Worker shortage cure: immigration

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Many of today's economic problems can be related to workforce shortages, but we've spent little time thinking about one simple solution: immigration.

An analysis by Anthony Schaffhauser of the Minnesota Department of Employment and Economic Development (DEED) showed that returning to immigration levels of 2015 could mitigate 25% of our workforce shortages.

The decline in the workforce that was in progress before the pandemic was made worse during and after the pandemic. That has led to Minnesota having record low unemployment at 2.3%, which in turn has created workforce shortages, supply chain issues and inflation.

Net international migration dropped precipitously during the pandemic from 9,317 in 2019 to 4,042 in 2021, a 57% decline. But the net international migration in Minnesota has been as high as 17,000 as recently as 2015.

Minnesota's labor force also has been the victim of an aging population, with 22.5% of it being baby boomers nearing retirement. The youngest baby boomers would be about 60 years old today. So part of the workforce shortage has been simple demographics that are not likely to change anytime soon.

The solution then to at least starting to alleviate workforce shortages would be to encourage international and domestic migration both with state and federal policies. The good news is that 93% of the current immigrants in the state are 15 or older, and they have a workforce participation rate of 73%, nearly 4 percentage points higher than non-immigrants.

For ways to encourage immigrations, we can look to our Minnesota forefathers, as Minnesota government encouraged immigration in the late 1800s.

Businessman Eugene Burnand was commissioned by the state for two years to recruit Germans and other immigrants out of New York, according to research by the Minnesota Historical Society in a report called "The official encouragement of immigrants to Minnesota during the territorial period."

He is said to have helped develop the German population of Minnesota from 147 circa 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."

Immigrants want to work. They would alleviate the workforce shortages that affect everything from eating out to finding the elderly nursing home beds. The idea of immigration for economic growth was a good idea in the 1800s. It remains so today.