How Immigration Helps the Economy

The human species has been migrating since the dawn of time. Many a millennium has passed since our cavemen days, but it’s still human instinct to move around in search of greener pastures.

Nowadays, people can’t roam the world as freely as they once did. The existence of frontiers and border security regulations has helped create a negative perception of immigrants.

However, immigration actually has a positive impact on host economies. Let’s look at some of the data.

Immigration and the economy: how migrant workers satisfy and create demand

The Organization for Economic Cooperation and Development (OECD) reported that, in the last decade, migrants have accounted for a 47% increase in the US workforce and a 70% increase in Europe. 

For occupations such as machine operating, assembling, maintenance and repair, migrant workers represent a 24% entry increase in Europe and a 28% increase in the US. Those who struggle with the language or have low education levels tend to focus on these manual labor industries that are often disregarded by natives. 

But what happens to the many natives who also lack higher education? According to the Berkeley Review of Latin American Studies, natives with similar education backgrounds take up jobs that require more communication skills like supervising or managing. 

Immigrants are also high-level workers and business owners

While a third of immigrants never finished high school, another third possesses a college degree or higher. The 21st century has seen immigrants represent 31% of the increase in highly educated workers in Canada, 21% in the United States and 14% in Europe.   

Migrant workers also have a significant presence in the science, technology, engineering and mathematics (STEM) sectors, with international workers comprising 22% of new hires in the US and 15% in Europe. 

Migrants fill gaps within both fast-growing and declining sectors of the economy, helping to garner more labor-market flexibility. And that’s not saying anything about the many immigrants who are business owners and employers. In the United States, for instance, there is data indicating that immigrants are more likely to start a business on their own than native-born workers. A lot of these businesses are small ones, which make up a big percentage of all job providers in the US. And while we’re at it, let’s not forget that some major tech companies like Amazon, Google, and Apple were founded by children of immigrants. I guess you can see where we’re going with this: immigration and economic growth go hand in hand.  

Why immigration is good for the economy (and society as a whole) 

As we’ve discussed above, immigrants can make up big percentages of the workforce in some industries, filling gaps that result from worker shortages and making the economy of host countries stronger. In many developed countries, immigrants help strengthen social security programs by adding more active workers to the economy in comparison to retired workers. 

Fields such as maintenance, cleaning, building, fishing and farming, which are critical to any country’s economy, have a high immigrant participation rate. The percentage can be as high as 36%, according to the Center on Budget and Policy Priorities.  

The bottom line is that immigrants fill gaps in the job market, be it because the local population is not available to fill them or because there aren’t enough workers. And since immigrant workers are often more mobile than the average worker, they contribute to filling these gaps wherever they appear, helping economies at a local level. 

There’s other ways in which immigrants help the economy (and society as a whole). Immigrants support the birth rates of their host countries, which for some countries has dropped considerably in recent years. By doing this, they not only strengthen the labor market, but they also create demand in several industries.  

But it’s not all about the economy. Once migrant workers embark on a journey to another country in search of a better life and succeed at establishing themselves, they help make cities more vibrant, culturally rich, and diverse. Be it in large urban areas or in rural ones, it’s hard to imagine a world without immigrants nowadays. Immigrants remain a vital force to any country and economy, and a key part of dynamic, thriving societies.

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