The U.S. birth rate hit an all-time low last year, and if that trend continues, the lack of a robust workforce will start to drag the economy down.
George Mason University professor and Brookings Institution fellow Jack Goldstone says loosening up restrictions on immigration could be the solution.
He joined KERA’s Think this week to talk about his essay “The U.S. Needs More Immigrants” which appears in Reason magazine.
Stream the entire conversation or read interview highlights below.
Last year, the birth rate fell to 1.7 children for every woman in America. Why does that number create a problem?
Well, the arithmetic is pretty simple. If you have a mother and father together, and if their children are supposed to replace them in the next generation, you need an average of two children per woman. We’re not getting that: 1.7 means that there’s a shortfall every generation and that shortfall compounds over time. We used to say, “Well, that doesn’t matter so much because immigrants have a much higher birth rate and they’ll compensate for the falling birth rate among white Americans.” Well, you know what? That stopped being true right after the Great Recession. The last 10 years, the birth rate for Hispanics in America has been about the same — low, below 2.0 — as that for white families.
What does population growth have to do with the health of entitlement programs like Medicare and Social Security?
The government just issued a long-term forecast that says in 15 years, the Social Security trust fund will be exhausted. That means without new sources of funding, everyone on Social Security will get a 20 percent across-the-board cut in benefits. Where is the money going to come from in order to avoid that undesirable outcome? Well, it comes from economic growth, it comes from taxes paid by workers. If we get more workers, there’s more economic output, more available wealth to contribute and things go better.
Because of that decline of the birth rate among whites and Hispanics and frankly, a substantial decline in immigration from Mexico and Latin America, the U.S. Census has had to revise its projections for the U.S. workforce downward quite a bit. In 2008, the Census projected America would have a total population of about 440 million by 2050. In the last 10 years, because of the decline in birth rates and immigration, the Census now, based on the most recent data, thinks the U.S. population will only reach 400 million by the middle of the century. That’s only 32 years away and we’re looking at 40 million fewer workers earning money and paying taxes than we expected to have just 10 years ago.
Is there already a decline in GDP growth in places like Japan that have seen birth rates well below replacement for some time now?
Japan is doing two things worth the United States looking at. First of all, they have been struggling with the fact that the decline in population has meant a decline in goods and services. And among other things, that means prices have not been going up; in fact, they’ve been going down. Japan also has a lot of debt. To reduce the debt, Japan wants the prices to go up because inflation in the long run reduces everybody’s debts. The Bank of Japan has been doing everything they can, buying everything in sight to try and raise inflation. They’ve been doing this for 20 years, and they just announced this week that they have once again failed to meet their target for raising inflation.
Very quietly, they have decided they have to increase immigration. If you know Japan, they are the most frightened of foreigners, perhaps, and very strongly nationalistic people, very proud of their homogeneity and their language and culture. But they’ve come to realize, “We can’t take care of our elderly, aging population, whom we value, we can’t meet our economic targets, if our population continues to decline. They’ve started to encourage permits, work agreements to bring in more immigrants to contribute to the economy. Japan has recognized, “We need these people.”
Lots of people worry immigrants drive down wages for everybody else because they’re willing to work for less than native-born Americans. What do the data tell us about that?
According to the National Academy of Sciences study, the only people whose wages are affected by immigrants are recent, previous immigrants. So, people who immigrated and are in the very lowest sector of the job market may have their wages impacted by further immigrants coming to compete with them at the low end, but the affect is still small. But if you look only at wages, you’re missing part of the picture.
A lot of small towns in the Midwest, where there is meatpacking and farming and construction, have been emptying out. The young people growing up in those towns don’t want jobs that are tough and dirty and medium-to-low pay, plucking chicken feathers, slaughtering pork, hauling bales of hay, doing the heavy farm work that needs to be done. Their parents did it, but they don’t want to do it. Big companies look around, and say, “This younger generation is moving out of here; we can’t keep things going.” Cafes in town close, schools close, retail closes, and these little Midwestern towns fade away. Except, towns that have been generous to immigrants who are willing to do those jobs have been able to keep those businesses going.
From an economic perspective, how important is the difference between documented and undocumented immigrants?
First of all, there’s this kind of illusion that undocumented immigrants are “dangerous,” “they’re evil,” “they shouldn’t be here,” and “they're the worst of the worst.” And, really nothing could be further from the truth. A lot of undocumented immigrants are the Dreamers, hundreds of thousands of people who went to college, are law-abiding people.
Illegals do tend to be at the lower end — that is if you come in to be an engineer or a doctor or a college student, you’re usually coming in on a work visa or a permit or some other legal mode of immigration. It’s true that illegal immigrants themselves will be less economically valuable for the most part than legal immigrants. On the other hand, that doesn’t say anything about their children. The most energetic, enterprising, successful people we have in this country, many of them are children of immigrants. And there’s no distinction that I know of between children of legal and illegal immigrants in that respect.
Interview responses have been lightly edited for length and clarity.