Foreign immigration into the United States has been unusually low since peaking in 2016, according to Census Bureau data. Since then, government policy has cut the number of immigrant visas granted, and Covid-19 restrictions further reduced the number of foreigners coming into the country. These annual declines in immigration, combined with baby boomers retiring, will keep the labor market tight for years to come.
The data are imperfect. Net foreign immigration—adding incoming residents and subtracting outgoing—includes estimates of undocumented immigration. The annual data don’t always align with the decennial census, so some massaging of the numbers occurs. But even with some inaccuracy, the change in immigration is stark.
The decline in immigration comes while baby boomers are aging out of their working years. Last year the working age population actually declined, though by a tiny percentage. The drop in working age population came while demand for goods and services grew rapidly, as the country’s consumers, businesses and governments were flush with cash. The labor shortage is no surprise.
The outlook for the labor market is grim for employers but very bright for job seekers. The demographics of baby boomers retiring means that in this decade, there will be no net gain in the working age population absent substantial immigration.