Immigrants may become more important to work force as boomers retire

Posted: Friday, April 30, 2004

NEW YORK (AP) Born in Calcutta, not far from where Mother Teresa ministered to India's needy, Saswati Koya understands poverty. But she never imagined there were American neighborhoods as poor as the one where she now teaches high school.

''My image of America was of bright lights, the typical downtown idea, you know, something glitzy,'' said Koya, who was recruited in 2000 to teach science on Chicago's South Side. ''But you soon see that students are pretty much the same everywhere.''

Koya, who holds a master's degree in zoology, is one of a small but growing number of foreign-born teachers in U.S. public schools, and may be on the vanguard of a broader trend. As baby boomers people born between 1946 and 1964 start to retire in large numbers, experts say highly educated immigrants like her could become much more important to the U.S. labor market.

''All these baby boomers are going to be leaving these jobs at once, and increasingly we're going to rely on foreign born workers to fill them,'' said Paul Harrington, an economist with Northeastern University's Center for Labor Market Studies.

The millions of immigrant workers will be crucial in another way too: If they provide enough of a boost to the taxable wage base, it could help extend the viability of sorely stretched social programs that retired boomers will be counting on in their old age.

If nothing changes, current government projections show that by 2019, Medicare will be broke and the Social Security system will begin paying out more in benefits than it collects in taxes. The Social Security Trust Fund will be exhausted by 2042.

The crisis is being driven in large part by boomer demographics. By 2050, the Census projects there will be 87 million people over age 65, compared to 35 million in 2000. Of those, 20 million will be over the age of 85, compared to just 4 million in 2000.

But immigration isn't a panacea.

While new arrivals might help expand the wage base, that alone isn't enough to save Social Security and Medicare, said Laurence J. Kotlikoff, a Boston University economist and co-author of ''The Coming Generational Storm,'' an examination of the fiscal problems America will face as boomers retire.

''These very-old old people are going to be very expensive to take care of,'' Kotlikoff said. ''I could see a collapse of our fiscal system just because the demands for health care benefits are going to be so high.''

And while foreign born workers will help replace baby boomers, it's not clear how much more immigration can rise. In terms of absolute numbers, immigration is currently at record highs. Foreign-born workers accounted for almost half of U.S. labor market growth in the 1990s, up sharply from just 10 percent in the 1970s and 25 percent in the 1980s, according to the U.S. Census Bureau. The largest numbers come from Mexico, the Philippines, India and China.

Immigrant workers do pump up the tax base, but not as much as you'd think, Kotlikoff said. Unless they're very highly skilled, they can't generate enough taxes to outweigh the costs of the services they use, such as welfare, emergency medical care and public education.

To counter this, economists suggest U.S. immigration policy will need to be adjusted in the coming decades. Currently the policy is focused largely on family reunification meaning people are more likely to be granted residency status if they have relatives here instead of skill level, which many other developed countries take into account.

''We are moving toward a situation that will require a hard, cold look at how our labor force needs will be stratified,'' said William Frey, a demographer with the Brookings Institution. ''I think we'll continue to have immigration, but we may pay more attention to the skill level and aptitude of those coming in than we do right now.''

The teaching profession is a case in point. With many boomer teachers nearing the end of their careers, it may become increasingly difficult for the nation's public schools to fill a projected 2 million vacancies over the next decade. In addition to stepping up domestic recruitment efforts, urban districts like Chicago have sought foreign-born workers for hard-to-fill math, science and language posts.

Those programs have a downside too: Teachers from abroad often work under temporary visas, renewable only up to six years, which have become more difficult to get since the Sept. 11 attacks. Koya, the Chicago science teacher, is working to attain permanent residency so she can keep her job, but she's unusual.

''No matter where the people come from, if you have a situation like you do today, where 50 percent of the people leave within 5 years, you have a problem,'' said Melinda Anderson, spokeswoman for the National Education Association. ''It's kind of short term fix. It's like using a Band-Aid on a hemorrhage. Sometimes you have to do surgery.''

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