DANGEROUS AND DESTABILIZING — Social Security insolvency. Less economic growth. A smaller and older workforce. Those are some of the long term economic consequences demographers and economists say the U.S. could face if Donald Trump makes good on a central tenet of his campaign platform — significantly cutting immigration levels and increasing deportations. The reason why curtailing immigration would send such large shockwaves through the American economy isn’t simply because the nation would be deprived of the economic benefits of immigration. It’s because the effect would be amplified by a much more deeply ingrained and long term trend that’s starting to surface more frequently in political discourse — the consequences of a shrinking population as fewer American families decide to have children. A new political awareness is growing around America’s record-low birth rate, a debate that’s been turbocharged recently by vice presidential candidate J.D. Vance’s viral comments about “childless cat ladies,” which maligned Americans who don’t have children. Vance has called the issue “catastrophic” for the country. “If your society is not having enough children to replace itself, that is a profoundly dangerous and destabilizing thing,” he said in an interview with Megyn Kelly on Friday . But according to economists and demographers, immigration is one available answer to falling fertility rates. In fact, according to a January report from the Congressional Budget Office , immigration is almost entirely responsible for keeping the population at steady state or growing levels thru 2054, even as the U.S. fertility rate continues to fall. “I get three or four journalists calling a week now about low fertility and shrinking populations,” said Jennifer Sciubba, a demographer and president and CEO of the Population Reference Bureau. “People are now seeing that this trend is real and speculating about the impacts.” For the population to stay at steady state or growing levels, the fertility rate typically has to be at least 2.1 children per woman. But after peaking in the 1960s, for decades in the U.S. and many other countries the fertility rate has been falling. In the United States, the number of births decreased 3 percent from 2022, according to the most recent data collected by the Centers for Disease Control , bringing the rate down to 1.6 births per woman over the course of a lifetime. That’s far below the rate needed to keep the US population at replacement levels. While many other developed nations are beginning to battle the demographic effects of a shrinking and aging population, the U.S. has been spared so far because of the role new immigrants play in keeping the population at steady state levels, or in some projections, growing, even as the number of native-born births falls. Jagadeesh Gokhale, a director of special projects for the Wharton Budget Model at the University of Pennsylvania, and a former senior fellow at the libertarian-leaning Cato Institute, has built demographic models that show the huge growth impacts that immigration has had and is projected to have on the nation’s population levels. According to the modeling , if accounting only for births and deaths the U.S. population would begin to fall in the 2030s, but if immigration into the country is included the population rate stays steady, and even continues to grow throughout the rest of the century. Gokhale, who also studies the fiscal health of programs like Social Security and Medicaid, said that the modeling makes some assumptions — such as the current surge in immigration will abate in the next few years — and he acknowledges that it’s difficult to get exact numbers about the extent of immigration, especially illegal immigration. “Immigration helps fill in the gap,” he said, adding that the fertility rate has dipped even further below the replacement rate since the Great Recession. “If that [immigration] rate is sustained, it will help maintain population growth… All of these factors suggest that immigration, at least in the next few years, is going to be a factor that will offset the low fertility rate that we project.” For programs such as Social Security, another important factor is the ratio of workers to retirees. If there aren’t enough workers paying into the system on a consistent basis, it makes it more difficult for the programs to stay solvent. Immigrants typically enter the country at a younger age, and so are able to contribute to the programs for decades, Gokhale said. “More people and more workers means more tax revenue,” he said. “That means benefits to retirees will be funded better. Fewer immigrants and fewer workers means it will be more difficult to fund these programs.” And that’s to say nothing of economic growth. More people means more productivity, and higher gross domestic product. In the most recent outlook from the Congressional Budget Office , economists said that rising immigration would increase the growth rate of gross domestic product by 0.2 percent throughout the next decade by increasing the available labor force. That’s $7 trillion in growth over the next decade generated by immigration, equating to $1 trillion in tax revenue. “There’s a long economics literature that documents the benefits that immigrants have to the economy,” said Tara Watson, an economist who studies immigration at the center-left Brookings Institute. “Immigrants create demand as well as supply in labor. They’re demanding goods and services, and are providing growth.” And while Watson said that it’s difficult to track exactly how many immigrants are paying into the tax system due to the illegal nature of much immigration, she said most immigrants in the most recent surge at the border had work permits, and thus were putting money into government coffers. There’s not as close a tie between reduced immigration and a possible spike in inflation, as some liberal commentators have tried to draw. Instead, reduced immigration impacts decrease the demand for goods and services while also decreasing the available labor supply, making it difficult to say if reduced immigration would spike prices. That said, if immigration does decline under a second Trump presidency, Sciubba said that the economic and social impacts of an aging and shrinking population — or the threat of one — might quickly surface as a contentious issue. “What’s on my radar is, ‘If immigration falls but there’s a growing awareness about population aging and low fertility, what are the government policies that follow to encourage more births?’” Sciubba said she was watching closely the possibility of policies limiting access to contraceptives, Elon Musk’s support for natalism and the possible political backlash if politicians pursue pro-natalist policies. “And those policies may not lead to more births but they will lead to a more fractured America,” she said. Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com . Or contact tonight’s author at pederschaeferwriting@gmail.com . |
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