Biden’s latest policy shift could have a bigger than intended impact on the nation’s economic performance.
Biden Administration Tightens Border Restrictions
The Biden administration’s latest move to tighten border restrictions is stirring up a lot of interest, especially when it comes to how it might impact the U.S. job market.
Economic Ripples
With immigration being a big factor in recent job growth, tightening the border could shake things up in ways no one expected.
Immigration and Job Growth
For the past few years, immigration has been a major force in driving job growth in the U.S. Now, as Biden aims to curb the flow of migrants, everyone’s wondering: Will this put a damper on the job market and the economy?
Strong Job Market
Historically the job market has been surprisingly strong, even with the challenges of record-high interest rates.
Executive Order Details
But with the new executive order issued on Tuesday, those who cross the Southern border illegally won’t be able to seek asylum. Instead, they’ll be sent back to their home country or to Mexico.
Border Control as a Short-Term Solution
This rule is meant to be temporary until border crossings are under control.
Insights from Standard Chartered Bank
When it comes to numbers, a closer look at the figures reveals the huge impact of immigration on the labor market. According to a report from Standard Chartered Bank, almost half of the non-farm payroll job growth since October 2023 has come from migrants, including asylum-seekers and refugees authorized to work.
Examining the Numbers
The economy has been adding an average of 231,000 jobs per month since October 2023, and without these migrants, that number drops to around 125,000. In the 12 months before that, migrants made up about a third of the monthly job growth.
Job Growth Statistics
Immigration hasn’t just boosted job numbers – it’s also helped consumer spending and GDP. A March Brookings analysis of Congressional Budget Office data showed that higher-than-expected job gains post-pandemic were largely due to immigration.
Consumer Spending and GDP
This boost also led to a 0.2 percentage point increase in consumer spending and a moderate increase in real GDP.
Analyzing Future Job Growth
According to Brookings, immigration helped ease worker shortages in sectors like leisure and hospitality. It also tempered wage growth in certain industries, such as construction and manufacturing, which in turn helped cool inflation.
Concerns and Predictions
There’s a real concern about how the new border restrictions will affect the labor market. Steve Englander from Standard Chartered thinks reducing the number of migrants could lower monthly job growth over time.
Uncertainties in Implementation
However, the main impact might not be clear for a while, especially with legal challenges likely on the horizon.
Insights from Wendy Edelberg
Wendy Edelberg, a senior fellow at Brookings, notes that even with the executive order’s implementation, any changes in economic data might not appear for several months.
White House Perspective
A White House official explained that reforming the immigration system could strengthen the economy, boost the labor supply, and address workforce shortages.
Awaiting the May Jobs Report
All eyes are now on the upcoming May jobs report, which economists expect to show an addition of around 180,000 jobs. This report will give us a better idea of how recent immigrants are still driving job growth despite the new border policies.
Biden’s Border Policy in Focus
Biden’s border policy intends to control illegal immigration, but its broader impact on the economy and job market is still up in the air. The next few months will be crucial as we see how these changes play out.
Political Response
Progressive Democrats and immigration advocates have strongly criticized the decision, drawing parallels between Biden’s border policy and the policies of former President Donald Trump.
Republican Opposition
Republicans have labeled Biden’s order as a mere “political stunt,” done in order to project a stance of heightened action on immigration before the upcoming November elections.
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The post – Could Biden’s Border Crackdown Shake Up the U.S. Job Market? – first appeared on Liberty & Wealth.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
