Rebound in Immigration Comes to Economy's Aid
The U.S. economy’s prospects of a soft landing are getting a boost from an unexpected source: a historic rise in immigration. The inflow of foreign-born workers, which had slowed to a trickle in the years up to and including the pandemic, is now rising briskly as the U.S. catches up on a backlog of visa applications and the Biden administration accelerates work permits.
This week, it said it would offer work permits to 470,000 Venezuelan migrants. The effect of that action won’t be immediate since it is taking an average of 12 months to issue the applicable work permit. Still, it is one of a series of executive actions that has had the effect of boosting the inflow of foreign-born workers. That is helping ease labor shortages and wage and price pressure. While that alone doesn’t remove the risk of recession, it makes it a bit easier for the Federal Reserve to bring inflation down without a significant rise in unemployment—a so-called soft landing.
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Foreign-born workers’ share of the labor force—those working or looking for work—reached 18% in 2022, the highest level on record going back to 1996, according to the Labor Department. It has climbed further this year to an average of 18.5% through August, not adjusted for seasonal variation. The jump in the share of foreign-born workers in the labor force reflects an easing in immigration backlogs that accumulated during the Trump administration and at the onset of the Covid-19 pandemic.
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By 2022, though, the U.S. granted more than a million work visas, hitting a 25-year high, according to an analysis of government figures by USAFacts, a nonpartisan data provider. It issued nearly 500,000 green cards to immigrants moving to the U.S. permanently, the highest total since 2018, government data show. In addition, the administration has made unprecedented use of a little-known immigration power known as humanitarian parole to quickly and legally let in hundreds of thousands of people from places such as Ukraine, Afghanistan and Venezuela. All of this is making a palpable difference to employers who have struggled to find and retain workers.
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