Immigrants are back, at least in the United States. Over the past two-and-a-half years, immigration to the U.S. labor market has increased by four million, and the working-age immigrant population has finally reached pre-pandemic trend levels.
This could be a core factor in strong employment growth, especially in the leisure and hospitality sectors. This is also part of the story about increasing labor force participation and good news for the fight against inflation.
Apollo Chief Economist Torsten Sløk said in a recent memo to customers: The fact that immigration is now moving above 2019 levels will be very positive for the labor market and the Fed’s inflation agenda.”
Aside from drawing more women into the workforce, increasing immigration is the only quick way to strengthen the workforce in any country. Job-killing AI software wreaks economic and political turmoil.
According to Pew Research, immigration accounted for about half of the increase in the working-age population in the United States between 1995 and 2014. Unfortunately, between Donald Trump’s “build the wall” patriotism and the COVID-19 pandemic, migrant workers have plummeted. In his four years, the Trump administration has taken 472 administrative actions aimed at reducing immigration, according to his February paper for the San Francisco Federal Reserve. This includes immigration enforcement, freezes on immigration for refugees, and withdrawal of families from immigration. Between 2016 and his 2019, the number of new permanent residents decreased by 13% and his number of F1 visas for students decreased by 23%.
Covid didn’t help. Many furloughed workers lost their visas or simply preferred to weather the pandemic at home, a combination of his two tendencies, according to the San Francisco newspaper, spurring a much tighter labor market. It is said that he took The authors found that the decline in immigration since 2017 increased the vacancy-to-unemployment rate in the US by 5.5 percentage points.
Fortunately, however, the recent rally has reduced that ratio by 6 percentage points. According to Pew, in 2022 he will have over 900,000 immigrants becoming U.S. citizens. This is the third highest on record and the most in any fiscal year since 2008. Mexico, India, the Philippines, and Cuba had the highest inflows, and Cuba, Jamaica, the Philippines, India, and Vietnam had the highest outflows.
In short, the US appears to be returning to pre-Trump, pre-pandemic immigration rates.
This is great news not just for inflation, but for growth, labor mobility and entrepreneurship. Immigrants are more likely than native-born Americans to become self-employed and start new businesses. They are at the core of the ever-evolving American Dream. In my hometown of Indiana, there are Spanish grocery stores, restaurants, nightclubs, and his bilingual service his provider serving a community of former immigrant farm workers. A few generations later they are increasingly middle class and represent much of the region’s entrepreneurial spirit.
Labor mobility, once known as a major difference between the US and other developed countries, has declined in recent years. There are many reasons for this. From the subprime crisis to massive job losses in regions of rapid globalization, or the destruction of technical jobs. A new ‘location-based’ economic study shows that these factors tend to make people less mobile due to their proximity to family and community safety nets.
But immigrants take risks. They go where there is potential for growth, facilitating business expansion and easing investment bottlenecks. This tends to reduce regional income disparities, something the United States desperately needs. His 2020 paper for the Dallas Fed found that much of the mobility in the U.S. labor market today is due to immigrant flows, not the movement of indigenous workers.
In fact, a Dallas Fed study points to the fact that the future of growth exceptionalism in America (relative to Europe and other rich countries) may rest largely on the future of immigration. . Dallas Fed economists made long-term projections that included the contribution of immigrants and their children to growth. They say that if immigration to the U.S. continues at her 2016 trend level through her 2060, the workforce will increase by 0.45% of hers, ultimately creating a workforce of 193 million people. I discovered that Conversely, a 30% reduction in immigration would mean 180 million workers, and a 50% reduction would mean 173 million workers.
That means millions less people paying taxes, funding entitlements, and starting new businesses. Immigrants make up her 13.6% of the US population, but they are starting his quarter of new businesses. In fact, according to a survey by the American Immigration Council last year, her 43.8% of Fortune 500 companies were founded by immigrants or their children. Anti-immigrant and business-minded conservatives in particular should consider this number carefully.
