Foreign Workers Are Vital Part of US Labor Force

Foreign-born migrants have represented an essential part of the U.S. workforce for a very long time and are poised to drive economic sustainability going forward. 

“It is well known that certain states, industries, and occupational groups are particularly reliant on the labor supplied by foreign-born migrants; however, the more compelling finding may be the fact that there are very few parts of the U.S. workforce in which foreign-born people do not make substantial contributions,” said Justin Ladner, labor economist at SHRM. 

Ladner analyzed data from the U.S. government’s Current Population Survey and American Community Survey to examine the role of foreign-born people in the U.S. labor force.  

“Given rapid aging in the domestic population and a persistent labor shortage that predates the pandemic, it seems likely that the contributions of foreign-born workers will only grow as U.S. employers cast an increasingly wide net to find the skilled workers they need to be competitive in the global economy,” Ladner said. 

Here are five key takeaways from the report titled The Role of Foreign-Born People in the U.S. Labor Force.   

1 in 5 Is Foreign-Born

Nearly 20% of the U.S. labor force are immigrant workers due to strong growth in the foreign-born population and the comparatively high labor force participation rate of this population.  

The immigrant portion of the U.S. labor force was about 12.4% at the dawn of the millennium but has risen rapidly since then, reaching 19.2% in October 2024. 

“The native-born population is going through a demographic transition where people are living longer, and people are having fewer children,” Ladner said. “Population aging has become very pronounced now that the Baby Boom generation is entering their retirement-age years. Labor force participation among older people has not been enough to offset the fact that such a big part of the population is moving into that 65-plus category. Immigrant labor has allowed the labor supply to continue growing.” 

Without immigrant workers, the U.S. labor shortage would be much exacerbated, Ladner said.  

“One of the levers for resolving the labor shortage issue is to find new labor from immigrant flows,” he said. “The vast majority of people who immigrate to the U.S. do so to work and are a key source of labor supply, particularly in certain occupations and industries.” 

21st Century Boom 

The population of immigrants and immigrant workers has nearly doubled since the start of the 21st century. 

As of October 2024, there were about 48.5 million foreign-born people ages 16 and older living in the U.S., including 32.4 million people in the labor force. In December 1999, there were 26.1 million foreign-born people ages 16 and older living in the U.S., including 17.3 million labor force participants. 

The immigrant population in the U.S. has been growing continuously for decades, despite brief slowdowns and declines during significant economic downturns and disruptions, such as the 2007-2009 Great Recession and the height of the COVID-19 pandemic in 2020.  

“Broadly speaking, immigration decisions are a combination of push and pull factors,” Ladner said. “The pull factor for the U.S. has always been that it is a healthy, dynamic labor market with lots of opportunities for people from foreign countries. The U.S. is an enticing place to come to for work. There are a lot of jobs, and the pay is relatively high.” 

Push factors tend to include poor economic conditions in the migrant’s home country, in addition to unstable political conditions, as seen in Haiti and Venezuela in recent years.    

SHRM’s analysis found that immigrant growth has been especially strong since the COVID-19 pandemic receded. The foreign-born labor force surged by nearly 5 million people between January 2021 and October 2024. 

Some of that growth is due to economic and political strife in Latin American countries during those years while the U.S. economy remained strong, but there has also been pent-up demand, Ladner said.     

“Natural movement was bottled up during the pandemic when borders were shut down and the jobs that people were migrating for were temporarily unavailable,” he said. “That valve was switched off for a period of time and then was opened back up.” 

Immigrants More Likely to Work 

Native-born and foreign-born labor force participation rates have been diverging since the start of the 21st century, while unemployment rates for the two groups have remained similar.   

Native-born labor force participation has fallen steadily from 66.7% in 2000 to 61.7% in 2024, while the foreign-born rate increased slightly during that time, from 66.7% to 66.8%. 

“Although several factors likely play a role in these divergent rates, one key issue is that the native-born population has aged steadily in the 21st century,” Ladner said. “In contrast, aging among foreign-born residents has been dampened by a constant influx of comparatively young migrants. For this reason, immigration is often discussed as a critical tool for meeting labor demand as the U.S. population continues to age.” 

Meanwhile, the unemployment rates for the two populations have typically been similar but currently sit at 4.6% for the foreign-born population and 4.3% for the native population. 

Range of Occupations 

Immigrant workers make up at least 25% of employment in four major occupational groups: 

• Building/grounds cleaning/maintenance (39.8%).  
• Farming/forestry (38.5%). 
• Construction/extraction (34.3%). 
• Computer/mathematical (26.7%). 

Ladner pointed out that, although some occupational characteristics appear correlated with foreign-born representation, such as manual labor, foreign-born workers are well represented in occupational groups with highly disparate skill sets. 

“For example, the representation of foreign-born workers is just under 24% in production, food preparation/serving, and health care support, despite the fact that these groups differ markedly from one another in a wide variety of ways,” he said.  

While foreign-born representation does tend to be especially high in industries that require a high degree of manual or routinized labor, Ladner added, immigrants account for at least 10% of workers in every major industry. 

Poles of Education

One key difference between foreign-born workers and their native-born counterparts relates to educational attainment.  

On average, the foreign-born labor force (ages 25 and older) is far more likely to have less than a high school education and far less likely to have any level of undergraduate education, up to and including a bachelor’s degree. Paradoxically, the foreign-born population is also notably more likely to have a graduate or professional degree.  

In other words, relative to the native-born U.S. population, foreign-born workers are more likely to lie at the extreme ends of the educational spectrum. 

“There are the types of occupations we associate with immigrant labor — jobs with a high emphasis on manual labor and few educational barriers to enter into,” Ladner said. “However, it is also true that foreign-born workers are attaining high levels of education and working in technology, mathematics, and the sciences. Big tech companies hire these workers, and universities bring them in as researchers, professors, and scientists. It shows that the motives to come to the U.S. for work are varied, and the set of people involved are similarly diverse.”