A year ago, many analysts pointed to an immigration surge as a key driver of economic growth in the early 2020s. However, this increase in unauthorized migrants has led to pressures in the housing market and social costs, raising inevitable political challenges.
Currently, the landscape has shifted significantly, with an administration taking an assertive stance against illegal immigration. This has resulted in a marked decrease in the number of undocumented migrants entering the United States. This trend began towards the end of President Joe Biden’s administration as policies were tightened to mitigate political repercussions. Since President Donald Trump’s administration began, border crossings have continued to plummet, and experts predict this decline will persist.
The pivotal question raised by this new reality is how these immigration policy changes will affect the economy. A recent analysis conducted by the Dallas Federal Reserve sheds light on this issue, offering a detailed examination of various economic scenarios.
The primary conclusion from the Dallas Fed’s analysis is that a slowdown in immigration is likely to incur economic costs, particularly a decline in GDP growth. Another significant point made in the study is that immigration plays a minimal role in driving inflation.
Using the Congressional Budget Office’s (CBO) projections of net unauthorized immigration as a baseline, the Dallas Fed’s economists have modeled potential changes to GDP growth resulting from immigration policy shifts anticipated after January 2025. Their findings suggest that GDP growth is expected to be 0.8 percentage points lower than it would have been had the net unauthorized immigration continued as projected by the CBO.
Pia Orrenius, Vice President of the Federal Reserve Bank of Dallas and one of the report’s authors, noted that while the decline in unauthorized immigration is not severe enough to lead to negative growth, it remains a significant concern for economic performance overall.
The consensus is clear: America relies on the contributions of immigrants to rejuvenate its labor force and foster innovation. They are integral to the American experience and its economic fabric.
However, this analysis should not be misconstrued as an endorsement of illegal immigration. Rather, it underscores the critical need for the implementation of a comprehensive foreign worker program and an expedited legal migrant acceptance process, especially targeting nations within the hemisphere.
The agricultural sector has long advocated for an effective guest worker program. Federal data reveal that over 40% of farmworkers are unauthorized immigrants, indicating a heavy reliance on foreign labor for food production.
In Texas, for example, approximately 300,000 construction workers are undocumented, highlighting another sector where unauthorized labor is crucial for building new housing—an area of pressing demand.
The American public largely agrees on immigration issues: there is a desire for a secure border alongside a pathway for legal immigrants to work and pursue their version of the American dream.
Resolving these immigration challenges should not be an insurmountable task, yet the situation in Washington continues to complicate matters unnecessarily.
This summary is part of our ongoing series, The American Middle, emphasizing the vital role of migrants in the U.S. economy and society.
image source from：dallasnews
