Soon, we will all be competing to attract foreign workers.
Follow this authorEduardo Porter's opinions
FollowThe United States is on the same track, if a little further behind. The Census Bureau’s baseline projections show the working-age population — 18-to-64-year-olds by U.S. standards — starting to decline only after 2050. But, as in Canada, America’s relative workforce resilience is thanks almost entirely to immigration.
According to the Census Bureau’s zero-immigration scenario — imagine a world in which Trump returns to power and gets to implement his most xenophobic dreams — the entire U.S. population starts shrinking next year. The working-age cohort shrinks by 4.2 million between 2025 and 2030, by an additional 5.7 million over the following decade and by 8.5 million more in the decade after that.
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Decreases in prime-age populations bring about problems. The output of fewer workers must sustain an economy that includes larger cohorts of retirees. As the elderly tend to save less, the savings rate generally declines, depressing investment and, ultimately, productivity growth. Aging also demands more spending on health and pensions, which strains government budgets.
Charles Kenny of the Center for Global Development suggests that beyond these dynamics, largely stemming from the growing share of nonworking seniors in the economy, an absolute decline in the working population can cause further damage by turning certain labor-intensive industries infeasible — “stranding” investments because the necessary supply of labor is missing. Looking at countries where the shrinking has already started, Kenny and fellow researcher George Yang find that countries afflicted by declining working-age populations experience significantly lower growth of gross domestic product and GDP per person, as well as lower tax revenue and lower investment returns.
Automation fueled by artificial intelligence might compensate for the shrinking labor force and boost productivity growth. But so far, there has been little evidence of this outside of narrow sectors such as manufacturing. To plug the hole, affluent countries will be forced to reconsider their hostility toward immigrants. Rather than “how can we keep them out?,” the relevant question will become “where can we find some?”
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It’s likely to be more difficult to find these people than the current surge in immigration would suggest.
So far, the United States has been pretty good at attracting people. Immigrants and their U.S.-born children accounted for the entire increase in the American labor force since the turn of the century. Without them, the population of workers in their prime — ages 25 to 54 — would have shrunk by more than 8 million.
The jump in immigration that is freaking out American voters — a net........