Why immigration is boosting the US economy, according to Nobel economist Paul Krugman

• Immigration provides a huge boost to the economy, according to Paul Krugman.

• Claims that immigrants are taking jobs from Americans aren’t supported by facts, he said.

• Immigration could also be boosting wages and helping tame inflation, he added.

Immigration isn’t taking jobs away from Americans — and it’s actually great for the US economy, according to Nobel laureate Paul Krugman.

In an op-ed for The New York Times, the top economist pointed to economic arguments against immigration, with former President Trump claiming that immigrants have been taking job gains away from native-born Americans in recent years.

However, Krugman said the data don’t support that argument, as the unemployment rate for US-born workers has remained near a historical low of 4.3%, according to Federal Reserve data.

The labor force participation rate among native-born workers has been on the decline, but among prime-age native-born workers, the labor force participation rate has actually been rising, Fed data shows. That’s a solid sign that the stagnation among US workers is largely because of the wave of boomers retiring, Krugman said.

“So the near stagnation of native-born employment isn’t a demand-side issue, in which people aren’t working because they can’t find jobs. It is instead a supply-side issue, in which people aren’t working because they’ve reached retirement age. We’ve been able to achieve large increases in overall employment only because working-age immigrants have been coming to America. If we didn’t have the immigrants, we wouldn’t have the jobs,” Krugman wrote.

There’s also evidence that immigration has helped push wages up, as immigrants do not ultimately compete with US workers for the same jobs. Wages among all workers have shot up 25% since 2020, around the time the employment of foreign-born workers in the US began rising.

Immigration could also be helping the Fed keep a lid on inflation, Krugman said.

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“Immigrants expand supply, but they also contribute to demand. In the aftermath of the pandemic, however, the huge sums spent on aid pumped up demand; this burst of demand was easier to accommodate without sustained inflation because immigration made it possible to achieve rapid growth in employment,” he added.

Other economists and strategists on Wall Street have said immigration could end up being a big boost to the economy. Rising immigration could help the US grow another $7 trillion over the next 10 years, according to a recent projection from the Congressional Budget Office.

“So, no, immigrants aren’t taking our jobs. Everything that happens in the economy hurts someone: There are no doubt some places where immigrants have driven up housing costs, or where native-born Americans or legal immigrants have faced increased job competition. But the scare stories don’t match the facts,” Krugman said.

Read the original article on Business Insider