In terms of workforce talent and global competitiveness, America once had two advantages. The first was a relatively high birthrate compared to other developed economies—high enough to grow or at least maintain the country’s population. The second was comparatively liberal immigration policies for skilled and nonskilled workers.
These advantages have been steadily eroded in recent decades, raising concerns that the U.S. eventually will face the same demographic pressures as countries like Italy and Japan. Shrinking working-age populations in these and other industrialized countries have been a drag on their economic growth and productivity. For example, more than 28 percent of Japan’s population is over 65, followed by Italy at 23 percent. The U.S. is at 16 percent—a number that’s steadily climbing. In this situation, many companies are positioned to implement a talent mobility strategy to address this obstacle.
Declining American Birthrate
For years, the relatively high American birthrate helped to seed the future workforce as older workers retired. Right now, 10,000 Boomers are leaving the working world each day, succeeded by the much smaller Generation X. Some relief comes from the larger Millennial and Generation Z populations, but more trouble lies ahead. Recent data shows the U.S. birthrate declined not only during the covid year of 2020 but throughout the past decade.
According to a new Brookings report, “The “total fertility rate,” which is a measure constructed from these data to estimate the average total number of children a woman will ever have, fell from 2.12 in 2007 to 1.64 in 2020. It is now well below 2.1, the value considered to be “replacement fertility,” which is the rate needed for the population to replace itself without immigration.”
As Brookings notes, the reasons for the continuing decline and possible policy responses are still yet to be determined. But the implications for the nation’s future economic growth and global competitiveness are clear. First and foremost, companies will continue to face stiff competition for talent recruitment—particularly if immigration remains limited.
Constraints on Immigration
Many nations with lower-than-replacement birth rates also have very restrictive immigration policies. Taken together, these factors tend to constrain the countries’ economic growth and the competitiveness of their industries. America’s rapid economic growth and prosperity in the 20th century were fueled by relatively liberal immigration policies before World War II.
In contrast, postwar immigration policies have often been driven more by politics than national interests, creating a worsening scarcity of skilled and unskilled workers. (The libertarian Cato Institute has an interesting rebuttal of anti-immigration arguments made by the right and the left, The 14 Most Common Arguments against Immigration and Why They’re Wrong).
More immediately, many businesses are noting how difficult it is to find workers. Right now, there are over 3.1 million unfilled jobs in the U.S. Much of this is attributed to extended unemployment benefits, fear of re-entering the workforce, childcare issues and a new unwillingness to work for meager wages. Less mentioned is immigration.
A recent Axios story pointed out that immigrant and non-immigrant visas issued during the year ended October 2020 were down by nearly five million, or 54%, from 2019. U.S. Citizenship and Immigration Services (USCIS) froze green card applications in April 2020. They halted temporary work visas that June. The administration recently re-opened green card applications and resumed worker visas. However, it will take a while to resume the flow of workers, given continuing COVID restrictions and State Department backlogs.
Axios quotes Jon Baselice, VP of immigration policy at the U.S. Chamber of Commerce: “COVID-related travel restrictions continue to prevent many employers from meeting their workforce needs, and they are causing significant business disruptions for many companies, especially smaller seasonal businesses across the country that are dealing with acute workforce shortfalls.” USCIS will ultimately lift these COVID-related restrictions, but severe limits on immigration will remain.
Talent Mobility as a Workaround
Companies must play the hand they are dealt, but talent mobility can be an essential building block in a modern talent management strategy. More liberal remote work policies will allow companies to expand their talent reach, bringing jobs to people. But remote work is not a panacea.
Popular opinion is beginning to coalesce that few companies will become entirely virtual. Instead, most seem to be moving towards a hybrid model, where employees will still be expected in the office at least part of the week. This hybrid approach facilitates collaboration and cements culture while still allowing employees some personal flexibility.
To optimize their workforce and realize their full potential, most companies will also need to bring people to jobs. A contemporary talent mobility program, with employee relocation benefits tailored to the company’s business needs, competitive situation, culture and budget, can help a company grow and prosper—even in a competitive labor market.
