Coming Down from the Open-Border Sugar High
Illegal immigration looks good in the economic data, but not to American citizens.
by Oren Cass
When it comes to illegal immigration, what goes up had never come down. But the lawlessness during the Biden presidency has now given way to an unprecedented reversal, in which the federal government is acting aggressively to secure the border, enforce the law, deport the deportable, and encourage voluntary departures. A new Pew Research analysis of census data estimates that the U.S. immigrant population, after increasing by 11 million between 2020 and 2025, fell by 1.4 million in the first half of 2025.
The economic implications of this reversal are profound. With enforcement now underway, employment and GDP growth are predictably slowing in the aggregate, as continued healthy growth in the permanent and legal economy gets offset by declines in the now-receding illegal segment. Of course, the economic pundits present the slowdown as a negative consequence of unwise policy. The policy is not unwise, and the consequence is not negative. Enforcing the law is necessary, the consequence is natural, and a proper assessment depends now—as it should have all along—on separating the true performance of the permanent economy from the swings induced by triggering mass illegal immigration and then needing to undo it.
True, the surging immigrant population in recent years led to rapid expansion of the labor market. But in doing so it allowed employers to grow their businesses without investing to boost productivity, instead hiring many more workers—easily exploited ones, to be precise—at low wages. That’s not restrictionist rhetoric, it’s the view of liberal open-borders proponents who have celebrated the flood of low-wage labor as ideal for meeting corporate needs and delivering GDP growth while suppressing wages.
A 2024 report from FWD.us, titled To Lower Inflation, America Needs More Immigration, lamented that “when labor is in short supply relative to demand, employers offer higher wages.” Conversely, “immigration policy that responds quickly to market shifts,” it observed, can “offer relief to employers.” At The Argument last week, Jordan Weissmann celebrated how “the historic post-COVID immigration wave” allowed employers to hire quickly without having to increase wages, which might have happened if, perish the thought, “they were posting help-wanted ads in a job market with a serious labor shortage.”
At the time, the influx was presumed to be permanent—a fait accompli, new facts on the ground, that would simply become part of the national baseline going forward. But if one had understood then that the chaos was temporary, and could and would be corrected, the effects look less like beneficial growth and more like an absurd sugar high. Yes, you can generate higher employment and GDP figures by handing work permits to whomever crosses the border. You can achieve a similar effect by legalizing heroin and asking all dealers to fill out their W-2s. In neither case will you have improved the nation’s long-term economic prospects or the well-being of the typical American household.
The effect of correcting course is illustrated well in a report published last month by the American Enterprise Institute, Immigration Policy and Its Macroeconomic Effects in the Second Trump Administration, which attempts to quantify the employment effects of the Biden and Trump policies. As a baseline, the authors use Bureau of Labor Statistics (BLS) and Congressional Budget Office (CBO) forecasts developed prior to 2020 to estimate potential monthly employment growth of 80,000 to 100,000 in the years from 2022 to 2024. The “unexpected trends in immigration” of those years, they find, doubled potential employment growth to 160,000. (I take the midpoints of their ranges throughout; their full table is presented below.) In other words, roughly half of employment growth, and a substantial share of GDP growth, during the Biden administration resulted from the policy failure of border chaos rather than any policy success in promoting stronger economic fundamentals.
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commonplace.org
Tom |
