The Competition Your Grandfather Never Faced

In 1960, one paycheck from a factory job could support a family of five. The worker owned his house and retired with a pension. A single income was enough to reach the middle class, and for most families it was the norm.^[4]

Sixty-five years later, that arrangement is gone. Two incomes are the baseline for a middle-class household, and in the most expensive metros two incomes still fall short. The change has many causes. One of them is that the American worker now competes in a labor pool nearly two and a half times larger, and a far larger share of it arrived from abroad.

The Pool Grew Faster Than the Country

In 1960, the civilian labor force numbered about 70 million. By 2024 it had grown to about 168 million.^[3] The population grew over the same period, but the labor force grew faster, and immigration supplied much of the difference. Since 1990 alone, the country added roughly 32 million foreign-born residents.^[9]

In 1970, the foreign-born were 4.7% of the U.S. population, the lowest share on record.^[2] By 2024, the foreign-born were 19.2% of the labor force, nearly one worker in five.^[1] Immigrants cluster in the working ages, so their share of the workforce runs higher than their share of the population. A worker who competed against a nearly all native-born pool in 1960 now competes against one in which almost a fifth of the workers were born abroad.

A larger labor pool, whatever its makeup, gives employers more room to hold wages down. Every additional worker in a field is another bid for the same jobs.

The clearest way to see how much the competition changed is to count foreign-born workers against American-born ones. In 2005 there were 17 foreign-born workers in the labor force for every 100 born here. In 2025 there are 24.^[10] Over those two decades the American-born workforce grew 6.7%, from 127.3 million to 135.8 million. The foreign-born workforce grew 46.4%, from 22.0 million to 32.3 million. Of the 18.8 million people added to the labor force, 10.3 million were born abroad.^[10]

Which Jobs Take the Pressure

The competition does not fall evenly across the economy, and the pattern runs opposite to the way the program is usually defended.

Foreign-born workers are 19.2% of everyone employed. In natural resources, construction and maintenance they are 28.5% of the workforce. In service occupations, 24.4%. In production, transportation and material moving, the factory floors and warehouses and truck cabs, 23.9%. In management and professional work, the category that the case for high-skill immigration rests on, they are 16.2%, below their share of the workforce as a whole.^[11]

Among men the construction figure is starker still. In 2025, 21.9% of employed foreign-born men worked in natural resources, construction and maintenance, against 14.2% of native-born men.^[11]

Geography compounds it. The foreign born are 24.5% of the labor force in the West and 22.7% in the Northeast, against 10.8% in the Midwest.^[11] A carpenter in Los Angeles and a carpenter in Ohio are not working in the same labor market.

The professional end is not untouched, it is concentrated. USCIS approved 406,348 H-1B petitions in 2025, and 62% of them went into computer-related occupations, with systems analysis and programming alone accounting for half of all approvals.^[12] The pressure that spreads thinly across management and professional work as a whole lands hard on one set of desks.

The Leverage Went With It

The single-income era was also the high-wage era. Real wages for the typical worker rose almost without interruption from the mid-1920s through the early 1970s.^[6] Median family income roughly doubled between 1947 and 1973, and the gains reached the whole income distribution, not just the top.^[5]

The reason was scarcity. That stretch ran inside the 1924-to-1965 immigration restriction. Congress had cut annual admissions about 80% in 1924 and held them low for four decades, and the labor force grew at roughly the native birth rate. When workers are scarce, the employer is the one who has to compete. A plant that needed a hundred more hands could not import them. It had to raise the wage until American workers took the jobs, or watch a competitor hire them first.

That is where the paycheck came from. A worker could walk into a factory knowing the factory needed him more than he needed that particular factory, and the wage reflected it. The scarcity bargained even for workers who never asked for a raise, because the going rate was set by employers bidding against one another for a pool that grew slowly. A growing economy split its gains with the people who produced them, because the people who produced them could not be easily replaced. That leverage is what a single paycheck rested on.

The trend reversed after 1970. Real pay for the typical worker flattened and has barely moved since.^[6] The 1965 Hart-Celler Act and the 1990 Immigration Act reopened high-volume admission, and the labor pool began growing far faster than the native birth rate. The employer who needed a hundred more workers now had a deeper pool to draw from, and the pressure to raise wages eased.

The Other Causes

Immigration is not the only reason wages stalled and one income stopped being enough. Millions of women entered the workforce, at first through expanding opportunity and later, for many households, through necessity as one paycheck bought less. Automation replaced factory jobs.

And a large share of the work left the country. Manufacturing employment peaked at 19.4 million in 1979. It was still 17.3 million in 2000. By 2010 it was 11.5 million, a loss of 5.8 million jobs in the decade that followed China's entry into the World Trade Organization. It stands at 12.8 million today, 6.6 million below the peak.^[13] The worker who lost one of those jobs did not face a foreign competitor at home. The job itself moved to the competitor.

The two pressures work on the same person from opposite directions. Offshoring removes the jobs that can be done anywhere. Immigration raises the number of bidders for the jobs that cannot, which is why the foreign-born share is highest in construction, food service and delivery, the work that has to be done where the customer is.

Each of those moved wages independently of immigration. Immigration is the one Congress sets directly. Congress cannot legislate away automation or foreign competition. It sets the number of workers admitted each year, and since 1990 it has set that number high.

The Contest Is Not Only for Jobs

The competition reaches past the paycheck, and it does not fall on everyone. In the parts of the country that immigration passed over, a single income still stretches. A worker in a small city in the Midwest or the South, where the population grew slowly and housing kept pace, can still buy a house on one paycheck and raise a family on it. The squeeze is concentrated where the newcomers landed. The 20 metros that took in the most immigrants after 1990 are the same metros where housing pulled out of reach.^[9]

Housing is the largest cost a family carries, and it is the one that moved the most. The national home price-to-income ratio rose from about 3.0 in 1990 to 5.6 in 2024.^[7] Median rent rose about 28% after inflation over the same period. A house that cost three years of household income now costs almost six.

The worker of 1960 bid for a house against local buyers. The worker of 2025 bids against a metro that added hundreds of thousands of new residents and did not build enough housing to hold prices down. Where that did not happen, in the low-immigration interior, the old arrangement mostly held. Schools, emergency rooms, and entry-level jobs face the same arithmetic. More people competing for a fixed supply raises the price of all of it.

Who Captured the Difference

The economists who study immigration have measured where the money moves. George Borjas of Harvard calculates that immigration produces a small net gain to the economy, about 0.3% of GDP, alongside a large transfer inside it. Roughly $500 billion a year shifts from workers who compete with immigrants to the employers who hire them.^[8] The 2017 National Academy of Sciences study found the same pattern.

The $500 billion is not lost to the economy. It moves from the people bidding for jobs to the people hiring for them, which is why the aggregate figure can look small while the effect on any one worker's wage does not.

Cutting the Number Again

The world the worker's grandparents lived in was the product of a policy choice. Congress cut immigration in 1924 and held it low for 41 years, and the American worker held the strongest bargaining position in the country's history. Congress reversed that choice in 1965 and again in 1990.

Congress can cut the number again. Lowering annual admissions and holding them there would slow the growth of the labor pool back toward the native birth rate and return bargaining power to the worker, the same way the 1924 cut did for four decades.

Recommendations

1. Replace the Immigration Act of 1990 and cut annual admissions by at least half, toward the pre-1965 level of about 200,000 a year, to slow the growth of the labor pool.
2. Replace the H-1B with an exceptional-talent visa capped under 10,000 a year and end the Optional Practical Training program, removing the channels that expand the professional labor supply at below-market wages.
3. Narrow family migration to spouses and minor children, ending the chain-driven growth in the workforce.
4. Enforce the border and worksite so the legal cut is not undone by illegal hiring, using mandatory E-Verify.

Sources

1. U.S. Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics - 2024 - the foreign-born were 19.2% of the U.S. civilian labor force in 2024
2. U.S. Census Bureau, Historical Census Statistics on the Foreign-Born Population: 1850-2000 - foreign-born share 5.4% (1960) and 4.7% (1970)
3. U.S. Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey - civilian labor force roughly 70 million (1960) to about 168 million (2024)
4. U.S. Bureau of Labor Statistics, Women in the Labor Force: A Databook - the rise of dual-earner households; married-women labor force participation roughly 32% (1960) to about 62% today
5. Pew Research Center, Trends in Income and Wealth Inequality - median family income roughly doubled between 1947 and 1973 with broadly shared gains
6. Economic Policy Institute, The Productivity-Pay Gap - real pay for typical workers stagnated after the early 1970s while productivity kept rising
7. Joint Center for Housing Studies, Harvard University, Home Price-to-Income Ratio Reaches Record High - national home price-to-income ratio 3.0x (1990) to 5.6x (2024)
8. George J. Borjas, "Immigration and the American Worker: A Review of the Academic Literature," Center for Immigration Studies - immigration surplus about 0.3% of GDP; roughly $500 billion a year redistributed from workers to employers
9. Migration Policy Institute, U.S. Immigrant Population Over Time - roughly 32 million foreign-born added since 1990; foreign-born share about 15.8%
10. U.S. Bureau of Labor Statistics, Current Population Survey, native-born and foreign-born civilian labor force, annual averages - series LNU01073413 and LNU01073395; 127.3 million and 22.0 million in 2005, 135.8 million and 32.3 million in 2024
11. U.S. Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics - 2025 - occupational distribution by nativity, and the foreign-born share of the labor force by region
12. USCIS, Characteristics of H-1B Specialty Occupation Workers, 2025 report to Congress - 406,348 approvals, 62% in computer-related occupations
13. U.S. Bureau of Labor Statistics, Current Employment Statistics, all employees in manufacturing - series CEU3000000001; 19.4 million in 1979, 17.3 million in 2000, 11.5 million in 2010, 12.8 million in 2024