New York, NY — Axios highlighted the positive impacts of immigrants in strengthening the overall resilience of the U.S. economy and the labor market, noting that rising levels of immigration played a key role in the growth of the American workforce that helped relieve last year’s economic pressures.
Jerome Powell, the Chair of the Federal Reserve of the U.S., backed their calculations, saying “I think it’s just reporting the facts to say that immigration and labor force participation both contributed to the very strong economic output growth that we had last year.”
Wendy Edelberg and Tara Watson, economists for the Hamilton Project at the Brookings Institution, emphasized that immigration has not only benefited the labor force, but has also aided in resilient consumer spending and GDP growth. According to their estimates, “immigration pushed up real consumer spending growth by about 0.2 percentage point last year” and “economic activity directly attributable to the increase in immigration also increased real GDP by 0.1 percentage point per year since 2022.”
“Simply put: Immigrants have been vital to the growth of the U.S. economy. Recent data underscores the positive contributions that immigrants have had on the U.S. labor force and economy in the past year. We call on our leaders in New York City, Albany, and Washington to face the facts and take immediate action to expand migrants and asylum seekers’ access to work authorization and deliver real solutions to funding for community resources, like housing and legal services,” said Murad Awawdeh, Executive Director, New York Immigration Coalition.
Read highlights from the article below:
Axios: How immigration is driving U.S. job growth
[…]
State of play: New analysis from the Brookings Institution puts some hard numbers on the relationship between the rise in immigration and the labor market — finding an influx of workers is allowing the U.S. to sustain higher rates of payroll gains than forecasters thought it could before the pandemic.
“Faster population and labor force growth has meant that employment could grow more quickly than previously believed without adding to inflationary pressures,” economists Wendy Edelberg and Tara Watson write for the Hamilton Project.
[…]
But Edelberg and Watson say that, accounting for higher immigration, the economy could have accommodated job growth between 160,000 and 230,000 in 2023 “without adding to pressure in the labor market that pushed up wages and price inflation.”
The authors estimate that, if immigration continues at the current rate, “employment growth of nearly 200,000 workers a month is consistent with a healthy, but not too hot, labor market” — roughly double what forecasters thought to be the case before the pickup in immigration.
[…]
The authors estimate the immigration surge didn’t just jolt the labor force — but also is at least a small factor behind resilient consumer spending and GDP growth.
Immigration pushed up real consumer spending growth by about 0.2 percentage point last year — with a similar boost expected this year, the authors estimate.
Economic activity directly attributable to the increase in immigration also increased real GDP by 0.1 percentage point per year since 2022.
[…]
“It’s just arithmetic,” Powell told the House Financial Services Committee. “If you add a couple million people to an economy, a percentage of them work, there will be more output.”
“I’m just reporting the facts there,” he added. “I’m not going to say anything is needed for the future or good policy indirectly or directly. I think it’s just reporting the facts to say that immigration and labor force participation both contributed to the very strong economic output growth that we had last year.”
