Immigration is an integral part of the economic and social fabric of the United States. For decades, immigration has been a vital factor in enhancing the workforce, innovation, and stimulating economic demand.
But as the political debate over immigration escalates, especially with President-elect Donald Trump’s return to the White House, there is renewed debate about the impact of immigrants on the labor market, wages, the macroeconomy, and government costs.
Bloomberg published a recent report highlighting the details of this pivotal issue.
1- Immigrants are the foundation of the American economy
According to the US Census Bureau, immigrants make up about 20% of the workforce, with more than 32 million migrant workers in various sectors.
This growth in the immigrant workforce has increased significantly in recent years, with 4 million new immigrants joining the labor market between 2022 and 2023, according to Bloomberg.
This large influx contributed to compensating for the labor shortage that worsened during the pandemic, which led to the stability of many vital economic sectors.
On the other hand, the educational qualifications of immigrants vary, depending on their countries of origin. For example, 74% of immigrants from South Asia have a university level of education, while less than 10% of immigrants from Mexico have university degrees.
Bloomberg says that this disparity is reflected in the distribution of labor across different sectors, making immigrants a diverse and important element in the American economy.
2- Irregular migration is a worsening crisis
The agency states that since 2021, the United States has witnessed an unprecedented rise in the number of irregular migrants, with border authorities recording 7 million crossing attempts over the past three years.
It is estimated that the number of undocumented immigrants could exceed 8.7 million additional people by 2026, according to the Congressional Budget Office.
This large influx has sparked widespread political and economic controversy. While some see that irregular migrants constitute a burden on public resources, the report shows that many of them work in sectors that desperately need labor, such as construction, agriculture, and services, which makes them an indispensable part of the economy. American.
3- The role of immigrants in the labor market
Historically, immigrants have played a major role in filling gaps in the American labor market. Immigrants work mainly in sectors that suffer from a permanent labor shortage, such as construction, where they constitute 25% of total employment, and the percentage rises to 53% in New York.
Bloomberg notes that during the recovery period from the pandemic, Federal Reserve Chairman Jerome Powell described immigration as a major factor in supporting the economy, noting that increasing the number of available workers helped reduce inflationary pressures and stabilize the market.
4- The impact of immigration on wages
One of the most prominent points raised by opponents of immigration is the impact of immigrants on wages. The Congressional Budget Office warns that the influx of low-skilled workers could slow wage growth in some sectors.
However, long-term studies indicate that the impact of immigration on wages is “very small,” especially when viewed over 10 years or more, according to Anadolu Agency.
5- Talented immigrants are the engine of innovation
The United States has always been a destination for attracting creative minds from around the world, according to Bloomberg. In 2022, there were 14 million college-educated immigrants in the United States, working mainly in sectors such as technology, medicine, and scientific research.
According to research by the National Bureau of Economic Research, immigrants were responsible for one-third of new patents over the past three decades. These innovations are concentrated in areas such as high technology, chemical industries and medicine.
6- Financial and social challenges
Despite the economic benefits, local governments face significant financial challenges due to the costs of providing basic services to immigrants. In New York alone, the city has received 200,000 new immigrants since 2022, putting enormous pressure on public resources, according to the agency.
The city declared a state of emergency and requested federal assistance, and also resorted to funding programs to help immigrants return to their countries of origin.
7- Huge economic cost
President-elect Donald Trump pledged to implement the largest deportation campaign in the history of the United States, targeting about 11 million irregular immigrants.
It is estimated that implementing this plan will cost the country more than $150 billion, in addition to $15 billion annually to maintain border security.
Analysts believe that deporting this large number will lead to large gaps in sectors that rely heavily on migrant labor, threatening the stability of the economy.
