The Economics of Necessity: Economic Report of the President Underscores Importance of Immigration

May 2005 (Volume 4, Issue 3)
by Walter A. Ewing, Ph.D.*

Executive Summary

Although immigration is crucial to the growth of the U.S. labor force and yields a net fiscal benefit to the U.S. economy, current immigration policies fail to respond to actual labor demand.

Among the findings of this report:

• Nearly a quarter of the U.S. population is either foreign-born or the child of someone who is foreign-born.

• In 2004, 14.9% of the labor force was foreign-born, amounting to 21.8 million workers. Between 1996 and 2003, the foreign-born accounted for 58% of the 11 million new workers in the United States.

• In 2003 foreign-born workers comprised 41% of the labor force in “farming, fishing, and forestry”; 33% in “building and grounds cleaning and maintenance”; 22% in “food preparation and serving”; 22% in “construction and extraction”; 19% in “computer and mathematical occupations”; and 17% in “life, physical, and social sciences.”

• In the 1996-2002 period, the immigrant share of employment growth amounted to 86% of the 1 million new positions in “precision production, craft, and repair” (which includes mechanics and construction workers) and 62% of the 2 million new positions in service occupations (such as janitors, kitchen workers, and grounds workers).

• The fertility rate in the United States is projected to fall below “replacement” level by 2015-2020, declining 1.91 children per woman.

• During the 2002-2012 period, the number of workers age 55 and over will likely increase 49.3%, compared to only 5.1% among those 25-54 and 9% among those 16-24.

• During the 2002-2012 period, the number of jobs will likely increase by 23.3% in “professional and related occupations” and 20.1% in “service occupations.”

• An increase of 10% in the foreign-born share of the workforce lowers wages for natives less than 1%.

• Over the next 50 years, legal immigrants will add $407 billion to the Social Security system.

• As of January 2005 there were 271,000 applications for employment-based green cards pending (including a backlog of 191,000 at the Department of Homeland Security) and the Department of Labor had a backlog of 300,000 applications for labor certification.

* Walter Ewing is a Research Associate with the Immigration Policy Center.