In 2007, 4,316,233 babies were born in the US, just beating the previous record of 4.3 million set at the peak of the baby boom in 1957. That is an approximation, because not all births were recorded in national statistics at the time.
It has been almost all downhill since then, with last year’s total of 3,595,298 live births the lowest since 1979, although that number has not been finalized and could still rise a little.
This has implications for the working-age population. Those record-setting babies of 2007 turned 16 last year, which according to the US Bureau of Labor Statistics is when working age begins, so this year the number of native-born 16-year-olds will start falling.
While there is no working age cutoff according to the bureau, if things are cut off at 64, as statistics agencies in other countries do, then it is clear that the continued aging of baby boomers, the last of whom would turn 65 in 2029, is also putting downward pressure on the potential labor supply.
When the much less numerous members of Generation X begin to turn 65 in 2030, the native-born working age population should enter a period of recovery, although barring a big turnaround in birthrates, the long-run prognosis remains one of decline.
All this is context for understanding the remarkable fact that the bureau has said all of the increase in employment in the US since February 2020 — the month before the COVID-19 pandemic partially shut down the US economy — has been due to foreign-born workers,.
One could frame this as foreigners taking all the jobs, and of course some immigration critics have been doing just that.
Yet the supply of would-be workers is essential context. Monthly bureau estimates — available back to 2007 — of the native-born US population aged 16 through 64 jump around a lot more than the actual population possibly could, showing a decline of 2.8 million since June last year that is simply not plausible.
They are derived from the monthly Current Population Survey conducted by the US Census Bureau in collaboration with the Bureau of Labor Statistics and adjusted every January to conform with the latest population estimates from the Census Bureau.
It is a handy illustration that Current Population Survey data — from which the unemployment rate and other key employment indicators are derived — are subject to sampling and other errors, and that month-to-month movements, especially for subsets of the population and for levels as opposed to rates, might not signify anything at all.
Still, the overall picture that native-born working-age population growth slowed to a crawl around 2016 and is declining accords with historical births data and is thus most likely correct.
Here, with the same caveats, are the foreign-born working-age population numbers.
Immigration into the US slowed during the first three years of US President Donald Trump’s administration (entirely because of declines in legal immigration; illegal immigration rose), then screeched to a halt with the arrival of COVID-19. Coupled with the sharp drop in labor force participation since February 2020 among those aged 65 or older and other effects of the pandemic, this led to labor shortages and the so-called Great Resignation of 2021 and 2022.
Since then, legal and illegal immigration have come roaring back, with the Bureau of Labor Statistics estimating that a 2 million increase in the foreign-born working-age population over the past 12 months.
In response, labor markets have settled down, with the quit rate — the rise in which was the most tangible evidence of a Great Resignation — now slightly lower than it was before the pandemic and wage gains moderating, although hiring is still strong and unemployment low.
The sudden jump in immigration seems to be enabling the soft landing that most economists saw as impossible as of late 2022.
There have been trade-offs. The Great Resignation coincided with what economists David Autor, Arindrajit Dube and Annie McGrew dubbed the “unexpected compression,” in which low-wage workers made big pay gains relative to those with higher incomes.
That period of outperformance ended in the middle of last year, the Federal Reserve Bank of Atlanta’s Wage Growth Tracker showed.
Also, letting millions of people cross the border with Mexico illegally and then apply for asylum — which allows them to apply for work permits after a 150-day wait, with arrivals from a few countries able to skip the line — is not exactly the fairest or most efficient way to fill gaps in the US labor supply. There are valid disagreements about how much immigration the US should allow and whose requests to work there should be given priority.
However, without immigration, the US working-age population would be shrinking, and it seems likely to remain the case for the rest of the decade. Immigrants are taking all the jobs because, on net, no one else is available.
Justin Fox is a Bloomberg Opinion columnist covering business, economics and other topics involving charts. He is a former editorial director of the Harvard Business Review.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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