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The surge in legal and illegal immigration under the Biden-Harris administration is dramatically changing the overall composition of the U.S. job market.
The large increase in immigrant workers has helped ease the labor shortage, but it has also pushed up unemployment rates for foreign-born workers and the overall workforce.
According to statistics from the Congressional Budget Office (CBO), the United States has seen a net increase of more than 9 million immigrants since the end of 2020.
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A construction worker works at a site in Miami, Fla. According to the Census Bureau, the most common occupation for immigrants is construction worker, followed by maid/house cleaner and cook. (Joe Raedl/Getty Images/Getty Images)
Of these immigrants, approximately 2.6 million are “lawful permanent residents,” which includes green card holders and immigrants who arrived through legal routes such as family visas or work visas.
The remaining 6.5 million foreigners, called “other aliens,” are made up of people who crossed the southern border without prior authorization, a population that CBO projects will swell to 8.7 million by the end of 2026.
The Bureau of Labor Statistics estimates that in 2023, there will be nearly 30 million foreign-born workers (both permanent and temporary) employed, compared with 131.1 million U.S.-born workers, making the foreign-born about 23 percent of the workforce.
Illegal immigration has become a key issue in this year's presidential election, with critics saying it puts downward pressure on low wages because most immigrants are of working age and competing for low-skill jobs.
Precise details about the composition of the “other aliens” who have arrived since the 2020 surge are hard to come by, but some insights can be gleaned from the Census Bureau’s monthly survey of 60,000 households and from figures from the Transactional Records Access Clearinghouse (TRAC), a database of immigration court documents maintained by Syracuse University.
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Migrants walk off a freight train en route to the US-Mexico border. According to Congressional Budget Office (CBO) statistics, about 6.5 million people have crossed the southern border without prior authorization since 2020. (Getty Images)
The study found that compared with the mainland U.S. population, the immigrant population is younger, less educated, and work-eligible, and is predominantly Spanish-speaking.
Seventy-eight percent are between the ages of 16 and 64, according to the data, compared with 60% of those born in the U.S., according to monthly census data. That's more than 5 million people, or about 3% of the labor force.
That number is expected to grow in the coming years, as it takes at least six months for undocumented workers to obtain work permits. Moreover, while 5% of working-age Americans are unable to work, less than 1% of immigrants in 2020 and beyond report being unable to work.
In addition, recipients of the Deferred Action for Childhood Arrivals (DACA) program for young immigrants are expected to enter the labor market, following new measures announced by President Biden in June to make it easier for recipients to enter the United States. Working visas have been around for many years.
According to the Census Bureau, the most common occupation for immigrants is construction worker, followed by maid, house cleaner and cook.
Additionally, according to TRAC data, Venezuela led the way in sending migrants to court hearings with 14% of the total since the second half of 2020, followed by Mexico with 13% and Honduras with 8.5%.
Immigrants who enter the labor market pay federal taxes in addition to state taxes, helping to reduce the federal deficit.
But a July CBO report found that rising immigration increases state and local government spending, especially in the U.S., where immigration is a major driver of unemployment. About EducationThe budget for spending on areas such as immigration, health care, and housing exceeds revenue. For example, New York City will spend $4.3 billion between July 2022 and March 2024 to accommodate immigrants and comply with existing local and state housing policies.
Additionally, 25 states have policies that provide undocumented immigrant students with tuition assistance at state universities.
Construction workers help build a home on January 5, 2024 in Miami, Florida. (Joe Raedl/Getty Images/Getty Images)
In the labor market, the wages of the burgeoning population of workers start out below those of similarly educated people in the United States, on average, and converge over time to CBO's estimates.
According to the CBO, through 2026, wage growth for people with 12 or fewer years of education will slow as a result of the education increase, meaning that Americans not covered by the education increase will see their wages grow at a slightly lower rate than they would have without the education increase.
“This pattern reverses in later years as innovation-related productivity gains and the growth in the number of less-educated workers increase the demand for more-educated people to work alongside them, leading to slightly higher average wage growth for those not taking part in the surge,” the report said.
The CBO report said the overall unemployment rate was largely unaffected by the immigration surge because immigrants, who do not have work authorization, initially had higher unemployment rates, but after the surge, demand for goods and services increased, causing unemployment rates to fall. However, the latest data from the Bureau of Labor Statistics shows that the unemployment rate rose sharply from a low of 3.7% in November to 4.3% in July, before falling slightly to 4.2% in August.
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Meanwhile, the ADP national employment report released Thursday morning showed the U.S. private sector added fewer jobs than expected in August as the labor market continued to cool amid high interest rates.
Businesses added 99,000 jobs in August, less than the 145,000 increase forecast by LSEG economists and the fewest jobs added in the report since January 2021. The report also revised down July's gain to 111,000, from 122,000 jobs added in the initial report.
Fox Business' Eric Revell contributed to this report.
