The U.S. population grew at its slowest pace in history in 2021, but the tide may be turning.
One factor adding fuel to America’s inflation fire has been rising wages, stemming from shortage of workers that was in part driven by Trump-era immigration policies and rhetoric that amounted to hanging a “not-welcome” sign at the U.S. border.
This analysis only includes immigration levels through the end of last June, but preliminary data from the Department of Homeland Security show a four-fold increase in the number of immigrants obtaining lawful permanent resident status from the first quarter of 2021 to the fourth. He attributed the recent rise in illegal immigration to President Biden’s decision to end the remain-in-Mexico policy which forced asylum seekers to leave the U.S. while their claims are processed, as well as plans to eliminate COVID emergency measures that have enabled border officials to more expeditiously turn away migrants at the southern border.
“At the same time we didn’t see a huge, immediate drop in legal immigration because for every denied application there’s another person waiting in line,” she said. “There’s always another person ready to apply.” A rebound in immigration levels could be an important antidote for broad structural forces that are driving the labor-market shortage and putting upward pressure on prices, according to economist Charles Goodhart, formerly of the Bank of England.
“Immigration is very important to the U.S., without it, the working age population would start shrinking very soon,” Goodhart said. “The issue now really is whether an increased scale of immigration would be politically acceptable,” he added, noting that both the election of Donald Trump in the U.S. and the Brexit vote in Britain were powered in-part by anti-immigration sentiment.
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