HR Policy Association

Election Roundup: The U.S. Immigration Debate and Its Economic Implications

Economists acknowledge that immigrants have significantly bolstered America's post-COVID economy – making it one of the strongest globally. However, the country remains embroiled in a contentious debate over the costs and benefits of these new arrivals, further intensified by the current presidential campaign.

To understand each presidential candidate’s stance on this issue and the potential impact on the workforce and economy, let's examine their current positions:

Trump’s immigration plan: If elected in November, Trump has pledged to undertake the largest deportation effort in U.S. history, targeting millions of undocumented immigrants. Additionally, Trump aims to restore the COVID-19-era Title 42 policy, which allowed border authorities to quickly return immigrants to Mexico without the chance to claim asylum, he told Time Magazine in an interview. Trump asserts that he can implement these measures through executive actions, bypassing the need for congressional approval.

Biden’s immigration plan: Biden’s approach also involves toughened border enforcement. Recently, he issued an executive action barring migrants who cross the border illegally from receiving asylum when the border is overwhelmed. 

Biden also supports congressional funding to hire more border patrol agents, immigration judges, and asylum officers to manage the increasing number of undocumented immigrants and asylum seekers. His proposed budget aims to double the number of refugees admitted to the U.S., potentially reaching 125,000 in 2024. Furthermore, just this week, Biden announced a new policy to protect the undocumented spouses of U.S. citizens from deportation.

Impact on the workforce and economy: According to Moody’s Analytics, a group which provides economic research regarding risk, performance and financial modeling, Trump’s policies could drastically reduce net immigration to the U.S., from about 3.3 million last year to just a few hundred thousand annually. In contrast, Biden’s plan would maintain the historical average of about 1 million new immigrants per year.

Immigrants, both legal and undocumented, have driven labor force growth, mitigating pandemic-induced worker shortages over the past few years. This influx has also slowed wage growth, contributing to inflation. According to RBC Capital Markets, undocumented immigrants alone accounted for approximately one-third of U.S. employment gains last year, adding about 1 million jobs. 

Economists warn that severely constraining immigration would reverse these gains, especially in industries reliant on foreign-born labor such as agriculture, construction, technology, restaurants, hotels, and retail. This reduction in the labor supply would dampen economic growth as companies struggle with fewer workers, leading to higher wages and potentially reigniting inflation. Moody’s projects that under Trump’s plan, inflation could be about 0.3 percentage points higher next year compared to Biden’s plan. By 2028, there could be 1.5 million fewer jobs and the nation’s economy could be 0.8 percentage points smaller.

The rolling retirement of baby boomers exacerbates the issue, as the U.S. faces a labor shortage and decreased population growth.  

Outlook: No matter the election outcomes in November, HR Policy Association will continue to urge policymakers to tackle the U.S. border crisis as a first step toward comprehensive immigration reform. We will also work with Congress and the administration on reforms for employment-based immigration, high-skilled talent access, a citizenship path for STEM graduates, and DACA support. Read the Association's new resource, "How Immigration Strengthens the American Workforce," part of our series "Advancing the American Workforce: Aligning Policy Solutions & Best Practices," for more in-depth coverage of these issues.

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Authors: Chatrane Birbal