The surge in immigration is a $7 trillion gift to the economy

As the economy has improved and consumers have begun recognizing that improvement, Republicans have pivoted to attacking President Biden on a different policy weakness: immigration. After all, virtually everyone — Democrats included — seems to agree the issue is a serious problem.

But what if that premise is wrong? Voters and political strategists have treated our country’s ability to draw immigrants from around the world as a curse; it could be a blessing, if only we could get out of our own way.

Consider a few numbers: Last week, the nonpartisan Congressional Budget Office released updated 10-year economic and budget forecasts. The numbers look significantly better than they did a year earlier, and immigration is a key reason.

The CBO has now factored in a previously unexpected surge in immigration that began in 2022, which the agency assumes will persist for several years. These immigrants are more likely to work than their native-born counterparts, largely because immigrants skew younger. This infusion of working-age immigrants will more than offset the expected retirement of the aging, native-born population.

This will in turn lead to better economic growth. As CBO Director Phill Swagel wrote in a note accompanying the forecasts: As a result of these immigration-driven revisions to the size of the labor force, “we estimate that, from 2023 to 2034, GDP will be greater by about $7 trillion and revenues will be greater by about $1 trillion than they would have been otherwise.”

Got that? The surprise increase in immigration has led a multitrillion-dollar windfall for both the overall economy and federal tax coffers.

As I reported in 2021, “missing” immigrant workers — initially because of pandemic-driven border closures and later because of backlogged immigration agencies — contributed to labor shortages and supply-chain problems. But since then, work-permit approvals and other bureaucratic processes have accelerated. Federal Reserve officials noted that this normalization of immigration numbers boosted job growth and helped unwind supply-chain kinks.

Over the long term, Federal Reserve Chair Jerome H. Powell recently said on CBS News’s “60 Minutes,” “the U.S. economy has benefited from immigration.

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