Immigration supplementing labor force and job growth, says Dallas Fed
Writer: Mirella Franzese
August 2024 — With immigration at the forefront of Texas’ heated Senate race, a report by the Dallas Federal Reserve Bank is shining a light on the economic complexities of the nation’s divisive border policies.
The report points to immigration as the economic engine powering Texas’ steady GDP growth. The state currently ranks as the 8th largest economy in the world with a valuation above $2.4 trillion.
As of 2024, the city of Dallas is home to 300,000 immigrants, who make up 23.2% of the population and 28.4% of the total employed labor force. According to the Dallas Federal Reserve Bank, this unprecedented surge in immigration has positively impacted regional population growth, in addition to supplementing labor force and job growth.
Texas’ foreign-born migrant population increased by 2.6 million in 2022 alone — a figure which was expected to reach 3.3 million annually in 2023 and 2024, according to estimates from the Congressional Budget Office (CBO).
The 2023 U.S. Census, by contrast, presented a more cautious estimation of net immigration numbers at just 1.1 million. CBO’s inflated projections, however, factor in illegal entrances into the country from across the border and those released by Customs and Border Protection on humanitarian grounds.
Over the past 12 months, the Texas economy saw the creation of 267,400 new jobs across multiple industries occupied by immigrant laborers — which surpasses the number of jobs created in every other U.S. state. The hospitality, healthcare, construction, and food services industries — among the fastest-growing sectors of the regional economy — experienced record-breaking job-opening rates in the post-pandemic era, which coincided with the start of the immigration boom.
“We’ve been following immigration developments very closely because immigration has grown much faster than we thought it would, and it’s impacting the economy,” said Pia Orrenius, vice president of the Dallas Federal Reserve, as cited by FOX 4 News Dallas-Fort Worth. “The research that is out there suggests we’re creating 70,000 to 100,000 extra jobs per month as a result of record-high immigration.”
Given the accelerated immigration growth trends, Texas’ labor market shortage, caused by a combination of lower birth rates and a predominantly aging populace, will have to be filled by a foreign population that is, by and large, of working age. “Birth Rates are below two, so that means that we are below replacement rates. We cannot replace our own labor force without immigration, so really, it’s the only way to grow,” said Orrenius.
Texas is not the only state undergoing a job shortage. According to the Bureau of Labor Statistics, the national U.S. labor market currently faces a deficit of 2 million workers. As outlined in the Dallas Federal Reserve Bank report, immigration may provide the solution for sustaining current levels of economic output.
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The release of the report also coincides with an ongoing political debate in Washington D.C. about the current state of the U.S. immigration policy- which is now taking a central role in the fight for the Texas Senate position between U.S. Rep Colin Allred (D) and U.S Sen. Ted Cruz (R). In March of this year, the U.S. Supreme Court gave Texas law enforcement the temporary power to arrest and detain individuals suspected of entering the country illegally. The law was blocked by the Biden administration, who sued the state of Texas.
“There are undocumented individuals who have been living in the U.S. for decades but are unable to get legalized because of so many different barriers in our immigration laws. These are individuals who have families, own businesses, and pay taxes but because of the nature of immigration laws here, they just don’t qualify to become lawful residents,” Rosa Maria Berdeja, owner of The Law Office of Rosa Maria Berdeja, told Invest:.
Despite heated political controversy, the impact of foreign immigration to the Texan economy cannot be understated. Forecasts by the CBO for the next 10 years predict a steady growth trajectory for the state’s gross domestic product as a result of the growing migration influx. Estimates suggest that 5.2 million immigrants (first and second-generation) will join the 2033 labor pool, boosting GDP by $8.9 trillion and federal tax revenues by $1.2 trillion.
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