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Immigration helps US economy grow: Why Janet Yellen backs migrants decoded
Source: Business Standard
With anti-immigrant sentiments growing in countries like Australia, the UK, the US, and Canada, US Treasury Secretary Janet Yellen has spoken out about the benefits of immigration, asserting its importance for the American economy. Yellen made her case on Thursday during an appearance on CNN’s Axe Files podcast with David Axelrod, describing how immigration supports labour supply, innovation, and economic growth.
“What we see, and this is true with more recent immigration as well, is that immigrants supply their labour, but they also demand goods and services,” Yellen said. “And on balance, it helps the economy grow without actually depriving other people of jobs.” Her remarks come at a time when immigration is a central issue in the US presidential election campaign ahead of the November 5 vote.
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US elections and immigration concerns
Immigration is a divisive issue in the US, with former President Donald Trump pledging to resume border wall construction and limit immigration further. Trump argues that these measures are necessary to protect American jobs.
However, Yellen disagrees with this stance, pointing out that immigrants have filled crucial labour gaps, particularly as the US grapples with an ageing population. She asserted that immigration has long been essential for the country’s economic stability and growth.
“Immigration has been an important source of labour force growth at a time when we have an ageing population and our labour force would otherwise be declining over time,” Yellen said. “It would be a loss to our society,” she added, referring to the impact of mass deportations.
Indians in the US: A major demographic
India holds a considerable place in the US immigration landscape, making up about 6% of the country’s foreign-born population. According to a report by the Pew Research Centre, South Asian immigrants, including those from India, are highly educated, with 72% holding advanced degrees. Indian immigrants contribute extensively to fields such as technology, healthcare, and engineering.
Impact on businesses and economic growth
Many economists argue that deporting large numbers of immigrants would lead to job losses for US-born workers as well. “It is likely that for every one million unauthorised immigrant workers removed from the United States, 88,000 US-born workers will be “driven out of employment.” Deporting three million unauthorised immigrant workers per year “would mean 263,000 fewer jobs held by US native workers, compounded each additional year that mass deportations continue,” economist Michael Clemens, in a study for the Peterson Institute for International Economics, said.
Clemens explained that immigration directly affects consumer demand and labour markets, with fewer immigrant workers leading to lower spending in sectors like retail and housing.
The American Immigration Council pointed out that restricting immigration could bring economic consequences. Their analysis suggests that mass deportation could shrink the country’s GDP by as much as 6.8%, largely due to the loss of consumer spending by immigrant communities. Clemens noted that fewer workers would mean businesses might look for alternatives that reduce dependence on low-skill labour, affecting job availability for US-born workers too.
In 2022, Yellen addressed immigrants, saying, “Your decision to come to America and pursue a life here has made our country better.”
Key points about Yellen’s views on immigration
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Yellen believes immigration strengthens the US economy by filling labour gaps and increasing consumer demand. -
She said that immigrants do not take jobs away from US citizens but rather create additional demand for goods and services. -
Economists warn that mass deportation or restrictions could result in job losses for US-born workers and a GDP reduction of up to 6.8%.
First Published: Oct 04 2024 | 11:41 AM IST
