New Waves of Immigration

Among the liveliest elements of our work are question-and-answer segments when we present to clients. We never know what will come up. The thorniest question I have received of late was, “What do you think of the immigration problem?”

This query comes both from those who perceive that the U.S. has allowed in too many immigrants and others who think we need more newcomers to address a shortage of workers. Answering is also complicated by the challenge in assessing just how many new entrants have arrived. Recent work on this latter front has placed the immigration debate front and center.

Immigration has always been a contentious but fundamental component of the dynamic U.S. labor market. The American economy wouldn’t be the world leader without immigrants, but the continual inflow of migrants at the southern border has raised questions over whether the current state is helpful or harmful to growth and inflation. That is what we will focus on, preferring to leave policy questions to politicians.

US Annual Population Growth and Net Immigration by Category

Estimates of the population change due to activity at the southern border are wide ranging, but uniformly upward. Pre-COVID, the nation could expect about 900,000 working immigrants per year. Among official approximations, the Congressional Budget Office (CBO) has published the highest estimate of 3.3 million arrivals in 2023. The CBO’s inclusion of the “other foreign nationals” arriving in the busy second half of 2023 gives credibility to their estimate.