Many of today’s economic problems can be related to labor shortages, but we’ve spent little time thinking about a simple solution: immigration. An analysis by Anthony Schaffhauser of the Minnesota Department of Employment and Economic Development showed that a return to 2015 immigration levels could alleviate 25% of our labor shortages.
The decline in the workforce, which had already occurred before the pandemic, has been exacerbated during and after the pandemic. This has led to Minnesota experiencing record-low unemployment at 2.3%, which in turn has led to labor shortages, supply chain problems and inflation.
International net migration fell precipitously during the pandemic from 9,317 in 2019 to 4,042 in 2021, a 57% drop. But net international migration in Minnesota was 17,000 as recently as 2015.
Minnesota’s workforce has also fallen victim to an aging population, of which 22.5% of baby boomers are nearing retirement. The youngest baby boomers today would be around 60 years old. So part of the labor shortage is down to simple demographics that are unlikely to change anytime soon.
The DEED analysis estimates a labor shortage of about 8,813 workers per year by 2030. Returning net immigration to 2015 levels would add about 2,550 working immigrants each year, reducing about 25% of the shortage, according to the DEED report.
The solution to alleviate at least some of the labor shortages would be to encourage international and domestic migration through both state and federal policies. The good news is that 93% of the state’s current immigrants are 15 years of age or older and have an employment rate of 73%, nearly 4% higher than nonimmigrants.
To encourage immigration, we can look back to our Minnesota ancestors, as the Minnesota government encouraged immigration in the late 1800s.
Businessman Eugene Burnand has been hired by the state for two years to recruit Germans and other immigrants from New York, according to a report by the Minnesota Historical Society “The Official Encouragement of Immigrants to Minnesota During the Territorial Period.”
He is said to have helped develop Minnesota’s German population from 147 around 1850 to 18,400 in a decade, or from 2.5% of the population to 10%.
The report notes that Minnesota’s population grew from 4,500 to 172,000 in 10 years from about 1850 to 1860, and the role of immigration “cannot be disputed.”
And when there are worries about being “accepted” of immigrants, the story also offers perspectives. According to the Minnesota Historical Society, in 1890 40% of Minnesota’s population was foreign-born. That’s 8% today.
Immigrants want to work. They would alleviate labor shortages affecting everything from going out to eat to finding beds in care homes for the elderly. The idea of immigration for economic growth was a good idea in the 19th century. That has remained the case to this day.
— Mankato Free Press
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