The study says immigrants will strongly boost the economy in the next decade

The study says immigrants will strongly boost the economy in the next decade

The increase in immigration is expected to boost the US economy by about $7 trillion over the next decade by creating a workforce and increasing demand, according to a report from the World Bank. Congressional Budget Office (CBO).

The office, which is independent of political parties, said this growth would be good for the federal government, because it would increase revenues by about a trillion dollars more than could have been achieved in that period.

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However, wages will grow more slowly, in part because of the larger number of low-skilled workers, according to Congressional Budget Office estimates.

“Population growth stimulates demand for goods, services, and housing,” the Congressional Budget Office says in its report on economic and budget projections for the next 10 years.

“It also enhances the productive capacity of the economy by increasing the size of the workforce.”

The increase in immigration stems primarily from people entering the United States illegally and those being released by Customs and Border Protection (CBP) on humanitarian grounds or with an appointment to appear before an immigration judge.

After some time, many of these immigrants join the workforce.

The Congressional Budget Office's forecast comes amid a heated political debate in Washington about the wave of migration on the border with Mexico and what must be done to control it.

Last Wednesday, the Senate dealt a fatal blow to attempts to impose new border restrictions, blocking a carefully negotiated bipartisan plan endorsed by President Joe Biden after his predecessor, Donald Trump, and Republican leaders in the House of Representatives condemned it.

The Congressional Budget Office report highlights some of the economic benefits of increased immigration, which Federal Reserve Chair Jerome Powell raised in an interview with CBS News' 60 Minutes on February 4.

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“The American economy has benefited from immigration” over time, Powell said, though he insisted he had not told Congress what to do about the issue.

The Congressional Budget Office projects that increased immigration will stimulate inflation-adjusted GDP growth by an average of 0.2 percentage points annually between 2024 and 2034, making it about 2% larger in 2034 than under other circumstances.

In its report, the Central Bank of Oman raised its 2033 labor force estimate by 5.2 million people, mainly due to net inflow from abroad.

Labor force growth will put downward pressure on average inflation-adjusted wages, according to the bureau's estimates.

This effect is expected to partially reverse after 2027, but wages will still be slightly lower than they would be under other circumstances in 2034.

The low wages are partly due to many immigrants having to work in low-paid jobs, which leads to lower average wages.

But growth in labor supply also plays a role, the report notes.

The Congressional Budget Office has warned that its demographic projections are highly uncertain, especially for years into the future.

In its calculations, the office assumes that the migration wave that began in 2022 will continue until 2026 and that it will decrease from there.

Congressional Budget Office Director Phil Swagel highlighted that the office did not take into account housing expenses and other items that states and local authorities must cover due to immigration because they are outside their scope of work.

He also declined to comment on initiatives in Congress to stem the flow of migrants.

By Rich Miller of Bloomberg

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