The US added 272,000 jobs in May, coming in higher than projected. The Hamilton Project Director and Brookings Institution Senior Fellow in Economic Studies Wendy Edelberg joins Morning Brief to discuss the impact of immigration on the jobs market.
"To understand today’s labor market, you have to understand what’s happening with immigration. The surge in immigration has radically changed the labor market numbers that we’re seeing," Edelberg says. She explains that immigration in 2022 and 2023 amounted to about 5.5 million people, contributing to a growing labor supply. "Given the surge in immigration, a stable employment number is more like 200,000 a month. So basically, take whatever you thought you understood about the labor market before and double it. And what that means is that today’s number is still super strong, but it’s not like wildly off the charts, unprecedentedly strong," she adds.
President Biden signed an executive order this week that will restrict immigration from the southern border, which Edelberg notes will most likely be challenged by the courts. If implemented, she expects the number of asylum seekers allowed to work legally to reduce by a third. However, she notes that it won’t have a big effect on the aggregate US economy: "It’s been able to absorb this surge in immigrants, without a whole lot of disruption. The labor market has expanded in terms of supply, and at the same time, we’ve seen an increase in labor demand that’s been able to hire all these people. The labor market is very strong, both for foreign-born workers and for native-born workers."
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