Hitting the Brakes on Our Economic Demise, or the Opportunity in Immigration

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We had originally planned a blog post on the housing crisis, but another crisis has been suddenly thrust upon our country that I felt the need to write a little about….

My family moved to California in 1981 when California supplanted New York for the first time in the 1980 census as the most ethnically diverse state (1). Immigrants from Asian countries (such as me and my family) comprised the largest share of the newcomer immigrant population then, as we do now, though immigrants from Latin American countries outpaced us in the 90s and 00s. Today, California boasts the largest immigrant population in the nation, home to over 10 million immigrants who are responsible for about one-third of the state’s gross domestic product every year, driving the economic dominance of the state from Silicon Valley to the Central Valley, and beyond (2). Foreign-born residents comprise roughly one-third of the population in several Bay Area counties including San Mateo, San Francisco, and Alameda County (where I currently live). This holds true in  two major So-Cal counties as well, Los Angeles County (where I grew up), and Orange County (where I graduated college). And just like my daughter, half of all California’s children have at least one immigrant parent (3).

 Image credit: http://www.ppic.org/publication/immigrants-in-california/

Image credit: http://www.ppic.org/publication/immigrants-in-california/

While California has enjoyed robust population growth from immigration through the 1990s, net immigration has slowed dramatically. In the 1990s, the immigrant population in the state grew by 37%, but in the past 10 years, that has dwindled to only 8% (4). This decline is significant, particularly when we consider the concurrent decline in fertility rates that is leaving an ever-increasing share of the state’s social and economic burden to a diminishing population of children and youth (5). Given the fact that the majority of the immigrant population is of working age, and that a substantial proportion of them are also of childbearing age (6), public policies should be directed at increasing the flow of immigration, rather than stemming it.

The cohort of people born between about 1946 and 1964 comprise the largest population bump in American history and they currently represent 38% of the workforce (7). As the massive Baby Boomer generation ages and retires from the workforce, as my parents and all of their friends have done, we will need to replace each one of them just to maintain current levels of economic output of goods and services. If the state hopes to maintain its economic dominance, it will need much more than that.

Where will this replacement workforce come from?

Demographers estimate that between now and 2030, when my daughter reaches drinking age, new entrants to the workforce will be composed of: 51.3 million adult children of native-born parents (third-generation or longer-term Americans); 18.6 million first-generation American immigrants; and 12.9 million second-generation Americans (adult children of immigrants, like my daughter, provided she doesn’t hit that drinking age too hard).[8] That is, 38% of the workforce in 2030, will be immigrants and their children: the same proportion of the workforce that is now held up by the Boomers today. Without immigrants, our local, state, and national economy cannot be sustained and robust economic growth will be a memory of the good old days when workers were plenty and immigration was flowing. 

I understand that immigration can raise economic concerns. Let’s look at some of the data that supports the benefits that immigrants offer to our state:

  1. Immigrants are educated. Roughly half of ALL recent immigrants that arrived between 2012 and 2016 came with a bachelor’s degree. Among Asian immigrants, 56% had a bachelor’s degree (9). Indeed, first-generation immigrants enrolled in 4-year colleges are more likely than others to finish their bachelor’s degrees within six years (10).
  2. Immigrants are active in the workforce. Immigrants are as likely as native-born residents to be in the labor force – 64% of the state’s foreign-born and 63% of native-born residents were working or looking for work in 2016, and immigrants were slightly more likely to be working (61% as compared to 58% native-born) (11).
  3. Immigrants are poor. Despite the fact that foreign-born “heads of household” pulled in a median income that was 24% less than native-born heads in 2016, they are as likely as native-born residents to live in poverty (16% native-born, 17% foreign-born) (12).

Moreover, immigrants are closing the gap in homeownership in comparison to native-born residents. According to a 2005 study by real estate company, Trulia, the homeownership rate of those born in the U.S. was 72% while that of the foreign born was 53%, representing a 19 percentage point gap. That gap in 2015 is at 15 percentage points, as immigrants enter the middle class, contributing to the economy while pursuing the “American dream” (13). Sadly, I am not (yet?) a contributor to closing that gap, though not for lack of trying. Skyrocketing housing prices, rising demand, and low inventory all increase the pressure on potential homeowners in the Bay Area where I live, but - we’ll get to that in another post… In many other ways, I am a typical immigrant: I hold degrees of higher education, I am full-time employed, I pay my taxes, I volunteer at my daughter’s school, and in our community. I am like, totally American (I’m saying this in my best valley-girl drawl). And like my fellow Hispanic and Asian naturalized citizens who voted at higher rates than their native-born counterparts (14), I also vote. I call my representatives in Congress. I send emails. I even send faxes to them.

Now is the time to invite immigrants to contribute to our social and economic fabric - as they have done since the birth of this nation - not to shut it down. 

Ultimately, the numbers tell the story: without immigration, the state’s (and the nation’s) up-and-coming working population will simply not be enough to sustain current levels of output as aging cohorts exit the labor market. Now is the time to invite immigrants to contribute to our social and economic fabric - as they have done since the birth of this nation - not to shut it down. 

Immigrants play a critically important role in helping to keep California economically strong and vibrant. Let your know your representatives in Congress know your thoughts on immigration, DREAMers, and Deferred Action for Childhood Arrivals (DACA). 

References

1. https://www.nytimes.com/1981/08/23/us/california-becomes-melting-pot-of-1980-s.html

2. http://www.westerncity.com/Western-City/May-2017/Immigrants-the-Economy-and-Civic-Engagement/

3. http://www.ppic.org/publication/immigrants-in-california/

4. http://www.ppic.org/publication/immigrants-in-california/

5. http://popdynamics.usc.edu/pdf/2017_Myers_New_Importance_Children.pdf

6. http://www.ppic.org/publication/immigrants-in-california/

7. http://popdynamics.usc.edu/2013_Myers-Levy-Pitkin_Immigrant_Workforce_Contributions_CAP.pdf

8. http://popdynamics.usc.edu/2013_Myers-Levy-Pitkin_Immigrant_Workforce_Contributions_CAP.pdf

9. http://www.ppic.org/publication/immigrants-in-california/

10. https://www.nytimes.com/roomfordebate/2015/09/03/is-immigration-really-a-problem-in-the-us/immigrants-bolster-academic-and-civic-engagement-in-the-us

11. http://www.ppic.org/publication/immigrants-in-california/

12. http://www.ppic.org/publication/immigrants-in-california/

13. https://www.trulia.com/research/immigration-nation/

14. http://www.pewresearch.org/fact-tank/2017/05/12/black-voter-turnout-fell-in-2016-even-as-a-record-number-of-americans-cast-ballots/ft_17-05-10_voter-turnout_naturalized/

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