Illegal Immigration ‘Surge’ Will Put ‘Downward Pressure’ On Wages For Years, CBO Says

The Congressional Budget Office (CBO) projects that the ongoing surge in immigration, both legal and illegal, will put “downward pressure” on inflation-adjusted wages through 2034, according to a recently released report.

The downward effect on real wages will continue until 2027, at which point it will “partially reverse,” with immigration still expected to cause average real wages to be lower in 2034 than they otherwise would be, according to CBO. CBO did predict some positive impacts of immigration, as well, such as increased GDP growth and an expanded labor force.

The surge in new workers is expected to reduce the amount of available capital, resources like factories or machinery, per worker, as well as work in low paying areas of the economy, both of which will exert a downward pressure on wages, according to CBO. The impact of these variables will decline over time as CBO expects additional capital to be built and workers to gain more skills.

The combined effects of immigration “will cause average real wages to be slightly lower than they would have been otherwise” in 2034, according to CBO. The agency also expects immigrants to “stimulate construction of new homes during the second half of the 2020s.”

Some economists have argued that the arrival of legal and illegal immigrants is causing housing prices to increase in the United States, The Wall Street Journal reported.

Increased immigration will boost economic growth, raising the growth rate of the inflation-adjusted GDP by 0.2% between 2024 and 2034, according to CBO. CBO projects that real GDP per capita, however, will be 0.8% smaller in 2034 because of the surge in immigration.

Americans are widely dissatisfied with President Joe Biden’s approach to the ongoing migration crisis, with 68% disapproving of his handling of the border in a January CBS poll.

U.S. Customs and Border Protection reported the highest monthly total of migrant encounters ever in December 2023, rerecording 302,034 encounters at the southern border. More than 1.5 million migrants crossed the southern border during the 2023 fiscal year.

A CBO spokesperson directed the Daily Caller News Foundation to a statement made by CBO Director Phill Swagel.

Swagel’s statement did not address the impact of increased immigration on wages. The statement did point out the impact CBO found immigration will have on the deficit.

“In our projections, the deficit is also smaller than it was last year because economic output is greater, partly as a result of more people working,” Swagel wrote. “The labor force in 2033 is larger by 5.2 million people, mostly because of higher net immigration.”