I’m not sure why the thought of getting older is not often embraced, there are many positives to aging. You will have the freedom to play limitless hours of pickleball or any game that you choose upon retirement, enjoy senior discounts at your favorite restaurant, pick up a new language or musical instrument with more free time, and simply spend quality time with family and friends. You can pretty much live your best life during your senior years. Also, some may say that gray hair creates a distinguished look. Well, no matter what your stance is on aging, it happens to everyone in time. Which is why there will be a notable surge of Americans entering their golden years as baby boomers retire during the upcoming decade. In fact, this trend has already begun. The increase in retired seniors was cleverly labeled the “Silver Tsunami.”.
Today, Americans are collectively older than ever before with a median age of 38.9 years old in 2022. But, this number isn’t growing due to how Americans are living longer. Instead, our collective median age is rising because Americans are having fewer babies. This trend began near 1965 with the end of the baby boom. In tandem with fewer babies being born, the baby boom generation is gradually leaving the work force to enjoy the fruits of their labor. The dynamic of declining birth rates along with an aging work force is not unique to the United States as other countries face an even more startling demographic dilemma. For instance, the median ages for Italy, Germany, and Japan are correspondingly 47, 48, and 49. Japan’s seniors make up approximately 30% of its population. Aside from an aging populace, Japan’s child births fell below the population replacement rate (2.1) in 2021 to the alarming rate of 1.3. It’s important to note that, according to the United Nations research paper, “World Population Prospects 2022” high-income countries’ population growth between 2000 and 2020 was primarily fueled by international migration. Immigrants (80.5 million) surpassed the remainder of native births over deaths (66.2 million) by over 20% in these countries.
Immigrants have been an answer to population demographic dilemmas in the past. So, shouldn’t the U.S. strategy for the Silver Tsunami include immigration? Immigration can play a vital role in improving America’s ratio of workers to retirees while also supporting the retired baby boomers. The lack of available workers typically drives wages higher, leading to a rise in inflation. Fewer Americans will be paying taxes to support our social safety net while more will rely on Social Security and Medicare. Further, innovation and entrepreneurship can be affected by an aging workforce. A hike in a country’s median age of 3.5 years leads to a 2.5% dip in the entrepreneurship rate. A smaller workforce also lowers demand in consumer-driven industries such as housing. Overall, the economic impact of a declining workforce would be a less dynamic America.
Thankfully, the solution is right in front of us. The Pew Research Center concluded that immigrants and their children have buoyed the U.S. working age population since 2015. Today, nearly 78% of foreign-born individuals in the United States are of working age compared to only 59% of the native-born population. While both numbers are predicted to drop within the next decade, the gap is expected to remain fairly constant – lowering to 72% and 56% respectively in 2030.
Aside from introducing younger employees to the workforce, immigrants also create jobs for others. They created start-up business at nearly double the rate of native-born Americans in 2020. Over 50 percent of American startups worth $1 billion or more were founded by at least one immigrant of American startups worth $1 billion or more were founded by at least one immigrant. These companies have a collective value of $248 billion and each company creates an average of 1,200 jobs, with the majority of these jobs being in the United States. Moreover, start-up companies create an average of three million net new jobs nationally per year, which is over four times as many jobs as mature companies.
Immigrants can enhance the Social Security trust fund as well. The program’s trustees approximate that for every additional 100,000 immigrants, Social Security’s actuarial balance increases by .08% of taxable payroll. Similarly, increasing immigration can expand Medicare’s actuarial balance across the next few decades.
Enhanced access to immigrant workers can also have a profound impact our national healthcare system. To take but one example, the availability of immigrant health care workers can alter what medical care options are accessible. It also influences the quality of care for seniors. A 2021 study revealed that Americans aged 65 or older are less likely to live in an institutional setting if the surrounding community has a higher proportion of working age immigrants willing to provide home healthcare services. For certain areas of the United States, the choice of aging at home or receiving institutional care hinges on what the community workforce entails. Immigrants make up a disproportionate number of home healthcare employees, accounting for 28% of home health workers while only representing 17% of the workforce at large. Over 75% of seniors wish to reside in their own homes rather than aging in health care facilities. Many U.S. communities, however, do not have enough healthcare workers to accomplish this.
As immigrants continue to take on vital health care related positions, start and expand businesses, enhance our Social Security trust fund, and improve the ratio of workers to retirees, we need policymakers to recognize how immigration can serve as a dynamic strategy for the Silver Tsunami. Creating streamlined and faster paths to U.S. citizenship for immigrant direct care workers can assist with reducing the labor shortage. Increasing the number of available immigrant visas and nonimmigrant visas (i.e., the H-1B visa) would also help communities with replacing retirees in the workforce. Such an increase in workers will reciprocally support tax bases and the Social Security trust fund. Also, passing a start-up visa option could attract immigrant entrepreneurs to the United States for the purpose of opening businesses and creating jobs. Right now, these aspiring entrepreneurs do not have a way to complete this objective without satisfying myriad stringent criteria. Due to the academic backgrounds of many international students, attracting and retaining immigrant entrepreneurs can also supplement efforts to increase America’s collective STEM talent.
All of these proposed reforms can help our country adapt and excel during any future Silver Tsunami. With the correlated factors of a significant wave of seniors entering retirement and a rising U.S. median age, immigration reform is a proactive way to stabilize the workforce and fill important and needed positions in the health care and other fields. Immigrants have ameliorated worker shortages in the past and the United States has benefited as a result. In light of this, immigrants should be a critical component of U.S. strategy to react to the Silver Tsunami and ensure our Golden Years are ones of shared prosperity, and maybe even some pickleball.