Immigration to Boost US GDP by $7T over Decade, CBO Says

https://www.bloomberg.com/news/articles/2024-02-08/immigration-to-boost-us-gdp-by-7-trillion-over-decade-cbo-says

by consumer451 • 2 years ago

28 32 2 years ago

Dig1t• 2 years ago

Migrant surge will lift demand and increase the labor force
Wages, however, will rise more slowly, in part reflecting the increase in the number of lower skilled workers

TLDR: increased immigration will suppress wages for common people while the rich and powerful benefit massively.

aqme282• 2 years ago

That’s not how I read the second point. More low paid workers will of course suppress average wages, but that says nothing about the wages of an individual longitudinally

OrvalWintermute2• 2 years ago

I think it will actually hurt people at the very lowest end of the spectrum, that are most vulnerable to price competition

influx• 2 years ago

They are essentially union busters.

Matticus_Rex6• 2 years ago

TLDR: increased immigration will suppress wages for common people while the rich and powerful benefit massively.

That's not in line with the econ literature in this area. There's some suggestion in the literature that under some circumstances it might suppress wages for males who didn't complete high school, but additionally it will have significant positive effects on prices of lots of things that demographic (and others) buy.

willcipriano• 2 years ago

Higher GDP, lower GDP per capita.

Not a great deal for workers.

hiddencost4• 2 years ago

That's nonsense.

OrvalWintermute2• 2 years ago

This article sounds like propaganda.

hiddencost4• 2 years ago

It's not. CBO is consistently reliable.

Matticus_Rex6• 2 years ago

Nearly every econ paper on the economic benefits of immigration sounds like propaganda to people who aren't familiar with the literature, because the estimates of the effects are absolutely massive. It's not intuitive to people, because they don't understand the massive efficiency gains from trade in enlarging the pie. To most people the entire idea of pies that aren't fixed is unintuitive.

User232• 2 years ago

That explains why mass immigration has been driving down real housing and health care costs. The pie, it grows! California has never been a more affordable place to live and start a family.

fallingknife• 2 years ago

Never believe an economist when they say "x will cause y." They didn't predict inflation. Then they predicted that fighting it would cause a big recession, and it didn't. They seem pretty good at measuring the current state of things, but the whole field has very low predictive power.

hiddencost4• 2 years ago

CBO tends to have a very good reputation actually.

Matticus_Rex6• 2 years ago

Plenty of economists predicted inflation lol

EDIT: To be clear, I think more of them should have, and it's shameful that they didn't. But the old Econ orthodoxy would have, and this detour from the idea that printing money causes inflation is a fairly recent thing, and wasn't by any means a consensus position.

dandesim2• 2 years ago

First, you're lumping every economist into a single entity. Different economists can look at the same information and determine different outcomes. It is more subjective than objective.

That said, many economists did warn that stimulus money would lead to inflation, however there were many people in dire need which justified the 'greater good' approach to it. As to fighting said inflation, many economists believed we would have the 'soft landing' that we are heading for. They warned fighting too hard would lead to a recession, as in the harder and higher interest rates go, the more likely a recession would become.

Were there economists on the other sides of these beliefs? Yes, so that's why weighing the multitude of opinions and getting toward a consensus comes into play.

User232• 2 years ago

  GDP = C + G + I + NX

  C = Consumption
  G = Government spending
  I = Investment
  NX = Net exports

Which of these exactly is immigration going to boost and how will it sum to $7 trillion? My money is overwhelmingly on G for mass low skill immigration. It’s easy to see how it will increase strain on the public purse.

Needless to say GDP is not necessarily the right metric to optimize for. It’s kind of like BMI in that way. Useful when used properly, not so much when other factors are ignored.

Edit: I’m not interested in rhetoric. I want to see how the numbers add up. Government spending is the likely candidate.

hiddencost4• 2 years ago

Wrong. It'll increase productivity, given the acute labor shortage were facing. Immigration has always been a net positive.

floydnoel• 2 years ago

well, there's no such thing as a true shortage without price controls.

I am quite surprised that anyone believes there is a labor shortage. are you a mega-corp CEO perhaps?

broken_clock• 2 years ago

Consumption because they're people and spend on things.

Investment because immigrants tend to make a lot of money and (some) culturally save and invest a lot.

Net exports because immigrants work and produce things.

2OEH8eoCRo0• 2 years ago

Why wouldn't more bodies increase every one of those variables? More bodies consume more, produce more, the govt spends more, and we have more things to export.

dandesim2• 2 years ago

Consumption - They are people who will buy things. They will also add labor to the market, making goods less expensive for others to purchase.

Government Spending - Investment in industries like energy, infrastructure, and chip manufacturing all needs labor. With a ~3% unemployment rate that's going to be hard to come by.

Investment - Immigrants will have money to save and invest. Many small businesses are owned by immigrant families.

Net exports - Lower skilled factory labor is in demand and hard to come by. Can't make stuff in America if there is no one to make it.

tlivolsi2• 2 years ago

How much will the predicted spending on entitlements increase alongside this predicted GDP increase? More people = more entitlement spending, which is a serious long-term problem that needs to be addressed.

Matticus_Rex6• 2 years ago

Given that both legal immigrants and undocumented immigrants are net tax donors on average overall, less than they pay in.

tlivolsi2• 2 years ago

I just looked it up, and that does appear to be the case.

pstrateman• 2 years ago

People keep saying this, but what rigorous study is there to demonstrate this to be true?

Assuming it is true, immigration has a considerable pressure on housing prices.

It turns out people are willing to spend basically everything they can to not be homeless, so even a slight influence in supply and demand for housing causes a massive price shift.

Smoosh• 2 years ago

Here in Australia, immigration has been one of the drivers of economic growth over the past couple of decades.

https://www.visaverge.com/questions/the-impact-of-immigratio...

masteruvpuppetz• 2 years ago

https://archive.ph/JoTBr

Immigration to Boost US GDP by $7T over Decade, CBO Says

Related Stories