge of employment activity since the U.S. imposed tariffs on China, has now realized it is out of workers. So have companies that are fleeing China to avoid Trump’s tariffs. They have found that much of Asia does not have the appropriate infrastructure and labor shed for their manufacturing needs.
For those countries, including the U.S., immigration will be fundamental in mitigating demographic headwinds. There are 962 million people in the world today over 60 years old. A study by Citi predicts there will be over 2 billion people over 60 in 2050. That is more than 25 percent of the world’s population that is at or near social services age. The world has never before seen a stat like that.
Immigrants may be exactly what the U.S. needs when it comes to replacing its workforce. About 75 percent of migrants are of working age (16-64). That’s compared to 57 percent of the global population, and 64 percent of the U.S. population, being of working age. And in the U.S., the youngest Baby Boomer is 55 years old.
Now, you might say to yourself that automation (robotics) can overcome this demographic crisis caused by an aging workforce and a low birthrate. Yes, that is already happening. In August, Amazon unveiled plans to retrain a third of its U.S. workforce by 2025 to assist its employees moving into more advanced jobs or finding new careers. Most of the training will involve high-skilled work with robots and other aspects of automation. But what about the taxes paid by these workers that are being replaced by robots? What is the answer there? Governments will have to tax robots. There is no other answer. Workers pay local and state taxes. As of now, robots that replace tax-paying workers do not.
Exacerbating the demographic crisis is the fact that, according to the 2018 Retirement Confidence Survey by the Employee Benefit Research Institute, 45 percent of American workers have less than $25,000 in savings for retirement. That is not enough to cover one year’s expenses. One way or another, the federal government will be on the hook for that.
So, how to grow our nation’s shrinking workforce? There are three choices. (1) As mentioned, we can subsidize fertility. (2) We can accept slower growth. (3) We can increase legal immigration to fill those 7 million jobs that are available and to increase payrolls so that our benefit structure can be sustained. It is that simple. It’s math.
Currently, however, we are doing the exact opposite. President Trump’s immigration rule announced in August (without the approval of Congress) would deny green cards to people who are likely to rely on some form of public assistance such as housing or food stamps. The order marks a major departure from decades of U.S. immigration policy that provides public assistance as a way to get a person or family started in this country. Historically, many immigrants have come to the U.S. with very little means, and the nation for over 100 years favored family reunification.
“Give me your tired and your poor who can stand on their own two feet and who will not become a public charge,” said Ken Cuccinelli, Trump’s top immigration official, in an interview in August. If they are “poor,” how can they “stand on their own two feet” at least in the first year of immigrating here?
They will undoubtedly find a job; there are 7 million jobs available with few takers each month. In August, only 130,000 jobs were created. Assisting immigrants when they arrive, even if it’s for just one year, will fill more jobs. And since they will have no problem finding a job, they will be on the tax rolls supporting the rest of the population. So denying green cards for those who need public assistance, at least at first arrival in the U.S., is denying much needed workers and tax payers.
In his 2019 State of the Union address, President Trump said, “Legal immigrants enrich our nation and strengthen our society in countless ways. I want people to come into our country in the largest numbers ever, but they have to come in legally.” Since that statement in February, President Trump’s orders have made legally immigrating to this country much more difficult.
The state of immigration today in the United States
There are approximately 45 million immigrants in the U.S., according to census records, not counting their U.S.-born children. Of those, about 11 million are unauthorized immigrants, meaning about 75 percent are documented immigrants and their children. One in seven U.S. residents is foreign born. Mexicans account for approximately 25 percent of immigrants in the country. Indians and Chinese (including immigrants from Hong Kong) are the next largest groups at about 6 percent each. Filipinos are at about 5 percent with El Salvador, Vietnam, Cuba and the Dominican Republic all at about 3 percent each. South Korea and Guatemala round out the top 10 sources of immigrants in the U.S. with 2 percent each. These numbers are in stark contrast with 1960 when Italians made up 13 percent of our immigrants, followed by Germans and Canadians at about 10 percent each.
Immigrants from Mexico dominated inflows post-1970, but that changed during and after the recession of 2007-2009. Today, immigrants are more likely to come from Asia, specifically from India and China. There are today approximately 90 million immigrants and their U.S.-born children residing in the U.S. according to the 2018 Current Population Survey (CPS). That represents about 28 percent of the U.S. population.
In 2017 (latest figures available), 31 percent of the 39 million immigrants age 25 and older had a bachelor’s degree or higher. That is about the same percentage of degrees as U.S.-born adults. Of note, in the last five years, the number of college-educated immigrants entering the U.S. has risen to 47 percent.
President Trump has suggested that a merit-based system be used in the immigration process, which would allow about 1 million legal immigrants into the country each year. But, the U.S. already has a merit-based immigration system. Since 2000, a little over 2 million H-1B visas have been distributed, according to the Pew Research Center, or about 106,000 granted per year on average.
The H-1B visa program is the primary way that companies in the U.S. hire highly skilled foreign workers. The H-1B visas are awarded to employers who apply on a first-come, first-served basis, with applications accepted each year beginning in April. The program allows employers to hire foreigners to work on a temporary basis in jobs that require specialized knowledge. Not all H-1B applicants have college degrees, but most do.
President Trump signed an executive order tightening restrictions on H-1B for skilled immigrants. He has pushed for a merit-based immigration system, and his administration has proposed cutting public benefits to legal immigrants. The problem is H-1B visas are a merit-based immigration tool. Cutting those visas ultimately does the opposite of what we as a nation need to do to replace our retiring workers.
For the past five years, H-1B visa applications have exceeded supply, and employers have encouraged the last two administrations to increase the caps on the program. Based on the fact that we cannot replace the 250,000 workers per month who are retiring, one way to fill that gap is to increase H-1B visas. Congress sets the cap each year, and it has seen a low cap of 65,000 in fiscal 1990 to a high of 195,000 in 2002 and 2003.
With about 1 million immigrants allowed in this country per year, and with more than 2 million jobs that need to be replaced each year, if Congress wanted to fill the gap in the workforce today through H-1B visas, we would need to increase the annual cap by about 10 times what it is today. . .or even higher if you take into account the immigrants that will not be allowed in the country now that President Trump wants to deny green cards to people who are likely to rely on some kind of public assistance. Again, we have 7 million jobs available and few takers. Imagine what our economy would be like if we could fill those 7 million jobs.
Immigration’s effect on the U.S. economy
There are over 27 million foreign-born workers ages 16 and older in the United States. And those are the ones that are accounted for, and therefore paying taxes. Of those 27 million documented foreign-born workers, the largest share (33 percent) works in management, professional and related occupations. Twenty-three percent (the second largest share) work in services such as retail. Another 16 percent work in sales, 15 percent in production, transportation and material moving and 12 percent work in natural resources, construction and maintenance.
According to Census, about 8 million undocumented immigrants are participating in the workforce. At 75 percent, that is a much higher worker participation rate among the undocumented than from the U.S.-born, which stands at about 64 percent.
Most of the undocumented immigrants work in farming and construction. More than 44 percent of farm jobs in the U.S. are held by illegal immigrants. And it is estimated by the Bureau of Labor Statistics that 47 percent of construction workers in Texas are undocumented immigrants. Of course, no state in the South has an economic effect like Texas. It is the largest state economy in the South by far and the second largest economy in the nation. If you eliminated the undocumented workforce in Texas’ construction industry, very little would be built, including a wall on the state’s southern border.
According to the Bureau of Labor Statistics, two-thirds of the economic growth in the U.S. since the end of the recession has been driven by immigrants. Overall, immigrants have founded 30 percent of U.S. firms, and more than 50 percent of startups valued at over $1 billion were founded by immigrants.
The current administration keeps claiming that undocumented, illegal immigrants drain public resources. While nearly 70 percent of undocumented immigrants pay taxes, they cannot use those benefits. Those individuals are paying FICA, but cannot claim Social Security or Medicare.
According to the Department of Homeland Security, 15.5 percent of undocumented immigrants use Medicaid as a benefit. That figure is similar to the 16.1 percent of U.S.-born who receive Medicaid benefits. According to DHS, 9.1 percent of undocumented immigrants use food stamps. As for the U.S.-born, 11.6 percent use food stamps. Many undocumented immigrants receive benefits because they live in households with eligible Americans. The use of welfare is almost non-existent in the undocumented immigrant population here in the U.S. It is less than 1 percent. So, less than 1 percent of undocumented immigrants on welfare clearly indicates that they do not drain public resources.
As mentioned, most immigrants pay taxes and contribute to Social Security and Medicare. This improves the age dependency ratio, or the number of people who support the nation’s senior population. The age dependency ratio is worsening because of the nation’s low birth rate and the fact that so many are retiring. As more immigrants go on payrolls, the age dependency ratio improves. It is estimated that the 11 million undocumented immigrants in the U.S. pay $11.6 billion a year in state, local, federal, sales and excise taxes according to the Institute on Taxation & Economic Policy.
As for legal immigrants, they are critical to the nation’s economy, especially the South’s economy. Even while being targeted by divisive political rhetoric, immigrants — both legal and illegal —
have represented 53.9 percent of the growth of the labor force. Their native-born counterparts have grown the labor force by 11.8 percent in the last 10 years.
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Immigrants only make up 17 percent of the nation’s workforce; however, legal immigrants represent an important role in highly skilled occupations such as math-related jobs and computer programming, according to a recent report by Goldman Sachs. More than half of U.S. Nobel Prize winners over the past five years are immigrants, and the foreign-born have founded 44 percent of Fortune 500 companies. Furthermore, about 50 percent of doctoral degrees in math and 58 percent in IT and engineering have been earned by foreign-born international students at American universities in the last five years. Also, in Silicon Valley, 64 percent of engineers are foreign-born.
In a story in The Atlantic in 2017, Warren Buffet, one of the richest men in the world, said, “What immigrants have done for this country! The quality of immigrants, the motivation of immigrants, this is what has contributed to the greatness of the country.”
North Texas, including the Dallas-Fort Worth metro, has one of the largest immigrant populations in the country. A study in 2017 conducted by the U.S. Census Bureau’s American Community Survey showed that immigrants represented 24.4 percent of the entire working age population in North Texas and 29.4 percent of its STEM workforce. That same study found that many more immigrants are of working age compared to U.S.-born. In North Texas, 85.6 percent of immigrants were of working age (16-64) compared to 61.1 percent of naturally born citizens who were of working age. This is a critical statistic in that our biggest labor issue is the dearth of young people in this country and the horde of old people.
Now let’s look at the claim that immigrants take jobs from native-born Americans. Many people carry the belief that upwards of 40 percent of the U.S. population are immigrants, according to a study by Citi and Oxford-Martin. The truth is, 13 percent of the U.S. population is foreign-born.
The truth, also, is that we are at full employment and have been for almost three years. There is no one left to hire — U.S.-born or foreign-born — and that will be verified soon in monthly job reports from the Fed.
Monthly job totals have dropped from about 200,000 since the recession ended to 130,000 on average per month in August of this year, and they will continue to do so. There are people working in this country that don’t even want to work. Just about everyone — the skilled and unskilled —
is working. One cannot say that immigrants take jobs from the U.S. born. . .that is an impossible scenario when there are 7 million jobs that cannot be filled in this country. There are not enough people to fill those jobs, and that’s why we need to take a very close look at increasing immigration in the country at the same time that we implement comprehensive immigration reforms.
The September 2018 study, “Migration and the Economy,” by financial services giant Citi, claims that without migration to the U.S., economic growth in the country would be about 15 percentage points lower than it was post-recession. The report states, “While not quite putting the U.S. in recession, this is enough (with no immigration) to cancel out the majority of post-crisis gains” in the nation’s economy over the past 10 years.
What one country is doing to alleviate labor shortages
While companies in the U.S. keep struggling to find labor — any kind of labor, skilled or unskilled — the situation in Japan is even more dire. The U.S. is essentially out of labor with a 3.7 percent unemployment rate. Japan’s unemployment rate is 2.5 percent, and the Asian economic powerhouse is one of the most immigration-unfriendly nations in the world. U.S. companies are under extraordinary pressure to find workers, but the Japanese are even more so. But unlike the U.S., Japan is doing something about its labor shortages.
Factors that indicate workers cannot be replaced, such as Japan’s low fertility rate and its demographics (27 percent of the country’s residents are age 60 or older), are much worse in Japan. For every 100 job seekers, there are 160 job openings there (in the U.S. there are around 110 job openings for every 100 job seekers).
In 1991, Japan’s lost decade began. It was a 10-year period of economic stagnation following the Japanese asset price bubble’s collapse. But it was also a time when labor constraints began in earnest in the country. In the mid-1990s, lawmakers established Japan’s Technical Intern Training Program. The program recruits workers from neighboring countries such as Vietnam, China, the Philippines, Indonesia and Thailand.
The intern program began slowly in a country that is skeptical of foreign visitors and immigrants. But government leaders had to do something, and today about 300,000 foreign workers are enrolled in Japan’s Technical Intern Training Program.
For the first 27 years of the worker intern program, foreign nationals usually signed three- to five-year contracts with a Japanese-based company. They learned skills that they could then take back to their home country. After five years in the old program, they had to leave Japan.
However, in April of this year, the program was extended for five more years in the country. Foreign nationals who have finished the five-year technical intern program will now be allowed to stay and work for an additional five years in Japan. They may also be able to change their visa status to work longer in the country and invite family members from their home countries to Japan.
Industries in Japan suffering from labor shortages are the same as here in the United States. Three big industry sectors in both countries where labor is just unavailable are farming, construction, and nursing and elderly care. There is no farmer in America who has ever said, “We need less Mexicans.” No, they need more and we are making it as difficult as possible for those Hispanics and Latinos to work our farms.
As both nations’ populations age out of the workforce, nursing and home health aides will be in high demand. Japan is expecting a nursing shortage of 380,000 in 2025. In the U.S., according to the Bureau of Labor Statistics’ Employment Projections 2016-2026, Registered Nursing (RN) is listed among the top occupations in terms of job growth through 2026. The RN workforce is expected to grow from 2.9 million in 2016 to 3.4 million in 2026, an increase of 438,100 or 15 percent.
Now, let’s apply those numbers of growth in nursing and home health aides from 2016 to 2026 to the number of people entering the workforce per year in the U.S. Currently, about 840,000 people are turning working age (16) each year in the U.S. The RN workforce will need 44,000 of those people that enter the workforce each year until 2026. That means that 6 percent of those entering the workforce must become a nurse or home health aide to even fill those jobs.
To alleviate worker shortages here in the U.S. that are only getting worse each year, we could easily adopt an internship program like that of Japan’s that recruits many of the asylum seekers. Instead of incarcerating these people that become a public charge — even though most of them are in for-profit prisons — we can vet them as easily as we can incarcerate them. Then, as opposed to tax payers funding their incarceration, these people can work and pay taxes.
If Japan — one of the most anti-immigration, anti-foreigner nations in the world — can develop a workforce program using working age foreigners to solve their worker replacement dilemma, then the U.S. can do the same. Not only that, if we can temporarily recruit these workers, which at some point must return to their countries with new skills, they will ultimately help their own country’s workforce as well.
The low-skill and high-skill job crisis
This story has attempted to arm readers with facts about the immigrant workforce in the U.S. and its effect on the U.S. economy. It outlines that immigrants are large participants in both low-skill and high-skill jobs. Without immigrants, according to Citi, the economy post-recession would not have grown on average the 2-plus percent it has grown each year since 2010. Despite President Trump’s statement in his 2019 State of the Union address, “Legal immigrants enrich our nation and strengthen our society in countless ways,” his immigration policy has so far reduced the number of people legally coming into the U.S. His policies dropped the number of legal immigrants by about 200,000 to 900,000 in 2018 according to government data. These policies have made it more difficult for employers to recruit foreign workers through H-1B visas. In other words, there are a series of events that have occurred that may give immigrants second thoughts about migrating to the U.S., which will have an even more negative effect on our economy.
Mass deportations, separating children from their parents at the border, mass shootings of immigrants and other minorities (such as the one in El Paso), combined with anti-immigrant rhetoric from this administration may indeed achieve its goal — immigrants may decide to put the U.S. on a secondary list of destinations as they seek a better life for their families at the exact time we need them (demographically) the most.
For years, the message from politicos, educators, economists and economic development leaders has focused on the lack of skills in our workforce. Now, practically everyone that has a skill has a job. While there remains a skills gap, our labor force is so depleted that the concern has now become the body gap. We need bodies. We need more people. Otherwise, the American way of life — such as benefits for retirees — will be a memory simply because we cannot replace our workforce, therefore we cannot adequately fund social benefits. We can’t replace our workforce now to the tune of 240,000 people a month and it will only get worse simply because the federal government will not act on this crisis of diminishing numbers in our workforce.
While the skills gap has been viewed as a crisis, there is also the chance of a crisis in the low-skills labor category. With an aging population, the U.S. will need an army of nursing, psychiatric and home care aides. Immigrants represent a 24 percent share in those that take care of the elderly.
The labor crisis in the construction industry
The one industry sector that is suffering the most from a lack of immigrants, even illegal immigrants, is the construction industry. . .in all states, but especially the construction industry in Texas and Louisiana.
There is no getting around the fact that 47 percent of construction workers in Texas are undocumented immigrants, and nationwide, 47 percent of general construction laborers are Hispanic or Latino, legal or not.
Both single-family and multi-family homebuilders site the current labor shortage crisis as the main cause of rising home prices as well as slower building rates. In specialty building trades, Hispanics and Latinos represent 70 percent of drywall and ceiling tile installers, 55 percent of painters and 56 percent of roofers. It is a major understatement to say that the construction industry is heavily dependent on documented and undocumented Hispanic and Latino workers. We wouldn’t have a construction industry without them. That’s not an opinion and it isn’t a political statement; it is a fact.
In a story published by CNBC.com in July, CEO Toby Bozzuto wrote a letter to his employees of the Maryland-based Bozzuto Group. The company has developed, built and acquired 45,000 dwellings of all types on the East Coast and in Midwestern states. The company has annual construction revenue of $500 million and has 2,500 employees according to its website.
Bozzuto tried to reassure his Hispanic and Latino workers in the letter that his company is committed to them, even in this age of anti-immigrant, inflammatory rhetoric. So, he sent them this letter to them that was published, in part, by CNBC:
“It is not enough to stand by as intolerance of the ‘other’ becomes increasingly normalized.
“It is not enough to stand by and allow divisive rhetoric to define who we are as a country.
“On Lady Liberty’s tablet was the truth. ‘Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore, Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!’ ”
Then he wrote, “Indeed, don’t send them home, send them to us. Send them to Bozzuto where we can show the world what beautiful things can happen when people of diverse opinion, gender, race, sexual orientation and background come together.
“Send them to us,” he said, instead of sending them back.
What does that tell you about the labor situation in this country? It tells you that companies are essentially begging the government to increase immigration, somehow, some way in a sensible manner so they can continue to grow. It is a statement that immigration reform’s time has come in an age of a dearth of labor.
More examples of sparse labor
With the advent of large scale natural gas mining (fracking) in the U.S. over the last decade, the nation has seen an unprecedented increase in petrochemical, natural gas and LNG plant activity. Hundreds of billions have been spent in the last 10 years just in the petrochemical and LNG sectors. In fact, there are several LNG export facilities in Texas and Louisiana being built now or that have been approved. In and around Lake Charles, La. — just one market — over $100 billion has been announced in petrochemical and LNG facilities. Just one LNG export facility can cost upwards of $25 billion with a need of over 10,000 construction workers.
While there have been an unprecedented number of these facilities built, they are slowing slightly in number. But at the height of the construction of so many petrochemical and LNG facilities during a five-year stretch from about 2012 to 2017, many projects were held up for one reason — not enough workers. So workers, whether they are welders or pipefitters, would have to finish one job before another could be started. In other words, billion-dollar projects would be delayed to wait on another billion-dollar project to be completed so those construction workers could move on to the next site.
Dallas County, Texas’ immigrant community
Dallas-Fort Worth is home to one of the largest legal and unauthorized immigrant communities in the nation. Few people realize how important immigrants are to local economies. The New American Economy just released a report on immigration in Dallas County stating that without its immigration population, Dallas County would miss out on thousands of jobs and billions of dollars. Here are some facts from the report on immigration — both legal and unauthorized — in Dallas County.
New American Economy analyzed data from the U.S. Census Bureau’s American Communities Survey from 2012-2017:
- l Immigrants in Dallas County own about 40 percent of the businesses and have $13.4 billion in spending power.
- l Immigrant households — both legal and unauthorized — earned about $17.5 billion from 2012-2017.
- l Immigrants accounted for 50 percent of the population growth in Dallas County from 2012-2017.
- l The Dallas County immigrant community contributed about one-quarter of the county’s gross domestic product.
- New American Economy also looked at Dallas County’s undocumented immigrant population. It found:
- l The unauthorized immigrant population in Dallas County made up 48 percent of the immigrant population.
- l Undocumented immigrants spent $5.3 billion in the county from 2012-2017.
- l Unauthorized immigrants in Dallas County paid $618 million in local, state and federal taxes.
The South: The Outlier in Worker Replacement
While increasing legal immigration is the solution to replacing the workforce nationwide, it is not the only answer in the South and West, two U.S. regions that see net increases in migration from other U.S. regions each year. But it is the only answer to worker replacement in the Midwest and Northeast, as both regions are seeing net decreases in their workforce from migration within the U.S.
According to the Census Bureau’s latest population survey, the Northeast lost 352,000 residents from domestic migration for fiscal year 2017-2018, with New York and New Jersey leading the way. That figure represents the highest net loss of residents in the Northeast since 2004-2005, and today it is estimated that more than 250,000 people will leave the region this year. Most of those people from the Northeast move to metro areas in the South.
In the Midwest, the out-migration isn’t much better. However, the Midwest welcomed far more people from other parts of the country than the Northeast. Last year, the Midwest saw a net loss of just 38,000 people. The Northeast’s situation is dire. Of those that relocated out of the region last year, only 8 percent were age 65 and older, meaning 92 percent of the 352,000 migrating out of the region last year were of working age.
The majority of Northeasterners moved to the 15-state American South. Of the 600,000 that left the Northeast last year on a gross basis, 412,000 moved to the South, with Florida and North Carolina the largest recipients of the migrants. A major spike in migration to the South occurred in fiscal 2017-2018. That year, the South saw a net migration that topped 500,000 people, with about 90 percent of those being working age. That is the largest annual total of migration to the South from other U.S. states since the Census’ Current Population Survey first published in 1980.
Conclusion
We have plenty of issues in this country that need our attention. A top priority should be the fact that our population is not growing, which poses tremendous challenges to not only our workforce, but also employers all across the country.
The Great Recession wiped out nearly 9 million jobs and $19 trillion in wealth from households throughout the United States. Is the lowest fertility rate in the nation’s history a factor of the Great Recession? The worker replacement rate started exactly 10 years ago. That deficit has occurred every year in the last 10 years, so it must be an issue that started during the Great Recession.
In the summer, the U.S. recorded the longest economic expansion in the nation’s history and it continues today. We have now gone more than 10 years without a contraction in the economy. Yet, as employment stabilized and wages rose, fertility did not. In recent history, recoveries tend to boost fertility rates, not reduce them.
The nation today is in new territory demographically. There have been few times in U.S. history (never for 10 consecutive years) when we could not replace our current workforce, and never has there been a time when so many are aging out and retiring. Unless legal immigration is increased three-fold — the only solution to our waning workforce — I guess we will know our fate over the next two decades. We might have a happy ending, but deep down, I believe the situation could result in a broad swath of unfunded social services programs that we, as a nation, have relied on for decades.
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