The economy is roaring. Immigration is a key reason.
Momentum in the job market picked up aggressively over the past year — all while Washington is deadlocked on a border deal
Updated February 27, 2024
Alexander
Santander, an asylum seeker from Venezuela, with his family at Centro
de Los Trabajadores, a Denver center that has helped hundreds of
recently arrived migrants seek jobs. (Stephen Speranza for The
Washington Post)
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Savecorrection
A
previous version of this article incorrectly described a Congressional
Budget Office projection on the effects of immigration on the economy.
The report said the labor force will have grown by 5.2 million people by
2033, not that it had grown by that number in 2023. This article has
been corrected.
Immigration has propelled the U.S. job market further than just about anyone expected, helping cement the country’s economic rebound from the pandemic as the most robust in the world.
That
momentum picked up aggressively over the past year. About 50 percent of
the labor market’s extraordinary recent growth came from foreign-born
workers between January 2023 and January 2024, according to an Economic
Policy Institute analysis of federal data. And even before that, by the
middle of 2022, the foreign-born labor force had grown so fast that it
closed the labor force gap created by the pandemic, according to research from the Federal Reserve Bank of San Francisco.
Immigrant
workers also recovered much faster than native-born workers from the
pandemic’s disruptions, and many saw some of the largest wage gains in
industries eager to hire. Economists and labor experts say the surge in
employment was ultimately key to solving unprecedented gaps in the
economy that threatened the country’s ability to recover from prolonged
shutdowns.
Migrants
line up at Mission Border Hope in Eagle Pass, Tex., as they wait for a
bus to Chicago in September. The nonprofit helps migrants after they are
processed by U.S. Customs and Border Protection. (Andrew
Caballero-Reynolds/AFP/Getty Images)
“Immigration
has not slowed. It has just been absolutely astronomical,” said Pia
Orrenius, vice president and senior economist at the Federal Reserve
Bank of Dallas. “And that’s been instrumental. You can’t grow like this
with just the native workforce. It’s not possible.”
Yet immigration remains an intensely polarizing issue in American politics. Fresh survey data
from Gallup showed Americans now cite immigration as the country’s top
problem, surpassing inflation, the economy and issues with government. A
record number of migrants have crossed the southern border since President Biden
took office, with apprehensions topping 2 million for the second
straight year in fiscal 2023, among the highest in U.S. history. Cities
like New York, Chicago and Denver have struggled to keep up with
busloads of immigrants sent from Texas who are overwhelming local
shelters.
Washington is deadlocked on a solution to the crisis. Senate Republicans and a handful of Democrats voted down
a sweeping $118 billion national security package that included changes
to the nation’s asylum system and a way to effectively close the border
to most migrants when crossings are particularly high. House Republican
leadership called the legislation “dead on arrival,” which seemed all
but guaranteed after former president Donald Trump came out strongly in opposition.
Opinion
polls show that voters widely disapprove of Biden’s handling of the
border, and Trump, who is closing in on the Republican nomination, is
touting plans for aggressive deportation policies if he wins in
November. Republicans have increasingly campaigned on the idea that
immigrants have hurt the economy and taken Americans’ jobs. But the
economic record largely shows the opposite.
There isn’t much data on how many of the new immigrants in recent years were documented versus undocumented. But estimates
from the Pew Research Center last fall showed that undocumented
immigrants made up 22 percent of the total foreign-born U.S. population
in 2021. That’s down compared to previous decades: Between 2007 and
2021, the undocumented population fell by 14 percent, Pew found.
Meanwhile, the legal immigrant population grew by 29 percent.
Whoever
wins the election will take the helm of an economy that immigrant
workers are supporting tremendously — and likely will keep powering for
years to come.
Fresh estimates
from the Congressional Budget Office this month said the U.S. labor
force will have grown by 5.2 million people by 2033, thanks especially
to net immigration. The economy is projected to grow by $7 trillion more
over the next decade than it would have without new influxes of
immigrants, according to the CBO.
Alexander Santander, 49, is among those immigrants. Santander
trekked for two months with his family, including two young children,
from Venezuela to the Texas border last fall to seek asylum. He said it
was a “very, very traumatic” journey that involved many nights sleeping on cardboard in the jungle.
Alexander
Santander, 49, a Venezuelan asylum seeker who makes $20 an hour at a
wood accessories manufacturer. Since arriving last fall, he said, his
family already has a better quality of life. (Stephen Speranza for The
Washington Post)
For
Santander, who is on humanitarian parole as he waits for his asylum
case to be processed, the decision to uproot his life in Venezuela,
where he worked as an operating room nurse, was difficult but necessary,
he said. His family had faced years of food shortages and, more
recently, threats for protesting the government.
“Thank
God we made it here,” Santander, who now works in manufacturing in
Denver, said in Spanish. “We have many more opportunities and already a
better quality of life.”
Research broadly shows that immigration has long helped the U.S. economy grow. But today’s snapshot still represents a stark turnaround from just a short time ago.
The
flow of migrants to the United States started slowing during the Trump
administration, when officials took hundreds of executive actions
designed to restrict migration.
Then the coronavirus hit, restricting border crossings even further. Right before the pandemic, there were about 1.5 million
fewer working-age immigrants in the United States than pre-2017 trends
would have predicted, according to the San Francisco Fed. By the end of
2021, that shortfall had widened to about 2 million, researchers at the
Global Migration Center at the University of California at Davis have shown.
But
the economy overall wound up rebounding aggressively from the sudden,
widespread closures of 2020, bolstered by historic government stimulus
and vaccines that debuted faster than expected.
The
sudden snapback in demand sent inflation soaring. Supply chain issues
were a main reason prices rose quickly. But labor shortages posed a
problem, too, and economists feared that rising wages — as employers
scrambled to find workers — would keep price increases dangerously high.
That’s
because the labor force that emerged as the pandemic ebbed was smaller
than it had been: Millions of people retired early, stayed home to take
over child care or avoid getting sick, or decided to look for new jobs entirely. In
the span of a year or so, employers went from having businesses crater
to sprinting to hire enough staff to keep restaurants, hotels, retail
stores and construction sites going. Wages for the lowest earners rose
at the fastest pace.
About
the same time, the path was widening for migrants to cross the southern
border, particularly as the new Biden administration rolled back
Trump-era restrictions.
People
cross into the United States from Tijuana, Mexico, this month for
appointments to seek asylum made through a Customs and Border Protection
app. (Gregory Bull/AP)
In
normal economic times, some analysts note, new immigrants can drag down
wages, especially if employers decide to hire them over native-born
workers. Undocumented workers, who don’t have as much leverage to push
for higher pay, could lower average wages even more.
But
the past few years were extremely abnormal because companies were
desperate to hire. Plus, it would be exceedingly difficult for
immigration to affect the wages of enormous swaths of the labor force,
said Alex Nowrasteh, vice president for economic and social policy
studies at the libertarian Cato Institute.
“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.”
Experts
argue that the strength of the U.S. economy has benefited American
workers and foreign-born workers alike. Each group accounts for roughly
half of the labor market’s impressive year-over-year growth since
January 2023, according to an Economic Policy Institute analysis that
used three-month rolling averages in labor force participation to
account for data volatility.
Particularly
for immigrants fleeing poorer countries, the booming U.S. job market
and the promise of higher wages continue to be an enormous draw.
“More
than any immigration policy per se, the biggest pull for migrants is
the strength of the labor market,” said Catalina Amuedo-Dorantes, an
economics professor at the University of California at Merced. “More
than any enforcement policy, any immigration policy, at the end of the
day.”
Upon
arriving in Denver in October, Santander hadn’t acquired a work permit
but needed to feed his small children. Even without authorization, he
found a job as a roofer for a contractor that ultimately pocketed his
earnings, then one cleaning industrial refrigerators on the overnight
shift for $12 an hour. Since receiving his work permit in January,
Santander has started “a much better job” at a wood accessories
manufacturer making $20 an hour.
But
for the vast majority of migrants who arrive in the United States
without prior approval, including asylum seekers and those who come for
economic reasons, getting a work permit isn’t easy.
Federal
law requires migrants to wait nearly six months to receive a work
permit after filing for asylum. Wait times can stretch for additional
months because of a backlog in cases. While they wait, many migrants
find off-the-books work as day laborers or street vendors, advocates
say. Others get jobs using falsified documents, including many teenagers who came into the country as unaccompanied minors.
Still,
many migrants miss the year-long window to apply for asylum — a process
that can cost thousands of dollars — leaving them with few pathways to
work authorization, advocates say. Those who can’t apply for asylum
often end up working without official permission in low-wage industries
where they are susceptible to exploitation.
Unionized
building workers, including many immigrant office cleaners, march
through downtown D.C. on Oct. 2 to draw attention to labor talks and
their demand for higher wages. (Ellie Silverman/The Washington Post)
That
includes many of the migrants coming to the United States to escape
economic hardship, which alone does not qualify as a valid reason to
seek asylum or qualify for a work permit.
One
such worker — who spoke on the condition of anonymity out of fear of
reprisal due to his immigration status — said he left his remote village
in Mexico in 2022 because he had no hope of ever being able to afford
to build a house with his income as a civil servant.
He
said it was easy to find his current job in Chicago — scouring a
tortilla factory on the overnight shift for $16.75 an hour. But the city
is vast and hard to navigate without a car, he said.
“My
dream is to save enough money to build a house on my land in Mexico to
return to,” he said in Spanish. “Then if for some reason I get deported
to Mexico, at least I’ll have somewhere that’s mine to live.”
In
Dalton, Ga. — known as the “Carpet Capital of the World” — Jan Pourquoi
said the entire economy would collapse without immigrant workers.
Pourquoi owns a rug company with a warehouse near the city’s railroad
tracks and pays $11 an hour for jobs like cutting and sewing door and
bathroom mats. He said that he doesn’t question anyone’s paperwork, and
that he knows workers will reliably line up at his door looking for
openings every morning.
Pourquoi emigrated from Belgium 37
years ago and said he understands his workers’ desire for more job
security. But he also said that more needs to be done to stop the flow
of immigration at the southern border, and that the government is
responsible for opening pathways to citizenship that would make economic
security more certain. As for his business, if stricter immigration
policies slashed his workforce and he had to raise wages to $15
an hour, he wouldn’t be able to compete against foreign firms with
cheaper wholesale prices.
“If
I was a poor Mexican, I would be the first one to cross the Rio Grande
illegally myself,” he said. “I don’t blame these people. I blame our
politicians and our government for letting it happen.”
Nick Miroff contributed to this report.