Immigration is back, in the US at least. Over the past two and a half years, immigration into the American labour market has increased by 4mn workers, and the working age immigrant population has now finally reached its pre-pandemic trend level.

This is likely to be a central factor in strong employment growth, particularly in leisure and hospitality. It is also part of the story on increasing workforce participation, as well as being good news for the fight against inflation.

As Apollo’s chief economist Torsten Sløk put it in a recent note to clients, “immigration is a key reason that the US labour market is gradually moving from very overheated to less overheated. The fact that immigration is now moving to levels above 2019 is going to be very positive for the labour market, and for the Fed’s inflation challenge.”

Aside from pulling more women into the workforce, increasing immigration is the only quick way to bolster the labour force in any nation. Birth rates are on the decline in most rich countries, and robots and job-displacing AI software come with their own economic and political disruptions.

In the US, immigration accounted for about half of the growth in the working age population between 1995 and 2014 according to Pew Research. Unfortunately, between Donald Trump’s “build a wall” jingoism and the Covid pandemic, there was then a sharp drop in immigrant workers. Over the course of four years, according to a February paper from the San Francisco Federal Reserve, the Trump administration took 472 executive actions aimed at reducing immigration, from increasing immigration enforcement to freezing refugee admissions to moving away from family immigration. Between 2016 and 2019, the number of new permanent residents dropped 13 per cent and the number of student F1 visas declined 23 per cent.


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