Two great demographic forces are shaping our future: the swelling ranks of retirees (without comparable increases in native-born workers) and growing numbers of immigrants. Forward-looking immigration policy should recognize America’s increasing need for workers, taxpayers, and purchasers of baby boomer homes.Immigrants ; Labor market

Dowell Myers

English

Research Papers in Economics

Communities & Banking    3
Immigrants’
by Dowell Myers   
University of Southern California
Debates about immigration in 
America have been backward look-
ing, emphasizing trends of the last 
10  years,  not  the  future.1    In  the 
decade ahead, much will change—
immigrants  and  the  rest  of  us 
included. The  preoccupation  with 
matters of legal status, important 
as they are, have distracted us from 
the larger question of whether we 
need immigrants in the first place. 
For that answer we must look more 
closely at American society itself.
My research has projected two 
major sets of changes in the decade 
ahead.  One  entails  the  growing 
length of settlement by immigrants 
who arrived after 1970—and their 
burgeoning upward mobility, which 
is well under way. The other vector 
of change centers on the aging of 
the baby boom generation and the 
many changes it portends for the 
economy.  How  do  immigrants  fit 
into the overall picture of change 
in America?
in an Contributions
Aging America4   Summer 2008
U.S. Needs Are  
Changing Dramatically 
We cannot begin to gauge the value of immigrants 
until we better understand ourselves. In recent de-
bates, it seems that most Americans have judged 
immigrants relative to the needs of today, or even 
1980  or  1990.  Immigration  reform,  however,  is 
always about the decades ahead, and we need to 
make that the primary reference point.
Demography  holds  certain  advantages  over 
other forms of forecasting, especially in contentious 
political debates. Few can argue with the central 
premise  of  demographics—people  get  older  one 
year at a time. The baby boom generation, born 
in 1946 to 1964 and now 78 million strong has 
just begun to turn 62 this year and file for Social 
Security benefits. 
The broader magnitude of impacts from the 
aging  of  the  baby  boomers  is  not  well  appreci-
ated. In simple terms, one key ratio will dominate 
our nation’s economic affairs  over the next two 
decades. The number of seniors age 65 and older 
relative to prime-working-age adults, 25 to 64, is 
currently at about 240 per 1,000, a ratio that has 
held relatively constant since 1980. In the next two 
decades, however, that ratio is poised to climb by 
about 67 percent, reaching 411 seniors per 1,000 
working-age adults. In fact, no state in the nation 
will experience less than a 50 percent increase in 
the senior ratio. Connecticut and Rhode Island will 
experience an increase similar to the nation’s—65 
percent  and  67  percent,  respectively—but  the 
senior ratio in Massachusetts will grow by 70 per-
cent, and in northern New England it will soar by 
88 percent (New Hampshire), 93 percent (Maine), 
and 95 percent (Vermont). 
The rising ratio will throw out of balance every 
senior activity and demand that is different from 
the activities and demands of working-age adults. 
That includes retirement supports and health-care 
expenses, the entitlement issues that drive the fed-
eral fiscal scenario described as unsustainable by 
the  Government  Accountability  Office.2  Not  to 
be neglected are the effects on workforce growth, 
which the Bureau of Labor Statistics has projected 
to sink below 1 percent per year.3 Serious conse-
quences for GDP growth are emphasized in the 
2007  Economic  Report  of  the  President.4  Even 
with  an  expected  delayed  retirement,  the  retire-
ments of the baby boom generation are so massive 
that businesses will be hard pressed to find replace-
ments and economic growth will suffer.
Consequences for the housing market also are 
to be expected from the growing ratio of seniors 
to working-age adults. As troubled as we are today 
by the credit-induced downturn, the general expec-
tation is that there will be ample buyers in future 
years to float a recovery. Instead, my research docu-
ments the substantial risk of a generational housing 
bubble, when a larger number of seniors begins to 
sell off high-priced homes. In many states there are 
not likely to be sufficient numbers of young adults 
to absorb all the homes released by older sellers.5 
(This sell-off scenario differs from an earlier proph-
ecy that misjudged when it would start—at age 45, 
more than 20 years too soon.6) 
Can Immigrants Help? 
With baby boomers aging and a 67 percent surge 
in the ratio of seniors to working-age adults, many 
challenges lie ahead. Immigrants can help. Typical-
ly arriving as young adults, they and their children 
provide needed demographic reinforcements. But 
it takes time for them to settle in and begin to make 
their greatest contributions.
The drawback of increased immigration is said 
to be that immigrants are not sufficiently skilled 
to be of much assistance. In fact, polls show that 
more than half of Americans, both Democrats and 
Republicans,  assume  that  immigrants  are  more 
of a burden than a benefit.7 That is not the word 
from New York City, however, where immigrants 
are  recognized  for  helping  to  revitalize  the  city, 
and it may not be the perspective in south Florida   
In the next two  
decades, no state  
in the nation will  
experience less than  
a 50 percent increase 
in the ratio of seniors  
to prime-working- 
age adults.Communities & Banking    5
or California, other traditional areas of longtime 
immigrant settlement.8 The benefits of immigration 
often accrue after immigrants have time to settle in. 
In Los Angeles, 65 percent of immigrants have been 
residents more than 10 years, and many have been 
there 20 or 30 years. In contrast, in Atlanta or in 
Charlotte,  North  Carolina,  barely  36  percent  of 
immigrants have lived in the United States 10 years 
or longer.
The upward mobility of immigrants is not vis-
ible until they have been here a while. My analysis 
of  Latino  immigrants,  generally  among  the  least 
advantaged immigrants, shows tremendous rates of 
upward mobility. When they are newcomers, most 
speak English poorly and have few economic assets. 
In new destinations of immigrant settlement, that is 
what the locals see. They often assume that immi-
grants will remain like newcomers their whole lives. 
Not so, according to data from California, where 
immigrants  have  been  settling  since  the  1970s. 
Ability to speak English well advances from 33.4 
percent among those who are recently arrived to 
73.5  percent  among  immigrants  residing  in  the 
United States for more than 30 years. In the same 
time period, poverty rates decline from 28.7 percent 
to 11.8 percent.9 
Most  important  may  be  Latino  immigrants’ 
progress  into  homeownership.  Few  start  out  as 
homeowners,  but  in  California,  64.6  percent  of 
immigrants who have stayed more than 30 years are 
homeowners. Immigrants’ upward mobility is likely 
to make a vital economic contribution when the 
multitudes of baby boomers start selling off homes.
Immigrant children, like other minority youth, 
will have a major role to play in the coming decades. 
Their attendance in school today gives us an oppor-
tunity to help grow them into the new middle class 
of skilled workers, taxpayers, and home buyers. In 
previous decades it may not have seemed as urgent 
to develop this human capital, and some taxpayers 
have considered their schooling an unwanted fiscal 
burden. But now, with the aging of baby boomers, 
these children are looking like a resource to be cul-
tivated. It is they who will be relied upon to step up 
and help fill many empty shoes. 
The Resource  
Under Our Noses
The future of America will be formed at the inter-
section of two great demographic forces. With the 
inexorable aging into senior status of the giant baby 
boom generation, immigration may be the best way 
to get needed workers, taxpayers, and home buyers. 
Just how much reinforcement from immigration we 
will achieve is uncertain. The annual flow of new-
comers is subject to federal policy restrictions, while 
the quality of educational investment in immigrant 
children is subject to taxpayer decisions in each state 
and locality. The best thing to be done for America’s 
future is to think ahead and optimize the intersec-
tion between aging America and immigration.
Dowell Myers is a professor in the School of Policy,   
Planning,  and  Development  at  the  University  of 
Southern California.
Endnotes
1This  article  is  drawn  from  Dowell  Myers,  Immigrants  and 
Boomers:  Forging  a  New  Social  Contract  for  America  (New 
York: Russell Sage Foundation, 2007).
2See U.S. Government Accountability Office, “Fiscal Wake-up 
Tour,”  http://www.gao.gov/special.pubs/longterm/wakeuptour.
html;  also  “The  Nation’s  Long-Term  Fiscal  Outlook  August 
2007  Update,”  GAO-07-1261R,  http://www.gao.gov/special.
pubs/longterm.
3Mitra Toossi, “A new look at long-term labor force projections 
to  2050,”  Monthly  Labor  Review  (November  2006),  http://
www.bls.gov/opub/mlr/2006/11/art3full.pdf.
4Economic Report of the President (Washington, DC: United 
States  Government  Printing  Office,  2007),  http://www.gpo 
access.gov/eop/2007/2007_erp.pdf.
5First introduced in Myers, Immigrants and Boomers, chap. 11, 
state-by-state projections of the shortfall in young buyers relative 
to older sellers also appear in Dowell Myers and SungHo Ryu, 
“Aging Baby Boomers and the Generational Housing Bubble,” 
Journal of the American Planning Association 74, no.1 (winter 
2008).
6N. Gregory Mankiw and David Weil, “The baby boom, the 
baby bust, and the housing market,” Regional Science and Ur-
ban Economics 19, no. 2 (1989): 235-258.
7A 2007 poll by the Pew Research Center found that 51 percent 
of Democrats and 56 percent of Republicans agreed with the fol-
lowing statement: “Immigrants today are a burden on our coun-
try because they take our jobs, housing, and health care.” 
8Thomas  Muller,  Immigrants  and  the  American  City  (New 
York: New York University Press, 1993).
9These  data  are  from  analyses  reported  in  Immigrants  and 
Boomers, chap. 6, and are based on data from the Current Popu-
lation Survey and decennial census. The cited figures pertain to a 
cross-sectional comparison from 2000 or 2005. However, those 
findings are supported also by studies of poverty and homeown-
ership that trace the growing achievements of specific arrival co-
horts as they reside longer from 1970 or 1980 to 2000.
This Communities & Banking article is copyrighted by the 
Federal Reserve Bank of Boston. The views expressed are not 
necessarily those of the Bank or the Federal Reserve System. 
Copies of articles may be downloaded without cost at www.
bos.frb.org/commdev/c&b/index.htm.

Immigrants' contributions in an aging America

http://www.bostonfed.org/commdev/c&b/2008/summer/myers_immigrants_and_boomers.pdf

Immigrants' contributions in an aging America

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