A December 2020 policy brief highlights that the COVID-19 pandemic is exacerbating the nation’s already troubling population decline, which will negatively affect the U.S. economy. The Mercatus Center finds that
(m)odifying a nation’s birth rate or death rate is a difficult challenge for public policy, and immigration policy is the most obvious tool for policymakers who want to reverse what may prove to be a downward demographic spiral.
The brief cites Census Bureau data showing a steep decline in U.S. population growth, with the population change between 2018 and 2019 being the lowest in numerical terms since 1945, and in percentage terms, since the Spanish Flu year of 1918. It notes that
(t)hree factors determine the change in any nation’s population over a given time: births, deaths, and net international migration. Behind the sharp decline in the US population growth rate in the past two decades has been a steady rise in deaths per year, a falling number of births owing to an even steeper decline in the birth rate, and declining levels of net international migration, a trend even more pronounced recently in large part because of executive actions by the Trump administration.
The report indicates that the pandemic is expected to worsen those trends, due to an increased death rate (including nearly 300,000 U.S. COVID-19 related deaths at the date of its publication), a decrease in births by as much 500,000 in a year, coupled with Presidential Proclamations suspending entry of most immigrants during the bulk of 2020.
The U.S. population will shrink without immigration, as is already happening in 27 countries. The policy brief notes that 55 countries are projected to be shrinking by 2050. The U.S. was not expected to be in that group due to comparatively robust immigration, but plunging birthrates are changing the U.S. forecast.
The brief adds that demographic decline strains public finances, especially retirement programs, leads to a “less dynamic and innovative economy,” and weakens the U.S.’s influence in the world.
Because birth and death rate trends cannot be easily or quickly reversed, the report finds that increased immigration is the most promising approach to stemming the U.S. population, and workforce, decline.
An important policy objective for the new Congress and administration in 2021 should be to restore immigration to the United States to its levels in recent years before the COVID-19 outbreak and the Trump administration restrictions. The government may maintain temporary public health precautions, but these should be the least stringent possible. Then Congress and the president should work together to increase immigration in a way that maximizes the economic and social benefits thereof.
One goal should be to raise the annual net migration rate to more closely match the higher rates in Australia and Canada, two other advanced economies that have benefited from immigration and have thus been able to slow their own declines in population growth. According to a study from the Mercatus Center at George Mason University, Australia and Canada admit more than twice as many immigrants per year relative to their populations as the United States does. In other words, the United States could double its annual net migration from its recent average of 1 million to 2 million and it would still not match the relative openness to immigration of Australia and Canada.
You can read the full report here.