The Trump administration’s hardline immigration policy is slowing down both population and job growth in the U.S.
An analysis from the Federal Reserve earlier this year found that an immigration slowdown had heavily weighed on labor growth, resulting in the breakeven rate, the monthly jobs gain needed to keep unemployment at bay, dropping close to zero.
“Importantly, this analysis does not conclude that the current labor market is on solid footing, rather just that low population growth and near-zero employment growth are not by themselves necessarily indicative of weakness,” the Fed economists wrote.
They specifically noted that the downward turn in population growth is due to the change in U.S. immigration patterns, writing that they have “limited parallels in other advanced economies and may evolve more rapidly than in past episodes experienced by other countries.”
The White House did not immediately return a request for comment.
Additional research from the Yale Budget Lab also shows that productivity costs have slowed, and more concerningly, that the slowing of immigration’s impact on the job market could outlast the Trump administration.
“At a time when policymakers are hoping for a boom from increased productivity growth, decreased immigration undermines that goal by removing entrepreneurs (and their children) who would have started new businesses,” Abhi Gupta, an economist at Yale Budget Lab and author of the research, told Axios.
The Yale report found that the immigration slowdown could leave the country with 4.6 million fewer working-age people by 2033 than it would have had it not slowed down under the Trump administration.
“Fewer immigrants today leaves a demographic echo lasting decades, leading to persistently fewer entrepreneurs and a less dynamic economy,” Gupta added.
The Congressional Budget Office has also projected that the labor force growth will slow down over the next decade.
