Economic Antidote for a Shrinking America: Immigrants

MIAMI — After finishing a particularly satisfying dinner at a Coral Gables restaurant with his wife, Pedro Martinez quietly slipped around to the back alley where the kitchen is.

“Whatever you’re making, I’ll give you a raise,” Mr. Martinez whispered when the back door swung open. An executive at 50 Eggs, a restaurant group based in Miami, he is always ready with a stack of business cards for occasions like this.

More immigrants have streamed into South Florida than to most American cities, and for decades, employers have relied on them to wash dishes, put up drywall and care for grandmothers. Still, there are not enough to fill Miami’s relentless boomtown demand for workers.

As unemployment rates nationwide have sunk to record lows, filching workers — from kitchens and construction sites, warehouses and Walmarts, truck cabs and nursing homes — has become routine. In cities like Miami that are magnets for immigrants, newcomers have filled some job openings, but employers across several industries and states insist that many more are needed for their businesses to function, let alone grow.

The economic impact is just one facet of an immigration debate that vibrates with political and moral import, challenging ideas about America’s identity and culture. But it is also one that can be examined more dispassionately by looking at the numbers.

And the numbers, most economists say, indicate that there is plenty of room. Immigrants make the country richer, they argue.

“Without immigration, we shrink as a nation,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who has advised Republican presidential candidates and now leads the conservative American Action Forum.

That’s because growth is driven by two ingredients: the size of the work force and how efficiently those workers produce things. And both are creeping well behind the postwar average.

One reason is that Americans are having fewer babies. Birthrates fell last year to a three-decade low, ensuring that the next generation of native-born Americans will be smaller than the current one.

The result is fewer workers and consumers; fewer houses to build, phones to sell and cars to buy; fewer gains all around. Turn away new immigrants, and the picture darkens considerably.

Using census data, the investment company the Blackstone Group estimates that without immigration, the working-age population between 25 and 64 years old would drop by 17 million by 2035.

“We really need immigrants,” Byron R. Wien, vice chairman of Blackstone’s Private Wealth Solutions group, said during the company’s quarterly webcast last month. “If we have a shrinking population, it’s going to be tough to have rising G.D.P.,” or gross domestic product.

At the moment, there are 7.3 million job openings nationwide and six million people unemployed. That gap is expected to widen as the number of retirees grows faster than the number of new workers.

“In every market that we’re in, we’re dealing with staffing shortages,” said Pilar Carvajal, the founder and chief executive of Innovation Senior Management, which manages seven assisted-living centers in Florida. Entry-level workers in the area make from $10 to $12 an hour — the same as a dishwasher and slightly more than a farmworker.

She has turned away business, declining to manage properties in Fort Myers. “It’s a staffing void,” she confided during a visit to a memory care center in Broward County. Employment agencies won’t even return phone calls.

“Thank God we have immigrants coming in,” she said. “We’re hiring them as fast as they come.”

More than a million immigrants enter the United States every year, most of them through authorized channels. Altogether, there are more than 44 million immigrants, or 13.6 percent of the population. The share is significantly higher than it was in 1970, but below the peak in the 1890s, when millions of Europeans crossed the Atlantic Ocean.

President Trump has publicly resisted the argument that the nation needs more immigrants. “Our country is full,” he said during a visit to the border this spring. “We can’t take any more.”

But Mr. Trump’s proposals have at times deviated from his statements. In May, he proposed revamping legal immigration, without reducing the overall level, by giving preference to immigrants with skills, education and job offers, instead of people with family ties.

There is no way to figure out precisely how many more immigrants the national economy could easily absorb without a lot of guessing. Powerful forces like technology, globalization and the decline in union strength can heave economies around willy-nilly, benefiting some workers and hurting others, regardless of immigration.

Despite a decade-long expansion and a low official jobless rate, the income gap is widening, and many Americans struggle to find stable employment and middle-class wages.

A common complaint is that immigrants snatch jobs from native-born Americans, particularly those who didn’t finish high school. This group is already most likely to earn the minimum wage or be out of work.

There is scattershot evidence that in some places immigrants can press down wages at the lowest end of the income scale, but that is not typical.

An economy, after all, is not a snapshot frozen in time, but a moving picture. Immigrants take jobs, but they also help create jobs — by generating demand for goods and services like groceries, haircuts and homes.

More often, economists say, immigrants complement American workers. More educated women, for example, may decide to work if the availability of immigrants makes child care more affordable.

And many tasks that most people previously did themselves — mowing lawns, polishing nails, picking up takeout, driving — are now contracted out because there is labor to do them.

“The middle class is afforded some luxuries that only the affluent could afford in the past because of immigration,” said Muzaffar Chishti, director of the Migration Policy Institute’s office at New York University School of Law. “If people are prepared to adjust their needs, we don’t need as many immigrants.”

Choices about how to provide essential services and compensate workers are not just economic but political as well, Mr. Chishti pointed out: Should the government spend more on training, offer workers incentives to relocate, subsidize elder care, protect workers’ bargaining power or help build affordable housing so that low-wage workers can cover basic expenses?

What happens now is that migrants tend to fill jobs that citizens don’t want to take for the pay offered. And they are also much more willing to pick up and move to a new city or state for a job.

Significantly higher wages might attract more native-born workers to the service jobs that many immigrants occupy — in health care, housekeeping or hothouses. But if labor costs raise the price of tomatoes or a manicure, people will purchase fewer of them.

Push up costs too much, and some jobs might disappear or move to other countries.

Over all, income and production would shrink.

In Houston, the economy has averaged 2.5 percent annual growth over the last decade. Maintaining that growth requires immigration, the Center for Houston’s Future, a research group associated with the Greater Houston Partnership, concluded.

In industries like health care, hospitality, construction and technology, there are simply not enough workers to sustain the growth rate. During the last decade, the Houston area’s native-born work force grew 1.6 percent annually while the number of documented immigrants jumped 5 percent. Undocumented workers increased 0.4 percent.

To many workers, complaints about a labor shortage ring hollow when companies are earning record profits and giving executives multimillion-dollar paychecks while offering workers meager raises.

Several businesses, though, have much slimmer profits. Nationwide, for example, restaurant profit margins average 3 to 5 percent.

At one of 50 Eggs’ busiest restaurants in Miami, Yardbird Southern Table and Bar, roughly 80 percent of the staff members were born abroad.

“The idea that legal immigrants are taking jobs away from residents of the U.S. is just not reality,” said John Kunkel, the founder and chief executive of 50 Eggs, which also operates Yardbird locations in Las Vegas, Dallas and Singapore. “That’s the armchair view of somebody who doesn’t run a business.”

Seasonal industries, like agriculture and resorts, are particularly dependent on migrant workers. Several Trump Organization properties have obtained temporary visas to employ dozens of foreign-born workers.

This past tomato season, DiMare Fresh, a family-owned distributor with farms in Florida and California, had scores of unfilled jobs.

At its main packing house in Homestead, about an hour south of Miami, the company was able to fill only 165 of the 280 open jobs. Another center in Ruskin, near Tampa, lost many of its workers when Amazon opened a fulfillment center a few minutes away.

“Amazon has sucked up all the labor,” said Paul DiMare, the chief executive. He said his business could not afford to offer year-round employment or benefits.

The company is experimenting with new technology — a machine to automatically stack 25-pound boxes of tomatoes on pallets, and sensors to sort tomatoes by size and color when there aren’t enough graders, usually older Haitian women at this site, to eyeball the produce as it loops along conveyor belts.

Automation, rather than higher wages, is often the response to labor shortages. When immigration restrictions in the mid-1960s dried up the pool of Mexican farm laborers, California growers started using mechanical harvesters to pick tomatoes.

“Firms adjust,” said Jay Shambaugh, director of the Hamilton Project at the Brookings Institution. “If you have a shortage of low-skill workers, you’ll get more kiosks at McDonald’s where you punch in your order.”

Tomato season in Florida doesn’t resume until November. In the meantime, Mr. DiMare shakes his head when asked about detentions at the border and deportation raids.

“They want to send all these people back,” he said. “Who the hell is going to do all this work?”

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