An immigration surge to the United States has had immense effects on the economy, walking out with bumps in job growth and output. Largely from the easing of pandemic-related travel restrictions, the influx has added millions to the labor force. In this regard, the Congressional Budget Office estimated an additional 5.2 million persons to participate in the labor market in 2033, largely due to a boost in net immigration. It is projected to raise the level of GDP by approximately $8.9 trillion, and federal tax revenues by $1.2 trillion over the next decade. The inflows of immigrant workers also helped alleviate labor shortages in food services and health care—industries that rely disproportionately on immigrant workers.
More importantly, this increased immigration cooled off an overheated labor market, however. It has tempered wage growth and reduced job vacancies across industries and states by adding to the supply of labor. For example, within the leisure and hospitality sector, a large increase in immigrant employment goes commensurate with a precipitous fall in the rate of job vacancies. This pattern is replicated in key destination states that received larger inflows of immigrant workers, including California and Arizona, who have experienced larger declines in job vacancy rates.
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