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Monday numbers: New data show why the U.S. needs more immigrants

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Monday numbers: New data show why the U.S. needs more immigrants

By Alexia Fernández Campbell
Monday numbers: New data show why the U.S. needs more immigrants
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A new Congressional Budget Office report indicates that the U.S. economy wil be dependent upon a significant influx of immigrants in the years to come. Image: Adobe Stock

As the fight over immigration reached peak chaos in the U.S. Senate earlier this month, the Congressional Budget Office held a press conference nearby. The director’s briefing about the latest economic forecast seemed disconnected from the political drama playing out a few blocks away. But its analysis was closely linked to immigration policy.

The nonpartisan budget office, which estimates future tax revenue and government spending, continued projecting that the nation would spend trillions of dollars more than it brings in. The growing deficit is mainly the result of high interest rates, more people receiving Medicare and Social Security benefits, and rising healthcare costs. On top of that, revenue plunged after Republicans passed a law in 2017 that cut taxes for businesses and wealthy individuals.

Yet economists projected a smaller deficit and national debt than last year. One key reason is that they expect rising immigration to boost the U.S. economy.

Here are some of the CBO’s most striking predictions for the next decade:

  • The U.S. labor force will grow by an extra 5.2 million workers, mostly because of increased immigration. They will boost the country’s Gross Domestic Product by a total of 2%.
  • Immigrant workers will add an extra $7 trillion to the U.S. economy within the next decade and an extra $1 trillion in federal tax revenue.
  • New immigrants will prevent the U.S. population from shrinking. They will be the source of all U.S. population growth by 2042.

The CBO’s 96-page report showed how much the U.S. economy and the national budget depend on immigrant workers. Their estimates include people who enter the country illegally and those who enter lawfully.

“We are continuing to assess the implications of immigration for revenues and spending,” Director Phillip Swagel said during the Feb. 7 briefing.

A graph shows the gradually rising size of the U.S. labor force
Graph: Center for Public Integrity

Much of the political discussion on immigration focuses on the record number of asylum seekers and undocumented immigrants who crossed the southern border last year.

Giovanni Peri, an economics professor at the University of California, Davis, said there are other reasons for the bump in immigration. Namely, the U.S. government began processing a backlog of applications in 2022 from foreigners seeking green cards and work permits that were put on hold during the COVID-19 pandemic.

The spike in immigration last year was not historic, Peri explained, but merely returned to pre-pandemic levels. He believes the most striking news from the CBO’s report was how clearly it stated that the U.S. population will start shrinking in 2042 without the expected increase in immigrant workers.

“It is saying that the growth of the U.S. labor force depends on immigrants in a fundamental way,” said Peri, whose research shows that the pandemic, plus strict immigration policies during the Trump administration, shrank the pool of working-age immigrants by 2 million.

More older workers decided to retire during the pandemic and the U.S.-born population is getting older, Peri’s research shows. Arriving immigrants are overwhelmingly younger and seeking work opportunities.

This article was originally published by the Center for Public Integrity, a nonprofit investigative news organization based in Washington, D.C.