carousel | February 14, 2017

Immigrants and the American Economy: A Love Story

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

There’s an upside to the Trump administration’s efforts to crack down on immigration: mobilized constituencies expressing renewed appreciation for immigrants’ positive impact on the American economy and society.

In Los Angeles, home to 3.5 million immigrants and one million of the country’s 11 million undocumented immigrants, Mayor Eric Garcetti launched the L.A. Justice Fund. The $10 million legal defense fund is backed by the city and philanthropic organizations like the California Community Foundation.

In New York City, where four million immigrants in New York City represent 40 percent of the population, and 50 percent of the workforce, Mayor Bill De Blasio has vowed to fight the Trump Administration if it cuts federal funding to the city on the grounds of its status as a “sanctuary city.”

New York, Los Angeles, Boston and 103 others that have vowed to shield their immigrant communities from discrimination and harassment from the federal agents under Trump’s direction.

Sanctuary cities, all 106 of them, collectively generate $15 trillion, or 85 percent of the national GDP, according to a study by McKinsey. New York and Los Angeles alone yield 13 percent of the GDP. (Here’s Samantha Bee’s recent segment on sanctuary cities.)

A growing number of restaurateurs are touting themselves as “Sanctuary Restaurants” — vowing to protect their workers against anti-immigration rhetoric and actions. They have a lot to lose otherwise. Immigrants represent up to 12 million workers, or 70 percent, of the restaurant sector — the second-largest private sector employer in the U.S., behind retail.

Altogether, the 40 million immigrants in the U.S. represent 13.3 percent of the population. They generate nearly 15 percent of the U.S. economy. In the 15 years between 1996 and 2010, immigrants also accounted for more than half of the U.S. labor force increase.

They account for 50 percent of startup founders for companies valued at more than $1 billion. They account for 31 percent of software engineers. That’s why Silicon Valley has been so outspoken, both in the headlines and in the courts, against the Trump Administration’s evolving immigration policy.

But it’s not just a city thing, or a coastal thing. People in rural parts of the country would have a tough time getting check-ups and prescriptions without immigrants. Healthcare workers are in short supply in the country’s sparsely populated areas. To compensate, the U.S. has a special visa scheme for foreign-born doctors to work in the U.S., provided they spend three years in an underserved area. In all, about 22 percent of the American healthcare workers and 25 percent of doctors, is powered by immigrants.

In many parts of the country, the native-born population is in decline and labor force is aging. Indeed, in the next 20 years, 80 million Baby Boomers are expected to retire. Immigrants will increasingly fill the gap. The key sectors in which President Trump has vowed to create new jobs, including natural resources like coal mining, manufacturing, and construction, including on in infrastructure, already employ more foreign-born workers than native born workers.

“If current immigration trends and birth rates continue, by 2050 virtually all (93 percent) of the nation’s working age population growth will come from immigrants and their U.S.-born children,” the Pew Research Center reports in a recent brief.

These younger workers will be paying a big chunk of the retirement benefits for older Americans. Undocumented workers alone pay an estimated $13 billion a year into Social Security taxes, while getting only around $1 billion back.

The story may already be written. Today, 61 million immigrants and their under-18 children represent 20 percent of the U.S. population. As they age, the children will take on work in the U.S. Foreign-born residents share of the total U.S. population is expected to steadily rise, from 13.3 percent today, to 15.8 percent in 2030, and almost 19 percent by 2060.

Photo credit: Frank Mckenna