The crisis at the southern border appears to have had a positive impact on the U.S. economy, but experts warn the growth came with consequences.
New findings by former White House economic adviser Ernie Tedeschi concluded that the U.S. economy’s recovery from the pandemic recession was stronger than the Great Recession more than a decade ago thanks in part to foreign-born workers in the United States.
The U.S. real gross domestic product has soared 8.2% since the final quarter of 2019. The rise in the immigrant population since the end of 2019 accounted for at least one-fifth of that growth, “accounting for direct labor supply, unemployment rate, and productivity effects,” the report stated.
“Absent immigration, the US labor supply would have shrunk by 1.2 million since 2019. Instead, it expanded by 2 million,” Tedeschi, a research scholar at Yale Law School and a visiting fellow at the Psaros Center for Financial Markets and Policy at Georgetown University, wrote.
The data cited in Tedeschi’s report was based on numbers provided by the annual Current Population Survey results published by the Census and the Bureau of Labor Statistics. Immigrants referenced in the report included immigrants who did and did not have legal status to be present in the country, including people who were released from the southern border, who crossed without getting arrested, and people on green cards or visas.
Without the addition of immigrants, Tedeschi said the labor force would have lost roughly 1.2 million U.S. workers primarily due to aging. Instead, it added 2 million workers.
Washington think tank the Brookings Institution published a report that analyzed findings from the Congressional Budget Office, which confirmed that unexpected net growth in the U.S. population had fueled the economy by adding workers.
In 2019, CBO projected net immigration in 2023 to be 1 million people, but instead, it topped 3.3 million people.
“CBO’s figures are reasonable given what we know about border activity and other immigration data,” Brookings authors Wendy Edelberg and Tara Watson wrote in their report. “Faster population and labor force growth has meant that employment could grow more quickly than previously believed without adding to inflationary pressures. In addition, greater immigration has likely resulted in greater con sumer spending growth, the strength of which has persistently surprised observers.”
But Eric Ruark, research director for immigration think tank NumbersUSA, said the two reports were half-truths and did not consider who was being positively affected by the economic gains.
“The argument that immigration is ‘good for the U.S. economy’ is based on the truism that adding millions of more people to the U.S. population raises total GDP. It’s also true that mass immigration lowers per capita GDP, which means U.S. workers lose ground,” said Ruark in an email. “Economic growth driven by mass immigration creates gains for immigrants and employers of immigrants.”
The Brookings Institution report suggested that immigrants who entered illegally or overstayed a visa made up, by far, the largest number of immigrants added to the workforce in 2023.
Furthermore, U.S.-born workers may not see the economic benefit directly impacting them if it translates into depressed wages.
“One of the main arguments we’ve recently heard in favor of increased immigration is that it helps bring down inflation by expanding the labor pool; in other words by driving down wages for American workers. Tedeschi admits as much in his report, although begrudgingly in a footnote,” Ruark said.
Former federal immigration Judge Andrew R. Arthur agreed with Ruark’s point that any economic boom in recent years is not without a new set of victims.
“Driving down the wages of American workers — both U.S.-born and legal immigrants — may not have been the intent of the president’s lax immigration-enforcement policies (a desire to “advance[e] equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality” is, as I’ve explained elsewhere), but it has been the result,” Arthur, Resident Fellow in Law and Policy for the Washington-based think tank Center for Immigration Studies, in a recent rebuttal to the economic reports, said.
“Immigrants will continue to generate good, positive economic growth,” Correa countered. “They will continue to be what I call a political piñata.”
The economic gains for the U.S. economy are notable for the Biden administration in an election year, as the issue has been top of mind for voters.
Rep. Lou Correa (D-CA) defended the boost foreign workers bring to businesses locally, saying that in his Orange County district, businesses that have been unable to find people able to work may instead rely on immigrants without work papers.
“Back home, the manufacturers, they need the workers,” Correa said in a phone interview with the Washington Examiner on Friday.
Correa said the challenge for lawmakers was how to help illegal immigrants who need jobs and cannot legally work but have been admitted into the country to await immigration court proceedings, which can take years to navigate.
Correa recalled a recent meeting with a Republican lawmaker who lamented that the U.S. needed more Ukrainians because “they’re productive, they come to work.”
“I said the reason Ukrainians come in and work is because you give them a work permit when they come across the border. They have what’s called parole,” Correa said, referring to a Biden administration initiative to admit Ukrainians and allow them to legally work for two years. “All these others — they come in, they don’t have work permits.”
The Biden administration has not disclosed how many of the 9 million immigrants encountered at the border have ultimately been released into the country, but Correa claimed the country had a “massive swell of the underground economy” as a result.
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Correa suggested providing immigrants released into the U.S. from the border with two-year work permits so that they can work above the table and pay taxes while they await court hearings. Only immigrants who request asylum will receive a work permit but not until six months after making an asylum claim, leaving individuals in limbo for half a year.
“Look at China — they’re running out of workers,” said Correa. “We’ve got them coming, and we don’t know how to use them and that to me is a sin, a sin, against our economy.”
