US has avoided post-COVID recession thanks to IMMIGRATION with newcomers helping turbocharge jobs market, experts say

• Immigration fueled half of all job growth in the US during 2023, data show
• CBO estimates migrants will add $7 trillion to the US economy over next decade
• Yet illegal immigration and the border crisis are a top concern for voters 

Immigration may be the key factor that helped the US avoid slipping into a widely predicted post-pandemic recession last year, economic experts say.

In 2023, about half of the US job market’s robust growth came from foreign-born workers, according to an Economic Policy Institute analysis of federal data cited by the Washington Post on Tuesday.

Separate figures this month from the Congressional Budget Office said the US labor grew by 5.2 million people last year, due in large part to a rise in immigration.

The economy is projected to grow by $7 trillion more over the next decade than it would have without new arrivals of immigrants, according to the CBO.

Those figures, like most federal data on the economic impact of foreign-born residents, do not distinguish between legal immigration and illegal entry into the country, which is a hot-button issue for voters ahead of the 2024 election.

U.S. Customs and Border Protection agents process immigrants near the U.S.-Mexico border on December 08, 2023 in Lukeville, Arizona

According to a Congressional Democrats on the Joint Economic Committee , immigrants made up about 15 percent of the US workforce in 2021

New Gallup polling out Tuesday morning shows Americans consider immigration the country’s single most important problem for the first time since 2019.

It follows a surge in illegal crossings at the southern border since 2022, in a crisis that has strained federal resources and put a burden on cities receiving the migrants, including New York, Chicago and Boston.

The influx of asylum-seeking migrants, many of whom face lengthy delays in gaining worth authorization, has imposed costs on taxpayers and challenges for officials tasked with meeting their basic needs.

At the same time, legal immigration on visas issued by the State Department has also surged in recent years, returning back to pre-COVID levels and providing fuel for economic growth.

‘Immigration has not slowed. It has just been absolutely astronomical,’ Pia Orrenius, vice president and senior economist at the Federal Reserve Bank of Dallas, told the Post.

‘And that’s been instrumental. You can’t grow like this with just the native workforce. It’s not possible.’

It’s unclear exactly what proportion of immigrants in the US today are present without authorization.

But the Pew Research Center estimates that in 2021, just 22 percent of the country’s foreign-born population was present in the US illegally.

That was a decrease from prior decades, with the undocumented population falling 14 percent from 2007 to 2021, while the legal immigrant population grew by 29 percent.

Foreign-born workers have returned to the workforce faster than native-born following the pandemic

Two-thirds of immigrant workers earn at least $35,000 per year, compared with 75% of native born Americans

According to a Congressional Democrats on the Joint Economic Committee, immigrants made up about 15 percent of the US workforce in 2021.

But they were over-represented in several key job categories, including education and health services (20 percent), finance and real estate (20 percent) and construction (20 percent).

A year ago, most economists predicted that the US economy was headed toward a recession as the Federal Reserve pursued its interest rate hikes to tame inflation.

But the unemployment rate has remained low, the economy continued to expand by adding new jobs, roughly half of which went to foreign-born workers last year, according to the Economic Policy Institute.

‘The reality is that the economy does not have a fixed number of jobs, and what we see today is a growing economy that is adding jobs for both immigrants and US-born workers,’ EPI analysts Daniel Costa and Heidi Shierholz wrote in a recent blog post.

‘The reality is that the labor market is absorbing immigrants at a rapid pace, while simultaneously maintaining record-low unemployment for U.S.-born workers,’ they added.

Analysts note that in some economic environments, foreign-born workers who are ready to accept lower wages can depress earnings for Americans competing for the same jobs.

But the past few years have been marked by an extraordinarily tight labor market, with employers desperate to hire workers.

Immigration helped meet demand for workers and ease tight labor markets, according to an analysis by the Federal Reserve Bank of San Francisco.

‘Reopening of borders in 2022 and easing of immigration policies brought a sizable immigration rebound, which in turn helped alleviate the shortage of workers relative to job vacancies,’ the analysis states.

‘The foreign-born labor force grew rapidly in 2022, closing the labor force gap created by the pandemic,’ it adds.

Alex Nowrasteh, vice president for economic and social policy studies at the libertarian Cato Institute, also told the Post that it would be difficult for immigration to impact most American workers.

‘What it can do is lower the wages of a specific occupation in a specific area, but American workers aren’t stupid. They change jobs. They change what they specialize in,’ Nowrasteh said. ‘So that’s part of the reason why wages don’t go down.’

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