As local employers continue to search for workers to fill their open positions, some have expanded efforts to reach under-utilized labor. The region’s immigrants and refugees are a critical part of the workforce, but they are more likely to be underemployed than US-born workers. Strategies to address this untapped talent can improve economic outcomes for employers, workers, and the overall region.
Immigrants are an important component to the region’s population growth. Domestic net migration has been negative for the last several years, but net migration from abroad has largely offset this pattern. Since the size of the region’s labor force is a function of the total population living in the region, immigrants are also helping grow the pool of potential workers.
Indeed, even though immigrants make up 6% of the region’s total population, they are overrepresented in the labor force, accounting for 8% of the workforce. This is in part due to the age distribution of the region’s immigrants, as more than 60% are in their prime-working-years. The labor force participation rate for immigrants is nine percentage points higher than the labor force participation rate among the region’s native born population, according to Census data.
Immigrants are not just an important component of the overall labor force, but also raise the rate of college-educated workers in the region. 35% of immigrants in the Louisville region have a bachelor’s degree or higher, compared to only 29% of the region’s native born population.
While workers with less than a high school degree report the same earnings regardless of nativity status, immigrants with higher levels of educational attainment earn less than their US-born counterparts. Among workers with at least a bachelor’s degree, immigrant workers have median earnings $10,000 a year less than the native born population with similar levels of education.
At least one contributing factor to these earnings patterns is an underutilization of college-educated immigrants in the workforce. 12% of the region’s immigrants with a college-degree are employed in an occupation that requires no more than a high school degree or are unemployed. This “brain waste” is twice as likely among the region’s immigrant workers than US-born workers. Research shows brain waste comes at a significant cost to workers and the economy as a whole. Forgone earnings and productivity affects families, communities, and public coffers.
““Brain waste” is when college-educated adults are either unemployed or employed in an occupation that typically requires no more than a high school degree. This underemployment comes at a significant cost to workers and the economy as a whole.
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Strategies aimed at helping immigrants utilize the work experience and credentials they bring with them to the region will improve labor market outcomes and economic productivity. A number of organizations in our region focus on workforce strategies to assist immigrant and refugee workers into full employment. KentuckianaWorks is currently partnering with Louisville Metro’s Office for Immigrant Affairs, Kentucky Office for Refugees, and Jewish Family and Career Services to strengthen the talent pipeline for immigrants and refugees through a grant from the World Education Services (WES).
Technical notes:
This analysis uses pre-COVID data. To achieve an appropriate sample size, survey responses are pooled for a five year time period. Rather than including 2020 in the middle of the five year time period, I chose to focus on the five years prior to the pandemic (2015-2019). Occupations were classified by skill level using the job zone categories from O*NET, and as described in previous research.
