Immigration is saving Michigan from population loss, but state falls far behind national averages

Immigrants are helping buoy Michigan from population decline as the state struggles to add new residents.

The 2020 census placed Michigan near dead last in the country for population growth during the last decade, enough to lose a seat in Congress. Experts say Michigan desperately needs to add residents to prevent an erosion of political power and economic growth, which makes adding new immigrants an attractive solution to stave off population declines.

“We are on a line towards lower native-born population growth, and immigration is going to be the variable that determines whether we grow at all or how quickly we decline,” said Kenan Fikri, a researcher at the Economic Innovation Group who studies the effects of population decline.

Stagnant population growth nationwide is concerning economists who are tracking labor shortages and the looming loss of working-age people to retirement.

In the next decade, the Census Bureau estimates that one in five U.S. residents will be of retirement age. By 2030, older people are projected to outnumber children for the first time in U.S. history. Net international migration is also projected to become the primary driver of population growth for the first time.

Fikri, who works for an economic think tank based in Washington, D.C., said encouraging immigration has high potential to replenish the supply of skilled workers and be a catalyst for struggling communities. Immigrants are twice as likely to start new businesses than U.S.-born residents. A wealth of research suggests immigrants have a high rate of employment and have an overall positive contribution to the U.S. economy.

Michigan’s 700,925 foreign-born residents are more educated on average and hold a higher share of advanced degrees in science, technology, engineering and math fields. The Office of Global Michigan, an office within the state labor department, considers immigrants as an asset for the state economy. A 2017 report recommended more support for programs that improve outcomes for Michigan’s foreign-born population, arguing it would help address labor supply issues.

Reynolds Farley, a University of Michigan professor who studies population trends, said immigration is also dampening population losses. Michigan experienced a net increase of 193,691 people since 2010. Meanwhile, the state added 201,218 new immigrants in the last decade.

Census Bureau estimates show 7% of Michigan’s residents were born in another country, below the national average of 13.7% in 2019. The state is home to 10 million people total.

Though foreign-born residents only represent a small fraction of Michigan’s overall population, immigration is helping boost growth in particular communities. Farley points to Hamtramck, a small city geographically surrounded by Detroit, as a clear example.

Like Detroit, Hamtramck had been losing population at a high rate since the 1950s. However, the city grew by 27% in the last decade. Farley said the reversal is mostly due to immigrants from Yemen and Bangladesh.

There are many downsides to stagnant population growth. Fikri said communities can become trapped in a cycle of decline that sinks home values, shrinks local tax bases, drops spending on infrastructure and public schools and eliminates opportunities to attract business.

Trump-era policies and the COVID-19 pandemic caused immigration rates to drop during the last four years. Census data shows net international migration to Michigan declined from 21,372 in 2017 to 7,753 in 2020.

Former President Donald Trump’s White House pursued several strategies to limit immigration, including a controversial ban on travel from Muslim-majority countries, reducing work visas and restricting the amount of time international students can spend in the U.S. Trump also set stricter standards for legal immigration applicants.

“The demographic picture facing the country today has only gotten dimmer,” Fikri said. “With the pandemic, population growth rates fell to their lowest ever, birth rates are at their lowest ever and international immigration has significantly dried up.”

Business development organizations are encouraged by new federal efforts to reverse the previous administration’s immigration policies. The Great Lakes Metro Chambers Coalition, which represents economic groups from across Michigan and other neighboring states, encouraged recruiting highly-skilled immigrants as “a vital step for growth and prosperity.”

“There’s notoriously few policy levers that the government has to affect demographics, except immigration,” Fikri said. “Immigration is a flow that policymakers can turn on and off. Now is an important time to consider turning it back on in a big way.”

Glenn Stevens, executive director of the Detroit Regional Chamber’s MICHauto program, said business executives are looking outside the U.S. to recruit talent, especially in high-tech industries. Executives are closely watching population trends that could hamper their growth, he said.

“You’ve got a maturing workforce, you have a declining number of high school graduates and we are very low when it comes to net migration as a state,” Stevens said. “Those things adding up is not a good equation for us.”

Policies aimed at curbing immigration have largely centered on preserving opportunities for Americans. But Stevens said the math shows a dearth of available domestic workers. Michigan needs more, not fewer people to fill jobs in key industries, he said.

Steve Tobocman, executive director of Global Detroit, an economic development group focused on strategies for employing immigrants and international students, said rural areas in the Midwest are simply losing too many working age residents.

Nine out of 10 Michigan residents lived in a county where the population of prime working age people dropped from 2007 to 2017, according to the Economic Innovation Group. Only five Michigan counties – Kent, Ottawa, Isabella, Clinton and Kalamazoo — saw an increase in residents between the ages of 25 and 54, considered the prime working population.

Census data shows 50 of Michigan’s 83 counties lost residents in the last decade. Those counties lost a total of 109,771 residents, which represents the entire population of Livonia.

“This has huge implications for our workforce needs, for our tax structure,” Tobocman said. “This is the graying and aging of our labor force.”

Stevens said the focus should be making sure Michigan residents have access to opportunity, while also bringing in new blood.

“Making sure that the young people of Michigan get the base level education, the advanced degrees and the high-tech trade skills they need to work in the factories of today: That’s job number one,” Stevens said. “The other thing is we need to bring people to Michigan.

“That’s people from other states and people from other countries. That’s what built the state and is what’s going to build this industry for the future.”