On the eve of the 2020 election Donald Trump, in a post on the platform then known as Twitter, told voters that “This election is a choice between a TRUMP RECOVERY or a BIDEN DEPRESSION.” Not quite. Since President Joe Biden took office, the United States has gained 15.7 million jobs.
Trump, however, has been dismissing the good news on employment, claiming that all the job gains are going to illegal immigrants. In a recent column I addressed his further claim that immigration has had a devastating effect on Black workers. (It hasn’t.)
What is true, however, is that a lot of recent employment growth has involved immigrants. But have their job gains come at the expense of the native-born?
No. But how do we know that? And how should we think about the effect of recent immigration on jobs?
Before I present numbers, there are three qualifications to consider.
First, while we have monthly estimates for employment that distinguish between native-born and foreign-born workers (although they don’t separate out those lacking legal status), these numbers aren’t adjusted for seasonal variation. Rather than try to roll my own seasonal adjustment, I’ll just use 12-month averages, which are good enough for current purposes.
Second, many experts believe that the standard numbers, based on the Current Population Survey, underestimate the recent surge in immigration. I’ll note where this makes a difference, but it doesn’t change the overall picture.
Finally, when you’re looking at recent job growth, it matters what you choose as your starting point. Biden inherited an economy still depressed by the effects of COVID-19, and some of the job growth on his watch reflected a recovery from that depressed state. It arguably makes more sense to compare the current economy with the economy on the eve of COVID. I’ll do it both ways, looking at both job growth since 2020 and job growth from the pre-pandemic year 2019.
Since 2020, there have been large increases in employment of both native- and foreign-born workers, but much of that reflected recovery from the pandemic slump. Compared with the pre-pandemic economy, job gains have been much smaller, especially for the native-born. So immigrants have accounted for most job growth — perhaps more than the chart says, if immigration has been understated — although not all of it.
The question, however, is whether the jobs immigrants have taken would have gone to native-born workers if immigration had been lower.
Well, if immigrants were stealing our jobs, we’d expect to see a sharp rise in unemployment among the native-born. We don’t. The unemployment rate among native-born workers is near a historic low.
But some anti-immigrant crusaders argue that unemployment is only low because immigrants have driven native-born Americans entirely out of the labor force; you’re only counted as unemployed if you’re actively seeking a job.
Indeed, the share of native-born adults in the labor force — employed or unemployed — has fallen slightly since 2019.
But this was both predictable and predicted, not because of immigration but as a result of the aging of the native-born population. Congressional Budget Office projections published in January 2020 — when nobody knew that either the pandemic or the immigration surge were coming — had already forecast a decline in the labor force participation rate as baby boomers retired.
So the near stagnation of native-born employment isn’t a demand-side issue, in which people aren’t working because they can’t find jobs. It is instead a supply-side issue, in which people aren’t working because they’ve reached retirement age. We’ve been able to achieve large increases in overall employment only because working-age immigrants have been coming to America. If we didn’t have the immigrants, we wouldn’t have the jobs.
What about the impact of immigration on wages? A few decades ago many economists, myself included, believed that immigrants with low levels of formal education were in effect competing with native-born workers who also lacked degrees. But most labor economists now believe that immigrants don’t do much head-to-head competition with native-born workers; they bring different skills and take different jobs. And the past few years, with elevated immigration, have also been an era of exceptional growth in wages for the worst paid.
So none of these negative claims about the effects of immigration hold up. But are there important positive effects? (Aside from the benefits to the immigrants themselves, which can be really large — I am very glad, for multiple reasons, that my grandparents left the Russian Empire.)
There’s a good although not ironclad case that immigration has helped limit inflation in recent years. Normally, as Jerome Powell, chair of the Federal Reserve, recently noted, immigration is more or less neutral in its effects on inflation: Immigrants expand supply, but they also contribute to demand. In the aftermath of the pandemic, however, the huge sums spent on aid pumped up demand; this burst of demand was easier to accommodate without sustained inflation because immigration made it possible to achieve rapid growth in employment.
In the longer run, the big story is fiscal. Adult immigrants tend to be working age, which means that they will spend years paying taxes before they become eligible for Medicare and Social Security, which constitute a large part of federal spending. And while this point is a bit brutal, undocumented immigrants are especially good for the budget, because they pay payroll taxes (which are collected by employers) without being eligible for future benefits.
So, no, immigrants aren’t taking our jobs. Everything that happens in the economy hurts someone: There are no doubt some places where immigrants have driven up housing costs, or where native-born Americans or legal immigrants have faced increased job competition. But the scare stories don’t match the facts.
