America’s Demographic Challenge

The US faces an aging population, fewer workers and a slower economy. Immigrants can reverse that.

The United States needs immigrant workers as its workforce ages.  In 2012, the median age of the American worker will be the highest in its history at 41.6 years old. As birth rates fall and the baby boomer generation retires over the next twenty years, the United States could face labor shortages, skyrocketing costs for elderly care, and economic slowdown.

Immigrant workers help the U.S. avoid the demographic problems that have slowed the economies of other industrial nations. In Japan, for example, an aging population and isolationist immigration policy mean that there are too few workers to care and pay for the millions of senior citizens, too few workers to grow food, and too few working in the manufacturing industry that drive their export-led economies.

Important facts to know about the role of immigrants in keeping America young and working.
Compared to other industrialized nations, the United States is demographically blessed with a young and growing population.

  • More than one-third of this growth is due to new immigrants arriving in the country, and the rest includes births to immigrants living in the U.S.
  • Other countries with lower fertility rates and fewer immigrants are struggling to support their elderly.  For Italy to keep the same ratio of employed to retired by 2050, the country would have to attract 2.3 million immigrants or move the retirement age to 77.

Young working immigrants generally contribute more to the government in revenue than they cost in services, helping defray the cost of retiring Americans.

  • Because they tend to come to America when they are young, working, paying taxes and not drawing extensively on social services.
  • Immigrants were 39 percent of all new entrants to the labor force in 2008, but only 13 percent of population, reflecting the fact that they are more likely than the U.S.-born to be of working ages.
  • A RAND study found that of government health care spending at the federal, state and local level, only 1.25% is spent on illegal immigrants.
  • The National Research Council found that legal and illegal immigrants pay nearly $1,800 more in taxes than they receive in benefits.
  • In large part because of immigration, the U.S. has a relatively young and growing population – a demographic advantage over many other mature economies.

About NAE

New American Economy is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans. More…