Yahoo Finance What everybody misses about the 'migrant crisis'
Critics of President Biden say he’s handled migration poorly, which is why record numbers of migrants have flooded the southwest border during his term. Biden is now trying to improve his standing on the issue with a new executive order meant to keep migrants out.
But the flow of migrants may have a lot less to do with any president’s particular policies than political analysts think. As with much human behavior, economic factors could be a much more powerful root cause.
New research by economist Dany Bahar at the Center for Global Development showed a strong correlation during the last 24 years between the strength of the US labor market and the number of migrants trying to enter the country. Foreigners may not follow the latest data on unemployment or job openings, but they seem to know when there’s work to be had in the United States.
"What is often perceived as a 'border crisis,' Bahar wrote, "is, in many respects, a manifestation of the US economy's labor demands."
Bahar analyzed data going back to 2000 on job openings in the United States and migration patterns. When the US labor market is strong, as measured by the number of job openings per unemployed person, migration goes up. When the labor market weakens, fewer migrants arrive at the border trying to get in.
Labor market tightness hit an all-time high of 2.3 jobs for every unemployed person in April 2022, and it has stayed well above average ever since. The number of migrants arriving at the southwest border began to surge in 2022 and hit a monthly record high last December.
A lot of immigration analysis focuses on lousy conditions in origin countries that compel people to leave, such as dysfunctional economies with few meaningful jobs and high levels of violence. That certainly applies to nations such as Venezuela, Cuba, Nicaragua, and other central American nations, where many of the migrants arriving at the southwest border come from.
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That’s the “push” side of the equation. But the “pull” side matters too, meaning that a strong US job market is more likely to draw migrants, and vice versa. And what seems to be driving record migration under Biden is the need for workers in the economy he’s overseeing.
The correlation, Bahar found, "is much more pronounced over the past few years, when the US has experienced an all-time high in border crossings, as well as an all-time high in labor market tightness.” Since there’s been no particular shock in the origin countries that would drive people out, the pull of the US labor market seems to be the dominant factor.
It’s reasonable to ask whether the same pattern held when Donald Trump was president, since he imposed the most aggressive measures of any modern president to keep migrants out. Yet the correlation between migrant flows and the US labor market held up during Trump’s term. Despite his insistence on building a border wall, keeping Muslims out, and interdicting caravans, border crossings rose under Trump at the same time the US labor market tightened.
That changed when the COVID pandemic arrived in 2020, bringing with it emergency health measures that drastically limited immigration into the country and stayed in place until 2023. As the charts above show, however, the correlation between rising migration and a tightening labor market during the Biden administration is a continuation of the trend that was in place under Trump.
This connection suggests a couple of important things about the heated political debate that dominates migration. First, voters may be overestimating the effect of any presidential policy on how many people come to the border and actually get in, given that economics are a powerful force in their own right.
Bahar’s data going back to 2000 encompasses the presidential administrations of George W. Bush, Barack Obama, Donald Trump, and Joe Biden. “I do not find the relationship between border crossings and labor market tightness to be statistically different across different presidential terms,” Bahar wrote. “The surge in border crossings observed during 2022 and 2023 would have occurred in a similar magnitude regardless of who was sitting in the White House at the time, a Democrat or a Republican."
That, in turn, suggests Biden’s new plan to sharply raise eligibility requirements for migrants making asylum claims when migrant flows are unusually high won’t work. It’s already destined to face legal challenges, and Biden himself has said he thinks it will take congressional legislation, not presidential orders subject to court interpretation, to address migration challenges. Biden’s order could also compel some migrants to try sneaking into the country illegally if they think the odds of getting in on an asylum claim are low.
Another upshot involves the economic consequences of immigration, both legal and illegal. Economists broadly agree that declining birth rates in the United States make more immigration essential in order to stoke economic growth, keep productivity up, and bring in new workers to pay the taxes needed to fund retirement programs, including Social Security and Medicare.
Other economic research has found that the recent surge in migration, both legal and illegal, may be contributing to job and economic growth that has consistently exceeded economist forecasts. While new migrants have overwhelmed the ability of some municipalities to absorb them, they also seem to be getting jobs, earning money, buying stuff, and contributing to economic growth.
Many of the nation’s immigration laws and policies were put in place decades ago and are poorly suited to today’s migration patterns. Republicans and Democrats both exploit the issue for political gain, the main reason attempts to fix the system always flop. At least we can take solace in the prospect that all the migrants lining up and pounding on the door know that something's going right in the US economy.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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