One of the biggest political vulnerabilities for President Biden in his reelection bid is the seemingly chaotic surge of migrants entering the United States, mostly along the southwest border. Migration is now one of voters’ top concerns, and they rate Donald Trump, Biden’s challenger, as much better on the issue.
But record numbers of migrants may be helping Biden in a stealthier way: through their positive impact on the US economy. Economists frequently tout the healthy benefits of immigration, and now new research from the Brookings Institution’s Hamilton Project finds that migrants of all stripes — documented, undocumented, and everything in between — may be a big part of the explanation for job growth that has continually exceeded expectations and economic growth that has defied many predictions of a recession.
Brookings researchers Wendy Edelberg and Tara Watson conclude that “a spike in net migration in recent years [helps] explain some of the surprising strength in the economy since 2022. Faster population and labor force growth has meant that employment could grow more quickly than previously believed without adding to inflationary pressures. In addition, greater immigration has likely resulted in greater consumer spending growth, the strength of which has persistently surprised observers.”
Immigration is poorly understood and frequently mischaracterized by fearmongering politicians, so it’s important to categorize the different types of people trying to get into the United States. Many people think people sneaking into the country illegally account for most migrants, but they don't. It's obviously hard to count people who don't pass through an official border post, but the Congressional Budget Office estimates that about 860,000 foreigners entered the country illegally in 2023. Other estimates are lower.
Another 3.2 million migrants showed up at the border in 2023 trying to enter the United States by going through proper immigration procedures. That's where most of the migrant "surge" is coming from, as whole families stream toward the United States from Latin America, Africa, and even China. The number of these arrivals in 2023 was 64% higher than it was two years earlier, and the 2024 pace is already ahead of that of 2023.
These "migrant encounters" normally go one of three ways: Some of these migrants are let in for humanitarian reasons. Some are let in pending a court hearing on whether they deserve asylum status or another form of legal entry. The rest are turned away.
Of those 3.2 million, the United States let in about 800,000 foreigners for humanitarian reasons in fiscal 2023, which ended last September, due to hardship in home countries such as Cuba, Haiti, and Venezuela. Another 1 million were let in temporarily while they await a court hearing on whether they deserve asylum status or some other form of legal residence. That totals about 1.8 million migrants who showed up at the border and were allowed in, according to Hamilton Project estimates.
Contrary to popular belief, authorities also turn back many of those who show up at the border. In 2023, the government deemed at least 580,000 migrants inadmissible, with another 550,000 denied entry under a COVID health emergency provision the Biden administration ended last May. Immigration authorities expelled another 143,000 migrants who lacked a legal basis for being in the country.
Less controversial than the surge of people arriving at the border unannounced are legal immigrants, including green card holders, who number around 1 million per year. There are another 1 million or so "guest workers" who enter with a variety of temporary visas and perform jobs ranging from unskilled farm work to tech programming. These numbers have been relatively steady and aren't part of the "surge."
All told, America’s immigrant population is growing far faster than expected just a few years ago. From 2010 to 2019, net immigration to the United States — those who come minus those who leave — averaged about 900,000 people per year, including all types of migration. Back in 2019, the Congressional Budget Office forecast a continuation of that trend, with an estimate of 1 million new immigrants on net in 2023. Instead, that spiked to 2.3 million net immigrants in 2023, with CBO forecasting 2.4 million in 2024.
Americans worried about foreigners overrunning the country should calm down. The United States suffers from slowing population growth, a declining birth rate, and other unfavorable demographic trends. It also needs more younger workers to pay the taxes that fund Social Security and Medicare, which will soon begin to run short of money barring any changes.
Many economists and business leaders say more legal immigration, including higher quotas for work visas and a more orderly, depoliticized system for processing migrants showing up at the border, would boost employment, productivity, and economic growth. Even undocumented workers who generally don't pay taxes have become important in an economy where workers are scarce.
“It is becoming increasingly clear that legal and undocumented workers are one of a number of reasons why growth, consumption, and productivity in the American economy are increasing,” said Joe Brusuelas, chief economist at consultancy RSM. Higher levels of legal immigration might also reduce the incentive to sneak in illegally.
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The Brookings researchers found that new arrivals may have padded the economy during the last couple of years in a few ways. First, they contend that US population growth has been larger than official estimates since 2021 because of the surge in migration. The majority of those migrants get jobs, whether on or off the books, boosting the size of the labor force by more than official estimates. They also think the larger labor force allows the US economy to absorb more workers without a rise in unemployment or inflation.
That actually happened in 2023, when the economy added a remarkable 255,000 new jobs per month, two to four times what would be plausible at prior levels of immigration, according to the researchers. The findings also dispel the mistaken notion that migrants come to the United States primarily for unemployment benefits and freebies. In reality, foreign-born people in the United States are more likely to work than those who are native-born, and there are many requirements for federal benefits that broadly exclude the undocumented.
None of this is an argument for continuing the US immigration system in its dilapidated state. Most of the migrants allowed in on a temporary basis eventually get a hearing before an immigration judge who decides if they’re eligible to stay, but it can take five to 10 years to work through the queue. By then, some of them have established roots and been paying taxes for years, which makes deportation counterproductive. Others merge into the underground economy and disappear, joining the 12 million or so foreigners who remain in the United States without legal status.
Biden supports a bipartisan plan some legislators drew up earlier this year that would have made it harder for migrants to qualify for entry and set a ceiling on daily entrants, allowing the president to close the border temporarily. But Republicans backed away from the plan after Trump urged them to, and there’s little chance Congress will pass immigration fixes anytime soon. Biden has suggested he might try something by executive action but that would face legal challenges and might not stand.
Trump, who’s running for another presidential term, would restart efforts to build a border wall and be more aggressive about using presidential authority to keep migrants out. But many of Trump’s executive actions got overturned as well, and the main reason migration fell under Trump was the 2020 COVID outbreak, not the wall or any other Trump move.
What both candidates should pursue is policies that fix the problems without reversing the benefits we seem to be enjoying inadvertently. Sometimes the economists turn out to be right.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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