Immigrants may be a pivotal component in Connecticut’s economic strength – or weakness – in the coming decade, according to recent statistics. Population projections from the University of Virginia’s Demographics Research Group, reported by the American Immigration Council, show that in many states in the Northeast and Midwest, including Connecticut, growth of the working-age population is slowing due to aging, lower fertility rates, and people moving out of the state.
The aging of the workforce in the working-age population can mean shrinking workforces and potential economic problems, the Council reported recently. As a result, “states need to think about how immigration can ameliorate impending trouble.”
By 2020, the number of working age adults (age 25-54) is expected to decline in 16 states. For example, in Maine, while the overall population is expected to decrease by about two percent, the working age population will decline by 16 percent. Vermont and West Virginia can also expect declines of more than 10 percent, while Connecticut, Illinois, Michigan, New Hampshire, Ohio, Pennsylvania, Rhode Island and Wisconsin can expect more than five percent decline, according to the data.
Those states “will become less attractive to the people who are already there, and less attractive to newcomers,” according to UC-Berkeley demographer Ronald Lee, who explained that a shrinking working-age population can hurt a state’s economy: businesses close due to a lack of workers and customers, housing prices drop, schools close, and tax revenue declines.
The decline in the working-age population will not be offset by births, the Council reported, citing data the projects the current total fertility rate is about 1.86 children per woman and would need to be at least 2.08 for the population to replenish itself. At the same time, the U.S. population is getting older and living longer. The Bureau of Labor Statistics (BLS) projects that by 2024, Americans age 55 and older will increase by 18.2 million—reaching 102.9 million, or 38.2 percent of all people in the country.
Reliance on immigrants is nothing new for Connecticut. The Connecticut Business and Industry Association recently cited statistics from the New American Economy, which indicated that 494,059 Connecticut residents were born abroad. That is 14 percent of the state’s population, compared to 13 percent across the United States.
For example, almost a quarter (23%) of Connecticut workers in science, technology, engineering, and math fields such as healthcare and bioscience were immigrants. Over 36,000 foreign-born Connecticut residents are self-employed, with immigrant-owned businesses generating $1.1 billion income in 2014 while employing 73,047 people. “Immigrants are already playing a huge part ensuring that Connecticut remains a leading innovator in industries like healthcare and bioscience,” according to the analysis.
The report also notes that foreign-born workers currently make up 21.3 percent of all entrepreneurs in the state, despite accounting for 13.7 percent of Connecticut’s population.
Immigration mitigates the downward population trends that are anticipated, in Connecticut and beyond. In many areas of the country, the foreign born have accounted for more than 20 percent of the growth of the adult population since 1990. In some areas – mainly in the Midwest – overall adult population would have declined if not for an increase in the foreign born population. Almost half of immigrants admitted between 2003 and 2012 were between the ages of 20 and 40, while only 5 percent were ages 65 or older, the Council reported.