Amid concerns about runaway inflation and the possibility of the United States slipping into a recession, some economists see a simple solution that could revive the economy: immigration.
“The economy would benefit enormously from more immigration,” says Mark Zandi, chief economist at Moody’s. “That would ease labor shortages and calm inflation and interest rates.” Economic research from Moody’s Analytics has shown that for every 1% increase in the population made up of immigrants, GDP increases by 1.15%.
The United States still has nearly 11 million unfilled jobs, according to the latest data from the Bureau of Labor Statistics (BLS). Biggest factor: baby boomers have retired in droves, leaving huge gaps in the workforce. From the end of 202150.3% of American adults 55 and older said they had retired from the workforce, according to a Pew Research Center analysis. The pace of these retirements has accelerated since 2020, even as US population growth has slowed. The Pew Research Center projects that the growth rate of the average working-age adult population will hover around 0.3% over the next two decades.
Meanwhile, immigration took a nosedive. In 2016, newcomers to the United States peaked at 1 million legal immigrants, but those numbers have started to decline under the Trump administration. Then, in 2020, COVID-19 halted most travel, stopped processing immigration applications, and prompted many foreign workers to return to their home countries. In 2021, only 247,000 people legally immigrated to the United States. Had the nation continued at pre-pandemic levels, it would have 2 million more immigrants, by one estimate, whose absence is particularly felt in vacancies in hospitality, retail and healthcare.
“You canThere is no economic growth without labor,” says James Feigenbaum, professor of macroeconomics at Utah State University. Without a body, the economy will start to contract, he says. “The only way to add more bodies to our workforce is to let people come from outside the country.”
Although some Americans worry that increased immigration will make it more difficult to find a job, some 41% share this concern, according to a recent survey by CVLab-eeconomic research suggests that immigrants Actually create more jobs. The National Academies of Science, Engineering, and Medicine found “little evidence that immigration significantly affects the overall employment levels of native-born workers. They can even increase the income of other citizens, depending on Pia Orrenius, vice president and chief economist at the Dallas Federal Reserve Bank.
Jeremy Robbins, executive director of the American Immigration Council, explains it this way: When you can’t find truckers, you can’t move the goods. When a restaurant can’t hire employees, people miss their rent. “There is an economic imperative for us to fix the immigration system,” he says.