CBO’s Demographic Projections Highlight Importance of Immigration

In July of 2022, the Congressional Budget Office (CBO) released a report projecting demographic trends in the U.S. for the next 30 years. The Demographic Outlook: 2022 to 2052 provides population projections that underlie the CBO’s baseline budget projections and economic forecast published in May 2022, and long-term budget projections published in July 2022. Among other things, these projections help determine the expected impact on the social security system.

Two take-aways from the report are similar to the findings of other projections of U.S. population growth: the growth of the U.S. population is slowing, and immigration will be an increasingly important contributor to population growth.

Population Growth

The U.S. population is projected to grow by 0.3 percent per year, on average, over the coming 30 years. For comparison, population growth over the previous 40 years averaged 0.9 percent. Within the overall growth of the population, the cohort that is 65 or older will grow at a faster rate than younger cohorts. The number of people in their prime working years, age 25 to 54, will grow at an average annual rate of 0.2 percent. By contrast, that cohort grew by 1 percent on average during the period 1980 to 2021. In 2022, the number of people in their prime working years relative to those who are 65 and older (and generally retired or about to retire and drawing Social Security) is 2.3 to 1. By 2052, that ratio will be 1.7 to 1.

Immigration

Over the projection period, fertility rates remain below the replacement rate, and so immigration will increasingly drive population growth. CBO projects immigration to gradually rise to 1.1 million by the third decade of the projection period. (This is still 400,000 below the average net immigration in the early 2000s, prior to the Great Recession.) Over the next decade, immigration will account for about 75 percent of population growth. By 2043, immigration is projected to account for all of U.S. population growth.

Where Assumptions Could Go Awry

The CBO Notes that fertility rates in the U.S. averaged 2.02 children per woman in 1987 – 2007 period. In 2007, the rate peaked at 2.12. During the Great Recession, the rate began to decline, falling to 1.64 children per woman by 2020. CBO assumes the rate will rise to 1.75 births per woman by 2030. It is not hard to imagine, however, that another period of economic instability could create conditions for another downturn in the fertility rate.

The CBO projects mortality rates to decrease, with life expectancy rising by approximately five years by 2052. However, from 2015 to 2017, life expectancy in the U.S. actually declined — driven by suicides and drug overdoses, and life expectancy declined again in 2020, driven by COVID-19. It is not hard to imagine periods of life expectancy declines over the next 30 years. For example, the lethality of future pandemics might be increased due to the substantial percentage of Americans who don’t trust measures to protect us from deadly viruses. Also, it is not hard to imagine that, in an increasingly polarized society, violence may alter mortality projections. By 2020, for example, gun violence became the leading cause of death among children ages 19 and under.

Immigration is another area where there could be significant deviations from what is projected. CBO notes that, while net immigration averaged 1.5 million between 2000 and 2006, it fell considerably during the Great Recession. It never recovered by the time policies of the previous administration slowed immigration, and policies enacted during the COVID-19 pandemic caused a steep drop in immigration flows. Policies of future administrations could significantly impact these CBO projections.

If any of these rates (fertility, mortality, immigration) were to deviate significantly from CBO projections, the effects on the future workforce could be significant. For example, of the more than one million deaths due to COVID, approximately 260,000 of them were below retirement age (and more likely than not in the workforce). Between 2017 and 2022, the sharp downturn in net immigration removed 3.2 million potential workers from the workforce, contributing to our current labor shortage.

This report reinforces other population projections which have emphasized the importance of immigration to U.S. population growth a — and to the growth of our workforce.

When do we give them a break?

There have been a pair of reports released recently with new estimates of the undocumented immigrant population in the U.S. A report by the Pew Research Center, released in November, provides a wealth of information on the size and demographic characteristics of the undocumented population as of 2016. These estimates are compared to population estimates calculated in 2007.

Another report by the Center for Migration Studies (CMS) takes a look at trends in the undocumented population between 2010 and 2017.

The headline is that the undocumented immigrant population has declined significantly. Pew estimated the undocumented population to be 10.7 million in 2016 — down from its 2007 peak of 12.2 million. It is as low as it has been since 2004. The estimate includes individuals who are now living with temporary protection from deportation through two programs — Temporary Protected Status (TPS), covering approximately 317,000 people, and Deferred Action for Childhood Arrivals (DACA), which protects approximately 700,000 persons from deportation. The Trump administration is trying to end both of these programs.

pop_2016_2007
Source: Pew Research

According to Pew, undocumented immigrants now make up less than a quarter (24 percent) of the total immigrant population in the U.S., down from 2007 when it was nearly a third (30 percent).

The decline is attributed primarily to a sharp decline in the number of Mexicans entering without authorization, and the departure of Mexican undocumented immigrants. CMS estimated that, since 2010, the undocumented Mexican population has declined by 1.3 million and, in 2017 for the first time, undocumented immigrants from Mexico constituted less than half of the U.S. undocumented population. Continue reading “When do we give them a break?”

Donald Trump’s Latino Problem

It was a bit over a year ago that Donald Trump announced his candidacy for the presidency with his now famous tirade against Mexican immigrants. Out of the gate, Trump alienated a rapidly-growing constituency—Latinos. In the first public opinion survey of Latino voters after Trump’s entry into the race, conducted by Univision Noticias in June and July of last year, 71 percent of respondents said their view of Trump was unfavorable. In a matchup with Hillary Clinton, just 16 percent of Latinos said they would vote for Trump.

So, what’s happened in the year during which Trump has gone from being a candidate to being the presumptive nominee?

Trump chart

Another survey in July of 2015 of Latino adults, conducted by The Washington Post-ABC News, showed that 81 percent of Latinos viewed trump unfavorably. 64 percent of respondents in this poll had strongly unfavorable views of Trump.

In September, NBC News and the Wall Street Journal conducted a national poll with an oversample of Latinos, and 72 percent of those Latinos said they had negative feelings towards Trump, with 65 percent having strongly negative feelings. This poll showed an uptick in support for Trump in a matchup with Clinton—a whopping 17 percent said they would vote for Trump.

Continue reading “Donald Trump’s Latino Problem”

Immigration and Japan’s Declining Economy

Japanese worker

I saw that this post on IZA World of Labor about the Japanese economy. It has again slipped into recession. Why? An aging workforce, and very low immigration.

Japan just doesn’t have enough workers to fill available jobs. The unemployment rate is at a long-term low of 3.4 percent. For every job seeker, there are 1.24 job openings. Japan’s worker shortage, according to the Wall Street Journal, will cost the country $86 billion in 2015 and 2016, or 2 percent of the country’s GDP.

Japan’s aversion to immigration has been a slowly developing disaster. Japan ranks 3rd in the world in median age of its population: 46.1 years. Immigrants could bring down the median age of the workforce and help alleviate the worker shortage. However, today foreign-born workers constitute just 1 percent of the Japanese workforce.

Here in the U.S., immigrants make up 16.5 percent of the workforce. Undocumented immigrants here make up a far greater percentage of our workforce than all foreign labor in Japan: 5.1 percent. The median age in the U.S. is 37.6.

Still, our policies aren’t keeping up with the times. Congress last adjusted our immigration levels a quarter century ago, in 1990. Since that time, the GDP of our economy has doubled. And it looks like Congress will not act any time soon to modernize our immigration system.

Photo credit: Stephen Geyer via Flickr and the Creative Commons license.

African Immigrants and the American Mosaic

An article from the March 25 Boston Globe is a reminder that America is increasingly diverse.

“On the hard road to US citizenship, black immigrants are increasingly gaining ground in Massachusetts and the United States, expanding the possibilities for political power and changing what it means to be black in America.”

In Massachusetts, according to the Globe, black immigrants comprise about a third of the black population, and a majority of black babies born today have an immigrant mother. While Massachusetts is way ahead of the nation in these statistics, more black faces are appearing at swearing-in ceremonies for new citizens all across the country.

Immigrants from Africa and the Caribbean are still a small part of our immigration stream. Until recently, few Africans had close family members in the U.S. to sponsor them through an immigration system that favors close family ties. However, Africans have benefited from two other immigration streams.

In recent years, the U.S. has accepted more Africans as refugees than in the past. In 2011, more than 7,500 refugees were admitted to the U.S. from Africa.

Africans have also been big winners in the annual visa lottery. This system was set up specifically to mitigate effects of a family immigration system that has been dominated by relatively few countries. In 2011, more than 24,000 Africans gained immigrant status through the visa lottery, far more visas than immigrants from any other region of the world.

Immigrants entering the U.S. through these two streams will be able to sponsor family members, so Africans will increasingly have access to the family immigration system.

When it comes to citizenship, there is an accelerator effect that pertains to Africans: According to the Office of Immigration Statistics, African immigrants spent the least time in legal immigrant status before applying for citizenship—five years. Basically, this means that, generally, African immigrants apply for citizenship as soon as they are eligible. The norm for all immigrants is seven years.

All this means that, in the citizenship ceremonies of the future, we will see more African faces as America becomes even more diverse.

This article was written for the National Immigration Forum, and was published on the website of the New Americans Campaign.