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Why Strict Limits On Immigration Could Seriously Damage Minnesota’s Economy

Why Strict Limits On Immigration Could Seriously Damage Minnesota’s Economy

While the national political climate has grown hostile to immigrants, Minnesota needs them more than ever, says a U of M study.

A certain President of the United States may not like to hear this, but Minnesota’s future population and economic growth depends on increased immigrant and refugee admissions.
 
That’s the conclusion of a recent University of Minnesota report underlining the state's shrinking workforce, its aging baby boomer generation and the need for foreign-born workers to help lead sustained economic growth.
 
As detailed in the “Immigrants and Minnesota’s Workforce” report, the state’s population continues to grow older and is gradually aging out of the workforce. Yet Minnesota isn’t really equipped to make up that loss with the growth of the native population, according to the study. 
 
There are a couple of reasons for that: In the next two decades, demographers predict more deaths than births in Minnesota. This means that the state will mainly count on workers from other places to sustain its economy.
 
Traditionally, Minnesota was often successful in attracting people in their prime working years from other states for jobs in various sectors. Between 2002 and 2014, however, the number of people moving to the state (the report describes them as “domestic net”) has drastically declined.
 
In stark contrast to domestic migrants, the number of immigrants and refugees (or “international net”) coming to the state has dramatically increased, which has contributed to economic wellbeing, revival of abandoned neighborhoods and population growth.
 

Minnesota’s Net Migration by International and Domestic Components, 1991-2014

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Adapted from “Figure 4: Minnesota’s Net Migration, by International and Domestic Components, 1991-2014”
 
Data show that Minnesota’s foreign-born population has tripled in the past three decades. Today, the state is home to about 430,000 foreign-born residents, many of whom escaped violent conflicts in East Africa, Southeast Asia, Latin America and the former Soviet countries. 
 
Still, the number of immigrant and refugee residents in the state isn’t actually enough to offset the decline in the "domestic net" of those moving to Minnesota. Indeed, today’s workforce requires far greater numbers of people to fill the labor force shortage.
 
Immigrant workers are well positioned to do just that, the report states. “Minnesota’s success at attracting immigrants to the state and more effectively incorporating these immigrants into its workforce will play an important role in determining the strength of its economy in the future,” Ryan Allen, an associate professor at the U’s Humphrey School of Public Affairs, writes in the report.
 

Immigrants fill the workforce gap

In Minnesota and across the country, according to projections from many economists, there will be more jobs available than people to fill them in the coming decades. These jobs, though, will mostly be concentrated in areas that don’t require advanced degrees: personal care aides, retail salespersons, wait staff, cashiers and others.
 
The Minnesota Department of Employment and Economic Development (DEED), for example, has reported that more than 130,000 jobs that require less education will be available in Minnesota from 2014-2024.
 
So who is going to fill that employment void? It isn’t likely to be native-born Minnesotans or people from other states, the study shows. Instead, immigrant and refugee populations are well positioned to take up employment in occupations with more job openings.
 
That’s because about one-quarter of foreign-born residents older than 25 years of age don’t have a high school diploma. “Overall, immigrants in Minnesota are very engaged in the workforce,” Allen writes, “but they earn less than native born residents at least partly because such a large proportion lack educational backgrounds that would allow them to access good paying jobs in the state.”
 
But that isn’t the case for all foreign-born Minnesotans. About 33 percent of the immigrant population holds at least a bachelor’s degree and 72 percent participate in the workforce.
 
Whether they hold advanced degrees or not, though, immigrants and refugees certainly serve a greater purpose in the state economy: They help drive the 0.5 annual workforce growth rate the state needs to maintain.
 
“Without a substantial increase of migration to Minnesota in the future, the state’s labor force will likely grow much slower than it has in recent years,” Allen states. “This will make filling job vacancies more challenging in the future.”
 

Dispelling misconceptions

While the 22-page report, which was released in January, underlines the workforce shortage and the need for more people to fill the void, it’s also meant to refute misconceptions — that most immigrants and refugees are a threat to national security or a drain on government services.
 
Immigration was a signature campaign issue for many Republican leaders, who took an anti-immigration stance in a pledge to reduce the number of immigrants and refugees during the 2016 presidential election season campaign.
 
Since Donald Trump won the presidency, he’s followed through on his pledge on immigration. In his first week as president, he signed executive orders aimed at erecting a wall along the U.S-Mexico border, deporting undocumented immigrants and barring people from predominantly Muslims countries from entering the country.
 
The report, however, conveys a different message about immigration than that of the president and his supporters — a message which Eric Schwartz, dean of the Humphrey School of Public Affairs, hopes will help separate fact from fiction regarding the role of immigrants and refugees in the U.S. economy.
 
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“This report should be seen as an effort to elevate facts over fear,” Schwartz said in an interview. “Public policies will only succeed in making people’s lives better if they’re based on information and rational analysis — and not based on fear and prejudice.”
 
The fact is, he said, if Minnesota is to continue to be a source of productive employment for residents, then it’ll need far greater numbers of immigrant workers. Over the years, immigrants and refugees have revitalized neighborhoods, filled important agricultural jobs outstate and helped sustain industrial employment.
 
If not for the country’s long history with immigration, Schwartz added, America would have been “far poorer, smaller, less diverse and less influential. Our immigration has enabled the United States to avoid the demographic challenges that countries in Europe and Japan are confronting.”