Immigration Reform and Economic Growth in the U.S.
North America stands as a significant trading block, largely due to the seamless integration of people and goods across borders. Meanwhile, China is broadening its economic influence globally, which makes it essential for the U.S. to adopt comprehensive immigration reforms to stay competitive.
The United States is grappling with a demographic crisis. Simply put, Americans aren’t having enough children to replace those who are retiring. With life expectancy increasing and millions of baby boomers reaching retirement age, we’re facing a notable labor shortage that hinders economic progress.
For the past six decades, most of America’s population growth has come from rising birth rates, but these have dipped below what’s necessary to sustain growth. If we don’t bring in immigrants, our population—and the labor pool—will continue to decline.
Critical sectors like construction, agriculture, and manufacturing depend on low-skilled labor, yet very few Americans are willing to take these jobs. The economy requires around 600,000 to 650,000 low-skilled workers annually to thrive. Sadly, as the workforce becomes more educated, fewer individuals are available to fill these roles.
Achieving the growth rate of 3% that was a goal during the Trump administration hinges on having a sufficient number of workers to produce necessary goods and services. A reduced workforce leads to lower production levels.
Interestingly, the Trump administration’s approach seems to push for fewer immigrants and children. Research indicates that increasing immigration could help alleviate this labor crisis in several ways.
In 2022, foreign-born women contributed significantly to birth rates in the U.S., having 30% more children than their American-born counterparts, which somewhat countered the fertility decline. Plus, immigrants tend to be of working age, while a larger portion of native-born Americans consists of seniors and children. This demographic shift has accounted for nearly half of the labor force growth in the last decade.
Immigration leads to a larger working population relative to the total population, which can help offset rising costs associated with Medicare and Social Security tied to an aging population and substantial budget deficits.
Moreover, immigrants not only fill existing job vacancies, but they also create new jobs. Some of the founders behind the renowned “magnificent seven” tech companies are immigrants. In fact, over 45% of Fortune 500 companies are started by immigrants or their descendants, generating revenues that surpass GDPs in countries like Germany, Japan, and India. These enterprises contribute to tax revenues, create jobs, and bolster the economy.
Despite clear economic advantages, there are concerns that immigrants might take jobs from Americans or exacerbate crime levels. However, statistics show otherwise. States like Texas and Florida, which have high rates of immigration, report lower unemployment than states like New York and California. Regarding crime, immigrants tend to have lower crime and incarceration rates compared to American citizens.
Many immigrants come seeking economic opportunities and the chance to achieve the American dream. Without reforms in immigration policy, we will continue to struggle with workforce shortages and miss out on the entrepreneurial spirit needed for economic expansion.
Reforming the H-1B visa program for high-tech workers is crucial, especially as it regularly exceeds the cap for advanced-degree workers. There’s also a need for thoughtful revisions to seasonal worker programs, like the Bracero Program 2.0 Act introduced by Rep. Monica De La Cruz of Texas, aimed at revitalizing the agricultural sector through improvements to the H-2A visa program.
While some skeptics might dismiss the realities of legal immigration, it’s clear that public sentiment is supportive—79% of Americans believe immigration benefits the country.
Historically, immigration has been integral to the American economy. By enhancing our workforce through thoughtful immigration reforms, the U.S. can maintain its competitive edge on a global scale. The future of America, it seems, depends on welcoming legal immigration.
