Immigration: These states have the highest demand for foreign-born labor
As the US labor force continues to grow, so does the demand for foreign-born workers.
According to the Brookings Institution, the demand for US work visas is expected to exceed 7 million by 2030 as the country relies on immigrants to fill job gaps due to economic growth and retirements. In comparison, there were 4.1 million employment visa applicants in 2023, according to the most recent data available.
The Congressional Budget Office projects that the surge in immigration that began in 2022 will increase economic output in the coming years. On average, legal immigration is expected to contribute 0.2 percentage points to US GDP growth each year over the next decade.
“Not only are foreign-born workers an important part of the economy broadly, but there are some states and some industries where they're pretty much completely reliant on foreign-born workers in order to function,” said Dr. Chloe East, a visiting fellow at the Hamilton Project and associate professor in economics at the University of Colorado Denver.
Immigrants tend to settle in areas with a strong job market and a known social network, two factors that help predict their success. Areas that serve as immigrant hubs typically see an expansion in the labor supply and an increased demand for goods and services.
Consequentially, the states expected to have the highest demand for work visas by 2030 are highly populated states, such as California, Texas, New York, and Florida. Smaller states like New Jersey, Illinois, and Georgia are also expected to have high demand, thanks to their large existing populations of immigrants.
These states also have the largest share of immigrant STEM workers. In 2019, immigrants accounted for 23.1% of all workers in science, technology, engineering, and math-related professions in the US, up from 16.4% in 2000, according to the American Immigration Council. During that same period of time, the overall number of US STEM workers surged 44.5%.
The occupations with the most demand
More than 31 million foreign-born people were employed in the US in 2023, representing 18.6% of the overall active labor force.
On a national level, occupations that fall under trades and production (such as manufacturing and construction) are expected to have the highest demand for new work visas "due to those occupations' large share of overall employment and heavy reliance on foreign-born workers," according to Brookings.
Another category expected to see growth in foreign-born workers is retail and entertainment, largely due to the high rate of retirements among current employees.
Immigrants are also increasingly making up a larger share of employment in strategic industries, which the Economic Innovation Group defines as industries that are reliant on innovation and knowledge work and have national or economic security implications.
“Immigration is one of those rare policy areas where, especially on the skilled side, it's as close to what economists call a free lunch as you can get,” Connor O’Brien, research and policy analyst at the Economic Innovation Group, told Yahoo Finance. “It's a super impactful lever on innovation and scientific research, productivity, and if you do it right, … it can also be a huge fiscal boost.”
According to an EIG analysis, the computer systems design industry has the largest share of foreign-born workers at 27.9%.
California and Texas, two states expected to have the highest visa demand, have become hubs for tech companies that hire foreign-born workers. In addition to major California-based tech companies that sponsor H-1B visas, such as Salesforce (CRM) and Cisco (CSCO), other startups in the state recruit foreign-born labor, including Reddit (RDDT), Databricks, and X, the platform formerly known as Twitter.
Other industries with large immigrant worker shares include medical equipment and supplies (24.8%) and scientific research and development services (24.1%).
'Policies create politics'
With the 2024 election on the horizon, immigration is expected to be a hot topic for both candidates and voters.
Much of the polarized debate has focused on immigration at the southern border; however, misleading rhetoric can follow foreign-born workers across industries and state lines, regardless of their legal status, according to the Hamilton Project's East.
“Having this kind of harmful rhetoric and uncertainty about what the future of immigration policy is going to look like in this country, I think, is costly,” East said.
If elected to office again, former President Donald Trump aims to reinstate policy decisions that he made during his first term, such as completing the border wall, reestablishing Remain in Mexico, and eradicating catch-and-release. The 2024 GOP platform also promises to "carry out the largest deportation operation in American history."
H-1B visa denial rates increased during the first few years of Trump's presidency, and legal immigration was restricted until federal judges ended some of the administration's practices. Many expect Trump to use similar tactics in a second term.
President Biden has approached immigration with a different outlook than Trump, but his new executive order for border control is similar to some of Trump's moves on the issue. The new order raises the standards for migrants to enter the country when there is a high frequency of border crossings and aims to deter migrants from coming to the border.
The Biden administration has also taken several steps to streamline the process for obtaining work visas, particularly for undocumented immigrants who were brought to the US as children, known as Dreamers, and spouses of US citizens.
Amada Armenta, an associate professor of urban planning and the faculty director of the Latino Policy and Politics Institute at UCLA, emphasized the role politicians can play in shifting the narrative around immigration.
“Good policy can improve the politics around this issue, which has been really mired in dysfunction for decades,” Armenta said. “So what we need are some courageous leaders who will change the narrative about the importance of immigrants in the United States and do their job to create legal opportunities for people who have been working here for decades and to adjust a lot of families who are out of status.”
O'Brien also stressed the importance of getting immigration policy right.
“America's ability to attract and integrate the world's best and brightest is unparalleled," he said. "No other country can do it quite like us. And it's an enormous benefit to the United States in so many ways."
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Maya is a reporter for Yahoo Finance.
Adriana Belmonte is a reporter and editor covering politics and healthcare policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at [email protected].
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