The Positive Impact of Immigration on US Jobs: A Lifeline for America’s Future
The eve of the 2020 election saw Donald Trump tell voters that they faced a choice between a “TRUMP RECOVERY” versus a “BIDEN DEPRESSION.” But since President Joe Biden actually took office, the United States has added 15.7 million jobs. Trump has tried to pooh-pooh this good news by arguing that the jobs being added are all going to illegal immigrants. In fact, recent employment growth has indeed featured a lot of immigrants, but it is not drawing jobs away from native-born workers.
Cracking the Employment Numbers
To truly understand the effect of immigration on jobs, consider a few things:
Monthly employment estimates: These estimates separate native-born from foreign-born workers but do not distinguish those without legal status. 12-month averages are used for adjusting seasonal variation.
Surge in Immigration: The standard numbers might be too low because recent immigration has surged. That doesn’t significantly alter the overall picture.
Comparison Starting Point: Comparing job growth since 2020 to the pre-pandemic year of 2019 makes much better sense. While some of this job growth reflects recovery from the pandemic slump, the majority is attributable to immigrants.
Immigrants and Job Growth
The crucial question is whether the jobs filled by immigrants would have been available to native-born workers if immigration had been lower. If immigrants were taking jobs from native-born workers, we would expect to see a rise in unemployment among the native-born. However, the unemployment rate among native-born workers is near an all-time low.
Labour Force Participation
Anti-immigrant arguments argue that immigrants have pushed native-born Americans out of the labour force. Although there has been a modest decline since 2019, the share of native-born adults in the labour force was expected to decrease further due to population rowth. In 2019, the Congressional Budget Office projected that the rise in retirements for baby boomers would indeed lower the labour force participation rate. This means that virtual stagnation of the employment of native-born workers is a supply-side issue rather than one of job opportunities.
Immigration and Economic Benefits
Immigration has so far permitted large rises in aggregate employment because it is working-age immigrants who are moving to America. Had it not been the case, such large increases would not have been possible without immigrants. Since most of the immigrants bring different sets of skills and undertake different types of jobs, there is limited competition for native-born workers.
Wages and Inflation
Unlike people used to think, immigrants don’t compete much with native-born workers; rather, they complement the labour market with their different skills. Despite high levels of immigration, there has been tremendous wage growth for the worst-paid workers during the past years.
Fiscal Benefits
In fact, immigrants, and especially working-age adults, pay taxes for years before they are eligible for most federal benefits, including Medicare and Social Security. Undocumented are even more beneficial to the budget because they pay payroll taxes but are not eligible for future benefits.
Conclusion
At times, there are cases when it puts pressure on the labour market for the native-born or increases house prices. On the whole, however, the impact of immigration is positive on the economy of the United States. It helped limit inflation and facilitated rapid employment growth. These scare stories about immigration are not borne out by the facts.
