The Uncomfortable Truth About Immigrants

America’s economy depends on immigrants more than politics admits or acknowledges

By Alvaro Vargas Llosa of the Independent Institute.

"We tend to focus on why immigrants want to come to the U.S., but we talk much less about why the U.S. wants immigrants to come to this country—i.e., why, xenophobic rhetoric notwithstanding, so many Americans have quietly and consistently welcomed them.

The foremost reason for this is simply that Americans don’t want to have babies. For decades now, the fertility rate among native-born Americans has been below the replacement rate (2.1). The gap has widened significantly recently, with the total fertility rate dropping to 1.6 children per woman. Not surprisingly, the native-born work force has diminished by several million since peaking in 2005 and now amounts to less than 140 million. If no foreign workers are added to the economy, in a few years, the labor force will shrink much more dramatically, reflecting the impact of the currently dismal fertility rate.

If all of the growth of the U.S. economy were due to productivity gains, this might not matter. But U.S. productivity gains have been mediocre in recent decades, with a few exceptional periods, and economic growth in several industries still depends on the number of hours worked. This means that without foreign workers, the U.S. economy would be producing far less than the $28 trillion worth of goods and services it now produces.

Between 2000 and 2020, three–quarters of the growth of the U.S. civilian labor force was due to immigrants. These are not statistics made up by foreign or domestic conspirators, but data put out by the U.S. Census Bureau. According to the Bureau of Labor Statistics, 31 million workers are foreign-born, and 15 million are the children of people born outside of the U.S. They explain a good chunk of the size of today’s economic pie.

At the same time, the economy employs about 8 million undocumented immigrants in the kinds of industries you would expect—agriculture, food processing, restaurants, construction, etc. The reason they are undocumented is not that they have a penchant for the underground, but simply that the broken immigration system does not allow demand to meet supply. It is bad enough that so many workers have to labor off the books. The real economic suicide, however, lies not just in trying to expel undocumented workers, instead of making them legal, but in kicking out documented foreign-born workers and their children, as the administration constantly threatens to do. Imagine what would happen to the economy if the government, in a matter of weeks, were to kick out 47 million people of foreign origin. Think of the impact this would have on critical areas such as health care,  where 15 percent of registered nurses and 25 percent of doctors are foreigners.

The borders have effectively been closed for new immigrant workers, except for the tiny quotas still available. (Less than 10,000 low-skilled workers are admitted each year, a ridiculously unrealistic number given the needs of the economy—which likely explains why in 2025, the hospitality industry had one million open positions). If we add this trickle to the shrinking native-born workforce, the result is a looming catastrophe in the not-too-distant future. The net result will not be a shrinking native-born workforce partly offset by a growing immigrant workforce, but a shrinking workforce altogether.

Forget all the other benefits that immigrants bring to a nation. Just think of the economy. Unless productivity were to grow by leaps and bounds in the upcoming years (something it has not done in the last several decades) or native-born Americans were suddenly to experience a reversal of their aversion to having children, the trend is unmistakable—the workforce depends on immigrant labor. Without it, the economy’s ability to produce goods and services, and therefore to raise living standards, will take a nosedive.

This and other considerations should have been taken into account before the U.S. government recently sent several thousand federal agents to Minneapolis, where, incidentally, the immigrant population is small and crimes committed by foreigners are minimal, provoking the crisis that took the lives of innocent American citizens."