I recently posted an estimate that permanent (green card) immigration adds roughly 720,000 new employed persons to the workforce. How much do they contribute to the flow of all persons entering into and exiting employment (due to death and retirement)?
To sum up: Current immigration contributes to new worker growth and to total worker growth net of retirements. Not as dramatically as some conjecture. However, if it is important to keep the working age population growing, then new immigrants every year are very important.
First, let’s look at new entrants. Think of streams of persons entering into the job market.
In 2025, about four million U.S. born persons will turn 18. As a lifetime cohort group, at any time in prime working age, about 80% will be employed, or about 3.2 million. Thus one can say that they will add 3.2 million to employment rolls.
On the surface, today, first time immigrant workers (720,000) are about 22% of new these U.S. born workers. but there are expected fewer U.S. born persons turning 18 in 2035, and fewer new workers – 2.9 million. If we keep immigration at the same level, in 2025 immigrant workers will be about 25% of new job holders.
If you look at the contribution of new immigrants to the total stock of workers, the contribution of new immigrants soars. U.S. born workers are retiring in hordes due to aging-out, resulting in there being an annual net decline of all U.S. born workers of about 200,000. This net loss will increase, part to aging, part to low fertility. Thus, 730,000 new foreign born workers compensate for an overall decline of U.S. born workers.
However, consider that foreign born workers are also aging. The net change in immigrant workers (720,000 new entrants less many retiring due to aging) is most likely probably slightly or moderately positive. This will continue to be positive, as today new immigrants are more into working age than U.S. born persons. But before too long that will not be the case as the foreign-born population ages overall.
The Census expects the total workforce to grow by about 500,000 a year – about one third of one percent a year. This increase is due in part to people expected to work later in life. For example, Census expects that the number of 65+ working will increase from 2022 to as soon as 2032 by about on average 400,000 a year. This shows that there is more than immigration and young entrants to the growth of our workforce.