The annual growth in the U.S. civilian labor force has declined from 1.2% in the late 1990s to a projected 0.4% in the next ten years. Half of that growth today is due to immigration. As births are now below replacement rate, labor force growth in the future will trend into negative territory except for immigration. For the U.S. to return to at least a 1% annual growth in the labor force, we will probably need to more than double our immigration flows.
An immigration goal might look like this: design the flow of immigrants so that the net annual flow results in 70% of them joining the labor force when they receive their green card (if they are not working here already). Aim for that 70% to equal or exceed 0.75% of the current workforce. This 0.75% today equals 1,200,000 a year. That translates into (1,200K/.7) = 1,700,000 new green cards a year.
A second Trump term will drive immigration down further. A Biden Administration may lead to embracing a this kind of goal. Democrats however do not articulate a coherent immigration strategy in their platforms. For a nation of immigrants, there exists no progressive strategy on the table.
The Congressional Budget Office just issued a revision of its longterm forecasts. It has lowered its near-term immigration flow by about 20% and it has lowered its labor force increase projections through 2050. Female fertility in the U.S. today is about 1.6 children per female, well below the replacement rate of about 2.1 per female. This bodes for a near-zero annual increase in the labor force when today’s children become adult. The ONLY reason the labor force will increase will be through immigration.
Translating an annual flow of new green cards – perhaps about 790,000 today – into labor force additions requires us to estimate how many of these new recipients join the labor market. With the limitation information provided by the CBO in its new report, I can’t do that. However, it offers a shortcut. The CBO says that net annual immigration in 2020 is 2.9 per 1,000 people in the population.