The U.S. Labor Department (USDOL) recently announced that the portion of foreign-born workers in the labor force reached its highest point since 1996 last year.
USDOL classifies foreign-born workers as those who were not born in the United States or whose parents are not U.S. citizens. Their data revealed that 27.2 million U.S. workers are foreign-born, which makes up 17.5 percent of the working population.
Overall, the share of foreign-born workers has steadily increased in the past four decades. In 1970, they made up just 4.9 percent of the workforce – this number has more than tripled since then.
One of the central reasons for this decades-high foreign-born employment share is the influx of migrants and the reduction in U.S.-born children. According to the Pew Research Center, between 2015 and 2035, the number of immigrant workers is expected to increase by 4.6 million and the number of U.S.-born workers with immigrant parents is projected to rise by 13.6 million.
On the other hand, the number of U.S. born workers with U.S. born parents is anticipated to drop by roughly 8.2 million in that same time period.
“The birth rate of people who are born here and whose parents are born here is below the replacement rate and have been for quite some time, and immigrants tend to have more children, and so there are more first-generation American citizens,” said economist Elliot Pollack. “The flow of people who were immigrants is actually slowing, but it’s still positive.”
Additional data from USDOL revealed that foreign-born workers, on average, are paid less than native-born workers. Median weekly earnings were $758 for foreign-born workers and $910 for native-born workers.
The disparity in earnings is largely attributed to varying levels of education. 21.2 percent of the foreign-born workforce has not obtained a high school diploma, whereas just 4.1 percent of native-born workers have not completed high school.
However, at the same time, a larger portion of foreign-born workers had a Bachelor’s degree in 2018 — at 36.9 percent which is six percentage points higher than in 2005.
Regardless of their level of education, foreign-born workers are crucial to the U.S. economy. Because of extensive job vacancies in both skilled and unskilled positions, foreign-born workers provide an additional pool of labor that maintains the economy’s engine.
“We need workers, we need skilled workers, and that’s the whole idea,” Pollack said. “There are a lot of unskilled jobs: some construction, leisure and hospitality — those jobs need to be filled. But also, of the 7 million jobs that are unfilled, probably at least 10 percent of those are in high tech. So, there’s a need across the board. You need PhDs in engineering and astrophysics, but you also need construction workers and agricultural workers and hospitality workers.”
The U.S. faces a labor shortage as the native-born worker population declines, and foreign-born workers are filling in many of those gaps. “Do we need immigrants? Absolutely. We’re going to have a perennial labor shortage for years,” Pollack said.