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The Migrant Surge and the ‘Shelter’ Inflation of 2024
Cheap labor ain’t always cheap — and somebody ought to look into it
By Andrew R. Arthur on April 19, 2024
I recently discussed what proponents are lauding as the economic benefits of an unprecedented surge in both legal and illegal alien workers into the United States under the Biden administration, and identified serious downsides decision-makers weren’t considering — including the effects migration is imposing on resources for “housing, education, health care, and sustenance”. Thereafter, the latest inflation numbers came out, showing an unexpectedly high 3.5 percent increase in costs, year over year, in March. Half of that rise was driven by increases in the costs of gasoline and, critically, “shelter”. Economic pundits should realize cheap labor ain’t always cheap and take a look to see whether there’s a connection.
Immigrant Workers and the Growth in GDP. The U.S. Bureau of Economic Analysis defines U.S. GDP as “a comprehensive measure of U.S. economic activity”, which “measures the value of the final goods and services produced in the United States”.
According to a recent analysis by Ernie Tedeschi, erstwhile chief economist for the White House Council of Economic Advisers:
US [Gross Domestic Product, “GDP”] has grown by 8.2% since just before the pandemic, almost twice as fast as the next-best performer in the G7. The rise in the immigrant population since the end of 2019 accounts for at least a fifth (1.6 percentage points) of that US growth, accounting for direct labor supply, unemployment rate, and productivity effects. Absent immigration, the US labor supply would have shrunk by 1.2 million since 2019. Instead, it expanded by 2 million.
https://cis.org/Arthur/Migrant-Surge-and-Shelter-Inflation-2024
