Excellent commentary by Johann Harnoss of the Boston Consulting Group. In immigrating to the United States, he is one of many arriving. Obviously, Johann has an excellent background for BCG to pick him up. I did some sponsoring of newly arrived employees for a couple of companies. My point to this is immigrants coming to America are the largest source of population growth. Without population growth, the nation will have issues with a shortages of Labor. The #1 source of U.S. population growth? Immigrants like me by Johann Harnoss Linked In January 17, 2024 This week, my family and I are moving to the U.S. It’s a journey full of excitement, mixed with moments of anxiety about what’s to come. We will soon become 5 of the about 10,000
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Excellent commentary by Johann Harnoss of the Boston Consulting Group. In immigrating to the United States, he is one of many arriving. Obviously, Johann has an excellent background for BCG to pick him up. I did some sponsoring of newly arrived employees for a couple of companies. My point to this is immigrants coming to America are the largest source of population growth. Without population growth, the nation will have issues with a shortages of Labor.
The #1 source of U.S. population growth? Immigrants like me
by Johann Harnoss
Linked In
January 17, 2024
This week, my family and I are moving to the U.S. It’s a journey full of excitement, mixed with moments of anxiety about what’s to come.
We will soon become 5 of the about 10,000 Germans that settle in the U.S. every year, and part of 2 million people from around the world to do so.
As someone interested in all thing’s migration, I was naturally inclined to put my own experience in the broader scope of U.S. immigration trends.
My quick weekend analysis of US Census data revealed a few basic insights:
1) The facts
- US Population: Out of 330 million residents, about 10 million moved last year, with 8 million moving state-to-state and 2 million from overseas.
- International Migrants: These 2 million international migrants are just 0.6% of the U.S. population, but they account for a whopping 70% of the U.S. population growth.
- In a post-COVID rebound, the number of international arrivals in 2023 surged by about 50% compared to pre-2022 levels.
Immigration is the #1 population growth driver for the U.S.
- All 51 U.S. jurisdictions (50 States and the District of Columbia) are net immigration gainers, getting more international immigrants than go abroad.
- In 42 U.S. States, international migration exceeds ‘natural change’ (that is, the number of births over deaths).
- For 24 U.S. States, international migration is the #1 population growth driver, higher than ‘natural change’ and domestic migration.
- 4 U.S. States are shrinking already and would shrink even more if not for international immigration – e.g. Illinois, West Virginia, and New York.
13 U.S. States would be shrinking without immigration
So much for the basic facts. Let’s dive in a bit deeper:
- Domestic flows are ~4x higher than those 2 million international workers. But both tend to move in tandem.
- Here is where it gets interesting: Domestic flows correlate much more positively with state-level GDP growth and the EIG’s economic dynamism scores than international flows.
- Meanwhile, international flows are very concentrated: 5 States (CA, FL, TX, NY, NJ) capture nearly half of all (gross) inflows – but another 18 States grow by >10K international talents every year.
My main impression: International migrants may not always go where they are needed the most. Or put another way…
Not all fast-growing U.S. States manage to attract the international talent they need.
2) U.S. States: Who’s leading (and who is not)?
So, how are the U.S. States doing when it comes to attracting international talent? I put together a simple table that ranks U.S. states by their ability to attract domestic flows, and then looks at their relative success when it comes to attracting internationals.
Florida comes out #1 for domestic and international inflows, but there are a few notable States that do better on domestic rather than international. These U.S. states, you can argue, are underperforming relative to their revealed potential. They are highlighted in green in Chart 1: NC, GA, AZ, PA, CO, TN, SC, MI, IN, CT, AL, OR, NE.
NC and AZ are two recent first-round recipients of U.S. Chips & Sciences Act funding who show some clear potential to not just develop their local workforces but also add to their talent pools from abroad.
In this, admittedly, really simple back-of-the-envelope calculation, all these 13 U.S. states together could add +275K more international people – if they were as attractive to internationals as they are to locals. But it’s not just these 13 States, the U.S. overall needs workers.
3) What universities, cities & companies can do
One recurring finding in my work on migration is that:
Firms, universities, innovation hubs, and States can do quite a lot to attract international talent – and don’t need to ask the federal government for permission, or visa changes.
Here is how: Universities have certain privileges over firms. They can use them to help innovation hubs & and cities around them thrive and generate revenue from it. University leaders can do three things:
- Set up a Global Entrepreneur-In-Residence Program. Did you know that universities can help firms hire from a pool of uncapped highly skilled H1-B talents? All that is needed is a small (often already existing) HR team at the university that makes the university act as a sponsor for an H1-B visa application. Since these visas are uncapped, there is no H1-B lottery for firms to enter, and thus much higher likelihood of success. H1-B visas will be oversubscribed nearly by 10x in 2023/2024. These won’t be. What’s great about this is that the universities can act as sponsors, but the talent works and gets paid by a firm. That’s a great way to provide value to an entrepreneurship cluster of firms around a university. The University of Massachusetts has set up such a program, and through it has created more than 1B of value for the local economy, as well as more than 1600 jobs.
- Be a sponsor for an early career STEM research talent. Did you know that STEM students can stay in the country for up to 5 years, if the university acts as a sponsor? All that is needed is a firm willing to employ the student at prevailing market rates in a research or innovation capacity. Universities, affiliated institutes or research centers can also act as “interested government agencies” to waive any return-to-home requirements some of these students will face.
- Support firm-level visa processes for highly skilled talent (O-1, EB-1 and EB-2/NIW categories). Unlike standard H1-B, these visa categories are uncapped and allow highly skilled talent to enter the US. However, they rely on quality references from credible parties that show a candidate’s competence. Note: These categories are not irrelevant. Successful O1-A and EB-2-NIW topped nearly 85,000 in 2023, that’s roughly the same number as the H1-B visas granted in that period. Universities and their professors could help a lot by easing the way for talent to get access to these visas.
Cities and Innovation Hubs often look for ways to add value to their economic clusters. Supporting firms with their talent needs is such an activity. Here is what they can do:
- Nudge universities in their jurisdiction to act as sponsors for H1-B and J-1 talent, by potentially even incentivizing this activity which ultimately drives tax income & and significant federal funds (e.g. Medicare, Medicaid). Population growth is revenue.
- Set up a small team, possibly co-funded by the business community, to help market, attract, hire, and retain top talent in the city – irrespective of where they are from. The city of Berlin, Germany, has set up such a team – it’s seen as the #1 way the city adds value to the business community.
The above list is just a start. Not every global talent will come to the U.S. through these pathways, but in the right political environment, many more could.
On my side, I am fortunate that I didn’t have to wait for these initiatives above; my company, the Boston Consulting Group (BCG) sponsored my intercompany transfer visa (L-1). Many highly skilled global talents don’t have that opportunity, putting the deployment of the U.S. Chips & Sciences Act and IRA at risk.
U.S. States, Cities, Innovation Hubs, and universities have the tools in their hands to drive fiscal revenue, business activity, and innovation – if they collaborate well.
Time to get started.
Acknowledgments: I have relied heavily on the work of others for the above, especially the US Census, and American Community Survey as data providers, and the smart folks at various places like the Institute for Progress (IFP)‘s Amy Nice, Jeremy Neufeld, Lindsay Milliken, Economic Innovation Group‘s Adam Ozimek and Connor O’Brien, The Center for Growth and Opportunity at Utah State University‘s Josh Smith, Bidjan Nashat, Schmidt Futures‘ Julia Garayo Willemyns, Cato Institute‘s Alex Nowrasteh and Labor Mobility Partnerships (LaMP)‘s Rebekah Smith.
Special shout out to Craig Montuori who has done terrific work on seeding the first Global EIR programs in the U.S. The data above do not allow for specific cuts by the level of education, legal status, or industry. All errors remain my own.