For years, the American public has been sold a simple, lazy story — immigrants are taking American jobs.
But as job growth fell during President Trump’s first year back in office, something funny began to happen. To explain away this slowdown, White House officials started pointing to a culprit that should have been — by their own logic — surprising. Historically low immigration.
In February, Kevin Hassett – Director of the Economic Council and one-time Fed Chair-hopeful – went on CNBC to address the previous month’s weak jobs report. According to Hassett, lower job growth was “to be expected” as immigration restrictions and enforcement had led to lower population growth.
And while his logic was sound, it was also utterly inconsistent with the administration’s previous stance. If immigrants had indeed been taking jobs away from native-born Americans, shouldn’t the pattern of overall employment growth remained largely unchanged?
Also in February, Peter Navarro admitted that a higher level of immigration under Biden was directly tied to higher job growth, and we needed to “revise our expectations down significantly” for monthly growth rates. In other words – fewer immigrants means fewer jobs.
This concession directly undercuts the entire narrative Trump and his team have been selling American citizens for more than a decade. It seems they’ve suddenly caught on to a fact that economists have long been aware of — immigrants don’t simply fill jobs, but also create them.
Or perhaps — they’ve been lying through their teeth this entire time.
The reason the “immigrants are taking our jobs” narrative is so convincing is because it relies on seeing only half the story. It relies on viewing an immigrant solely through the lens of “worker” — an extra pair of hands, a fellow job applicant, competition.
But here’s the thing. There is no fixed number of jobs in an economy, just waiting to be handed out. This belief — the idea that there is only so much work to go around — is also known as the lump of labor fallacy. Key word – fallacy.
This view focuses on one side of the economic equation. It tries to evaluate the effect of a change in labor supply while assuming all other aspects of the economy will remain unchanged. This is an example of what economists like to call partial equilibrium.
But to understand the true, full impact of immigration, you must look at the entire picture. The general equilibrium.
The reality is that immigrants, like all people, are both supply and demand bundled together. They buy groceries, pay rent, catch the bus, and go to the dentist. They get their car fixed, order takeaway on a Wednesday night, and buy birthday presents for their kids. And with greater demand for goods and services comes a greater demand for labor — hence, more jobs.
Immigrants also bring skills, ideas, and know-how that can complement native-born workers – making them more effective and increasing productivity.
And immigrants start businesses at higher rates than native-born Americans — creating even more opportunities for work that weren’t there before. Think about it — someone who’s decided to leave their home country, cross a border, and start over from scratch isn’t exactly the type of bloke to sit quietly in a corner and never take a risk.
In many ways, you can think of immigration like a potluck dinner. Yes, a new attendee will probably eat some of your food. But they also brought a dish to share. When an immigrant arrives, it’s not just one more worker chasing one fixed job. It’s one more person joining and expanding a country’s entire web of economic life.
Wendy Edelberg and her co-authors at Brookings estimate that net migration last year was substantially negative. That is, more people left the country than entered it. That’s a remarkable statistic — and they expect it to happen again this year.
This is a huge shift. It upends decades of history in which immigration helped grow our economy.
The decline is not just a deportation story, either. Far fewer people are arriving in the first place. This is in part due to government restrictions, and in part due to people with options deciding to go somewhere else — taking their skills, know-how, and new ideas with them.
When fewer folks arrive, population growth slows. And so does job growth. Not because immigrants were taking your jobs, but because they were part of the machine, the ecosystem, the economy that generated them in the first place.
Don’t take my word for it. Just ask the Trump administration.
