Jeremy Horepdahl
Over the past five years, the US labor market has added, on net, 5.4 million jobs, according to the US Bureau of Labor Statistics household survey. The establishment survey shows an even larger gain of seven million jobs. The differences between the household (Current Population Survey) and establishment (Current Employment Statistics) surveys is notable, but for the purposes of this post, I use the household survey because it has the necessary demographic information to analyze workers. Of those 5.4 million new jobs, almost all of the net gains have gone to foreign-born workers, who saw an increase of 4.7 million jobs. There are only about 650,000 more native-born workers in the United States than at the beginning of 2020.
Does this mean that foreigners actually are “taking our jobs”? No. To understand why, you need to know a little about the pool of potential native-born workers.
First, we need to recognize that even though the total number of native-born workers has fallen, the percentage of native-born Americans of prime working age (25–54) is slightly higher than it was five years ago. Using a 12-month average, it was 80.7 percent in January 2020 and 81.5 percent in January 2025. (Figure 1). Foreign-born workers also saw an increase over this time period, from 77.1 percent to 78.1 percent, and both of these measures are essentially at their highest readings going back to 2007, when the data series begins.
How do the data in Figure 1 square with the earlier data, which show that all net job gains went to foreign-born workers?
The two facts are easy to reconcile. The number of native-born Americans of prime working age is not growing: It has been basically flat since about 2013, as my Cato colleague Scott Lincicome showed in a recent essay. And this problem will only get worse: The US birth rate began declining in 2007—exactly 18 years ago, meaning that the upcoming crop of native-born Americans will be shrinking in the near future. The US fertility rate (births per woman) in 2023 was almost 25 percent lower than in 2007 (Figure 2).
While most existing government interventions to increase fertility have been costly and largely ineffective, we can hold out hope that some improvements can be made. For example, Vanessa Brown Calder and Chelsea Follett have put together a good list of policy reforms to increase the birth rate—mostly by getting the government out of the way. But absent some major reforms, the native-born, working-age population will likely not increase dramatically or at all in the near future. Even if the birth rate increases right now, we would have to wait about 18 years before there is any impact on the labor force and decades before it has a major impact.
Unlike native-born Americans, the foreign-born working-age population has been increasing in recent years. In contrast to the flat prime working-age (25–54) population for native-born workers since 2013, the comparable foreign-born population grew by almost five million over that same time frame. These data come from the Current Population Survey, a joint project of the US Bureau of Labor Statistics and the US Census Bureau, and like any survey, they are subject to some issues, especially with sampling when it comes to groups that might be hard to identify, such as immigrants. But this is likely the best data we currently have for these measures (it is the same survey used to calculate the unemployment rate and other labor market measures), and with the benchmark update in January 2025, the data should have more accurate population estimates from the Census Bureau.
Without continuing immigration to the United States, we face serious demographic challenges. Predictions are hard, especially about the future. But using Census population projections, William Frey at Brookings estimates that the ratio of US workers to the retired population will decline dramatically under any scenario. The decline is especially pronounced under the “zero immigration” scenario: Currently, there are about 3.6 workers per retiree in the United States, which could fall to as low as 1.4 workers per retiree by 2100 without any new immigrants. Even under the “high immigration” scenario, this ratio will fall to around 2 workers per retiree, but the fiscal and economic differences between these two scenarios could be massive.
Maintaining a healthy worker–retiree ratio (the inverse is sometimes called the old-age dependency ratio) is crucial for the continuing functioning of the changing US economy. Most retirees will consume large amounts of health care services, necessitating more health care workers. Many retirees have sizeable amounts of wealth and want to spend some of that wealth on travel and tourism. We need workers to support those industries. And on and on it goes, in many industries that no central planner could foresee right now but will nonetheless need to be supported by new, younger workers in our future economy.
While most new jobs in the US economy have gone to foreign-born workers, this isn’t because they are taking them from Americans. We need immigration laws that are more open, not less. Absent more immigration, the United States would need massive improvements in automation and productivity in many industries, which would require fewer regulations and taxes that stifle innovations.
