No longer immigrating to the United States? U.S. international net immigration hits record low for ten years
Recently, according to reports, some economists predict that immigration may help Canada's economic growth this year rank among the top of the G7 (G7) and compete with the United States for the top spot.
U.S. and Canadian immigration trends are inconsistent. According to data from the United States Census Bureau, net international immigration in the United States has declined for the third consecutive year in 2019, to 10.95 million, the lowest level in nearly a decade.
According to William Frey, a statistician at the Brookings Institution in the United States, as the birth rate in the United States declines, this will reduce the annual population growth rate to the lowest level in a century.
In contrast, although Canada's population is only one-tenth that of the United States, net international immigration increased by 437,000 last year, which is 40% of the size of net international immigration in the United States. Because of this, Canada has ushered in the fastest population growth in nearly 30 years even with the decline in fertility.
Since 2015, the number of new immigrants in Canada has more than doubled year-on-year, while the number of international net immigrants in the United States has fallen by almost half. In 2019, the U.S. population will grow by 0.5%, only 1/3 of the Canadian population growth rate.
The US Census Bureau believes that the slowdown in the growth of the US population is not only because fewer foreigners are entering the United States, but more foreigners are leaving the United States. In addition, the number of Puerto Rican migrants has begun to decline.
Puerto Rico became the 51st U.S. state in June 2017. Previously, the number of net immigrants from this state to the other 50 U.S. states and the District of Columbia rose from 78,000 in 2017 to 123,000 in 2018, but during 2019 Puerto Rico achieved a net inflow of 8,000 people.
Bloomberg commented that US President Trump is adopting stricter immigration policies to curb the willingness of foreign students and workers to immigrate, while neighbors in the north are benefiting.
Canada's economic growth may leap to the top of the G7. In fact, the factors driving economic growth in the United States and Canada are very different. At present, both countries are facing population aging trends. Canada has increased its output through the introduction of large numbers of immigrants, while the United States is more inclined to use local labor and increase productivity.
At present, it remains to be seen which development model will win in 2020. But what is certain is that the surge in immigration-led population like Canada is one of the few bright spots in the world's major economies. Both the labor market and the housing market will benefit from it.
So how important is immigration to Canada?
Data show that in 2019, Canada's labor productivity increased by 0.6% year-on-year, while the US's growth rate was 1.5%. In other words, if there is no increase in immigration, weak productivity will slow Canadian economic growth significantly.
Economists surveyed by Bloomberg are more inclined to the "American model", giving them a growth rate of 1.8% in 2020, compared with 1.6% in Canada. However, the predicted growth rates of these two countries are much higher than the other five countries.
▲ Source: Bloomberg, but Doug Porter, chief economist at Bank of Montreal in Canada, believes that with the strong population growth (a year-on-year increase of 1.5%), Canada ’s overall economic growth rate is particularly determined by the US-Mexico-Canada Three Countries Agreement (USMCA) This year, he may easily jump over the United States to take the top spot.
Coincidentally, the recently released World Economic League Table (2019) points out that Canada's GDP in 2019 was 1.731 trillion US dollars, returning to the world's tenth largest economy. And there is still room for growth in the next decade, some of which will be driven by immigration.
In fact, the British Centre for Economics and Business, which published the list, predicted that Canada would fall out of the top ten in the world a few years ago, but in the forecast report released at the end of 2019, it was a completely different picture.
According to the report, Canada's economy is expected to rise to ninth in the world by 2024 and to eighth in 2029. "Countries that successfully attract skilled migrants tend to grow faster."
Finally, the report details several factors that could affect Canada's economy, including high unemployment, the obstacles that minority governments may face in implementing the agenda, and the federal debt burden.
In 2019, Canada's unemployment rate is stable at 5.7%, which is one of the important reasons affecting consumer spending and economic growth. Politically, the Liberal Party of Canadian Prime Minister Trudeau, who took office in October 2019, is currently leading a minority government and may face a series of challenges when implementing policies. In addition, although the proportion of Canadian government debt to GDP in 2019 dropped from 89.9% in 2018 to 87.5%, it still needs to fall to a more sustainable level.