Immigrants make America stronger and richer

Back in 2020, Stephen Miller, one of the architects of Trump’s immigration policies, told Trump supporters that one of the goals was to “turn off the faucet of new immigrant labor.” Remarkably, Trump issued an executive order meant to deny visas to highly skilled foreigners, many working in the tech sector. Miller and his boss apparently believed that this would mean more plum jobs for Americans, when what it would actually do was undermine American competitiveness in advanced technology.

So this seems like a good time to point out that negative views of the economics of immigration are all wrong. Far from taking jobs away, foreign-born workers have played a key role in America’s recent success at combining fast growth with a rapid decline in inflation. And foreign-born workers will also be crucial to the effort to deal with our country’s longer-term problems.

About that recent success: It has taken a while, but many observers are finally acknowledging that the United States has done extraordinarily well at recovering from the effects of the COVID-19 pandemic. Inflation has faded away in much of the world, but the United States stands out for its ability to combine disinflation with vigorous economic growth. And one key to that performance has been rapid growth in the US labor force, which has risen by 2.9 million since the eve of the pandemic four years ago.

How much of that growth was due to foreign-born workers? All of it. The native-born labor force declined slightly over the past four years, reflecting an aging population, while we added 3 million foreign-born workers.

Did those foreign-born workers take jobs away from Americans – in particular, nativeborn Americans? No. America in early 2024 has full employment, with consumers who say that jobs are “plentiful” outnumbering those saying jobs are “hard to get” by almost 5-1. The unemployment rate among native-born workers averaged just under 3.7 percent in 2023, as low as it’s been since the government began collecting the data.

In fact, I’d argue that the influx of foreignborn workers has helped the native born. There’s a large research literature on the economic impact of immigration, which consistently fails to find the often predicted negative effects on employment and wages. Instead, immigrant workers often turn out to be complementary to the native-born workforce, bringing different skills that, in effect, help avoid supply bottlenecks and allow faster job creation. Silicon Valley, for instance, hires a lot of foreign-born engineers because they bring something additional to the table; the same is true for workers in many less-glamorous occupations.

And immigrant workers have probably been especially important these past few years, as the economy has struggled to resolve disruptions caused by the pandemic.

Foreign-born workers are crucial to America’s fiscal future. To a first approximation, the federal government is a system that collects taxes from working-age adults and spends much of the proceeds on programs that help seniors, such as Medicare and Social Security. Cut off the flow of immigrants, who are largely working-age adults, and our system would become much less sustainable.

So while the mess at the border needs to be fixed – and could be fixed if Republicans would help solve the problem instead of exploit it for political advantage – don’t let that mess obscure the larger reality that immigration is one of America’s great sources of power and prosperity.