Immigration and America’s Growth
Date: March 26, 2020
From our biggest cities to the heartland, immigration is increasingly important in keeping many parts of America growing.
A growing economy needs a steady, growing population. Fortunately for the United States, the number of prime working age (25-65) people has increased on average by 1.3 million each year from 2000 to 2018. As older workers retire and exit the workforce, there have been enough younger and new workers to take their place, allowing businesses to function and to expand as needed. But this growth isn’t just due to young people entering their prime working years. Instead, the data shows that immigration has been vital to the growth and stability of the U.S. workforce.
However, this growth is not uniform across the country. Some states struggle with shrinking working-age populations while others are more successful in attracting immigrants and U.S.-born residents to grow their workforces. To understand how important immigrants are to not only the overall U.S. workforce, but also to every state, we break down population data by age for every year between 2000 and 2018.
Skip to the Exploratory Tool
The National Picture
Growing economies like the United States need growing populations in order to sustain economic growth. While the relationship between population and economic growth is complex, in general the expansion of the workforce contributes to increased production capacity while also expanding the consumer market, increasing demand for goods and services, creating a virtuous cycle.
While countries like Japan have struggled to maintain—let alone expand—their workforce over the past two decades, the U.S workforce so far has continued to grow.
Since 2000 the U.S. prime working age population—those between 24 and 65 years old—increased by more than 23.6 million people, reaching more than 170.8 million by 2018. This wasn’t just due to younger Americans aging into the workforce. In fact, the numbers show that immigration was vital to this robust growth as almost half, or 46.7 percent, of total growth was from immigrants between 24 and 65 years old.
However, the United States may not be impervious to the same demographic challenges for long. Already, the newest data from the U.S. Census Bureau suggests that recent decreases in immigration and falling birthrates have already led to the slowest population growth seen in the United States in a century.
But because demographic and migration trends aren’t uniform, some states have struggled with shrinking working age populations, while others have attracted both immigrants and Americans.
Looking at all the states, we find three major patterns that characterize how aging and migration have impacted each of the 50 states and their economic prospects heading into the 2020s.
Fast-Growing States
First, there are states whose prime working age populations are growing faster than the national average.
These states enjoy strong population growth, with immigrants often playing a significant role in that growth. Many of these states are in the West and the South, reflecting a general trend of Americans moving to these areas in search of warmer weather or lower costs of living.
This includes states like Arizona, Florida, Nevada, and North Carolina, which have all seen rapid growth both in terms of their prime working age populations and the size of their economies since 2000.
Georgia is one of the fastest growing states in the country. Between 2000 and 2018, Georgia’s population increased by 28.5 percent—or more than 2.3 million people—while it’s economy nearly doubled from $307.6 billion in 2000 to almost $592.2 billion by 2018 after adjusting for inflation.
The state’s main population center, Atlanta, has for the past decade been among the fastest growing metro areas in the country. The data shows that the state on average added more than 62,000 prime working aged residents each year between 2000 and 2018. Immigrants have been integral to this growth: More than 416,000—almost 4 out of 10 new prime working age residents in the state—were immigrants.
The share of Georgia’s prime working age population that is immigrant increased from 8.7 percent to 14.5 percent. This has helped not only service industries in the state stay well-staffed but also high-skilled fields as well as more than one-third of all immigrants in the state had at least a bachelor’s degree and more than 44 percent of all software developers in the state were immigrants.
TEXT
Shrinking Workforce States
The second group of states are those who have seen stagnant—or worse—shrinking working age populations since 2000. In Maine and Ohio, the prime working age population has barely increased since 2000, while in states like Michigan, Vermont, and West Virginia, the prime working age population has actually shrunk.
In all these states, a rapidly aging population is also coming at a time of greater out-migration of younger people to other parts of the United States. Without adequate immigration to fill these gaps, this has resulted in smaller workforces and slower economic growth.
Many cities in these states have come to see attracting immigrants as a way to stave off or slow population decline, giving them a better chance of turning things around and bouncing back.
TEXT IS HIDDEN
Among all 50 states, Michigan has experienced the greatest decline in its U.S.-born prime working age population.
On average between 2000 and 2018, the U.S.-born prime working age population in Michigan shrank by almost 10,000 each year. Much of this was driven by aging, as the number of U.S.-born people aged 65 or older increased by almost 25,000 every year. With fewer younger people staying in the state, immigrants have proven to be a lifeline.
Over the same period of time on average almost 8,000 immigrants joined the prime working age population each year, helping soften the double blows of domestic outmigration and an aging crisis. The state’s reliance on immigrants as part of the workforce is clear: In 2000, 6.4 percent of the prime working age population were immigrants; by 2018, this had increased to 9.1 percent.
Given these trends, it is unsurprising that cities in Michigan have been among the most proactive in creating welcoming policies and plans aimed at attracting and retaining newcomers. Local businesses require stable workforces that offer the skills they need and towns and cities need stable, working populations in order to remain economically viable.
TEXT
Immigrant-Dependent States
Last are the states that have lost a significant number of U.S.-born people but have still managed to expand their prime working age populations. In these states, not only are immigrants offsetting other demographic trends, they are helping the working age population grow. This includes states in the Northeast whose residents have sought warmer weather as they age, including Connecticut, Illinois, Massachusetts, New Jersey, Rhode Island, and New York. By continuing to attract immigrants, these states are able to maintain local workforces for businesses and industry.
In New York and Massachusetts, for example, influxes of high-skilled immigrants and U.S.-born workers have helped draw high-paying, high-tech web and biotech industries to each state.
At first glance, New Jersey faces similar demographic challenges as Michigan. The state has a steadily aging U.S.-born population, with the number of people aged 65 and older increasing by almost 17,000 each year since 2000.
Combined with the out-migration from New Jersey to other states, this means that without immigrants the state would have seen a significant decline in the size of its working age population.
Instead, immigrants are keeping New Jersey growing. While the number of prime working age U.S.-born residents decreased by more than 251,000, the number of similarly aged immigrants increased by more than 455,000.
By 2018, the immigrant share of New Jersey residents between 24 and 65 had increased to 31.3 percent, from just 22.7 percent in 2000.