Due to President Donald Trump’s immigration policies, the U.S. stands to lose more than half-million people this year. However, economic experts claim that his more intense policies concerning deportations and entry restrictions may reduce the number of immigrant workers, which could negatively impact the economy.
In a recent report from the AEI (American Enterprise Institute), a conservative think tank, some researchers have estimated that the net migration rate for the U.S. may reach as low as negative 525,000 or as high as 115,000 for this year. In their words, “there is a considerable drop in inflows and a bit greater outflows.”
This is in contrast to what Macrotrends reported regarding the U.S. having 330,000 net migrants in 2020, during the high travel restrictions period of the pandemic, and projecting the country would have about 1.3 million in 2024. If the AEI figures come to fruition, it would mark the first time in decades that the U.S. records negative net migration.
Considering that a portion of the U.S. workforce is made up of foreign citizens (around 19.2%, according to the Bureau of Labor), along alongside the considerable amount immigrants in the consumer market, such a decline in immigration would result in a squeeze in labor supply and spending, leading to a drop in GDP of close to 0.4% for the year.
These same concerns were highlighted in a paper published by the Federal Reserve Bank of Dallas last week, which estimates lower immigration could reduce GDP by 0.75 percent to 1.0 percent this year.
“The drop in migrant inflows, and the drop in the foreign-born population more broadly, will have adverse effects on growth in the U.S. labor force, which will spill over into almost every sector of the economy,” Madeline Zavodny, one of the authors of the Dallas Fed paper, remarked in an interview with Newsweek.
This, along with the country’s already low birth rate—and associated economic concerns—is growing stagnation in the proportion of the population that can be termed the ‘working-age’ population.
“The U.S. population is aging,” remarks Zavodny, “and we rely on new immigrants to help fuel growth in the workforce and key sectors, from agriculture to construction to health care.”
Facing some of these concerns, White House spokeswoman Abigail Jackson said, “President Trump’s agenda to deport criminal illegal aliens will improve Americans’ quality of life across the board. American resources, funded by American taxpayers, will no longer be stretched thin and abused by illegals.”
“She went on to explain, “President Trump is ushering in America’s golden age and growing our economy with American workers.”
As a consequence, he told Newsweek, prices in these sectors will likely increase. Giovanni Peri, a labor economist and professor at the University of California, Davis, also talked about the consequences of diminished net inflows. He believes that the job market will be most impacted in construction, agriculture, hospitality, and personal services sectors with lower-skilled jobs.
Listening to her, Wasjulevich. He also noted that fewer foreign workers will have a major impact on real estate, as well as on retail and utilities. Stan Veuger, a senior fellow in economic policy studies at AEI and co-author of the working paper, shared his insights on the matter and mentioned the impact these changes will have on the supply side of the economy.
“While smaller firms will be more at risk of going out of business because of low productivity and margins, larger firms may be able to entice some more replacement workers,” explained Peri concerning the shift in employment.”
“She went on to explain, ‘President Trump is ushering in America’s golden age and growing our economy with American workers.’”
As a result, he mentioned to Newsweek that prices in these areas are likely to rise. Giovanni Peri, a labor economist and professor at the University of California, Davis, also talked about the consequences of net inflows turning negative. He thinks that most of the net inflow will be lost from construction, agriculture, hospitality, and personal services—low-skilled occupations.
Hearing her Wasjulevich. He added that the shortage of foreign workers will greatly affect real estate, as well as retail and utilities. Stan Veuger, a senior fellow in economic policy studies at AEI, co-authored the working paper and shared some of his thoughts, mentioning how these changes might impact the supply side of the economy.
“While smaller firms will be more at risk of going out of business because of low productivity and margins, larger firms may be able to entice some more replacement workers,” Peri said regarding the realignment of jobs.
