More on the positive effect on immigration on recent job growth

A Brookings paper issued on March 7 looks at the effect of the surge in immigration on the U.S. economy in recent years, which I have noted several times (including here, 3 million new workers). It estimates that, compared to forecasts for 2023 made in pre-pandemic 2019, there were an average increase in the workforce of 160,000 – 200,000 actual versus the 2019 forecast of 60,000 – 100,000. Such a relative size of disparity occurred in 2022 appears to continue into 2024. The authors say this contribution to employment by the added supply of workers may account for the strong growth in consumer spending as well as job growth.

They say this added 0.1 points to the growth in GDP in 2023, that is, added a very little to the 2023’s GDP growth rate of 3.1%. More importantly, it staved off risk of a recession, and due to the added supply did not force up wages (perhaps except for low wage jobs, which remain hard to fill such as in hotel housekeeping and retail).

However – both Canada and Australia have noted their rise in immigration as helping to drive up housing costs. I do not think this has been addressed for the U.S.

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