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US Economy's Secret: Migrant Workers   04/12 06:13

   

   MIAMI (AP) -- Having fled economic and political chaos in Venezuela, Luisana 
Silva now loads carpets for a South Carolina rug company. She earns enough to 
pay rent, buy groceries, gas up her car -- and send money home to her parents.

   Reaching the United States was a harrowing ordeal. Silva, 25, her husband 
and their then-7-year-old daughter braved the treacherous jungles of Panama's 
Darien Gap, traveled the length of Mexico, crossed the Rio Grande and then 
turned themselves in to the U.S. Border Patrol in Brownsville, Texas. Seeking 
asylum, they received a work permit last year and found jobs in Rock Hill, 
South Carolina.

   "My plan is to help my family that much need the money and to grow 
economically here," Silva said.

   Her story amounts to far more than one family's arduous quest for a better 
life. The millions of jobs that Silva and other new immigrant arrivals have 
been filling in the United States appear to solve a riddle that has confounded 
economists for at least a year:

   How has the economy managed to prosper, adding hundreds of thousands of 
jobs, month after month, at a time when the Federal Reserve has aggressively 
raised interest rates to fight inflation -- normally a recipe for a recession?

   Increasingly, the answer appears to be immigrants -- whether living in the 
United States legally or not. The influx of foreign-born adults vastly raised 
the supply of available workers after a U.S. labor shortage had left many 
companies unable to fill jobs.

   More workers filling more jobs and spending more money has helped drive 
economic growth and create still-more job openings. The availability of 
immigrant workers eased the pressure on companies to sharply raise wages and to 
then pass on their higher labor costs to their customers via higher prices that 
feed inflation. Though U.S. inflation remains elevated, it has plummeted from 
its levels of two years ago.

   "There's been something of a mystery -- how are we continuing to get such 
extraordinary strong job growth with inflation still continuing to come down?'' 
said Heidi Shierholz, president of the Economic Policy Institute and a former 
chief economist at the Labor Department. "The immigration numbers being higher 
than what we had thought -- that really does pretty much solve that puzzle.''

   While helping fuel economic growth, immigrants also lie at the heart of an 
incendiary election-year debate over the control of the nation's Southern 
border. In his bid to return to the White House, Donald Trump has attacked 
migrants in often-degrading terms, characterizing them as dangerous criminals 
who are "poisoning the blood" of America and frequently invoking falsehoods 
about migration. Trump has vowed to finish building a border wall and to launch 
the "largest domestic deportation operation in American history." Whether he or 
President Joe Biden wins the election could determine whether the influx of 
immigrants, and their key role in propelling the economy, will endure.

   The boom in immigration caught almost everyone by surprise. In 2019, the 
Congressional Budget Office had estimated that net immigration -- arrivals 
minus departures -- would equal about 1 million in 2023. The actual number, the 
CBO said in a January update, was more than triple that estimate: 3.3 million.

   Thousands of employers desperately needed the new arrivals. The economy -- 
and consumer spending -- had roared back from the pandemic recession. Companies 
were struggling to hire enough workers to keep up with customer orders.

   The problem was compounded by demographic changes: The number of native-born 
Americans in their prime working years -- ages 25 to 54 -- was dropping because 
so many of them had aged out of that category and were nearing or entering 
retirement. This group's numbers have shrunk by 770,000 since February 2020, 
just before COVID-19 slammed the economy.

   Filling the gap has been a wave of immigrants. Over the past four years, the 
number of prime-age workers who either have a job or are looking for one has 
surged by 2.8 million. And nearly all those new labor force entrants -- 2.7 
million, or 96% of them -- were born outside the United States. Immigrants last 
year accounted for a record 18.6% of the labor force, according to the Economic 
Policy Institute's analysis of government data.

   And employers welcomed the help.

   Consider Jan Gautam, CEO of the lodging company Interessant Hotels & Resort 
Management in Orlando, Florida, who said he can't find American-born workers to 
take jobs cleaning rooms and doing laundry in his 44 hotels. Of Interessant's 
3,500 workers, he said, 85% are immigrants.

   "Without employees, you are broken," said Gautam, himself an immigrant from 
India who started working in restaurants as a dishwasher and now owns his own 
company.

   "If you want boost the economy," he said, "it definitely needs to have more 
immigrants coming out to this country."

   Or consider the workforce of the Flood Brothers farm in Maine's "dairy 
capital'' of Clinton. Foreign-born workers make up fully half the farm's staff 
of nearly 50, feeding the cows, tending crops and helping collect the milk -- 
18,000 gallons each day.

   "We cannot do it without them," said Jenni Tilton-Flood, a partner in the 
operation.

   For every unemployed person in Maine, after all, there are two job openings, 
on average.

   "We would not have an economy, in Maine or in the U.S. if we did not have 
highly skilled labor that comes from outside of this country," Tilton-Flood 
said in a phone interview with The Associated Press from her farm.

   "Without immigrants -- both new asylum-seekers as well as our long-term 
immigrant contributors -- we would not be able to do the work that we do," she 
said. "Every single thing that affects the American economy is driven by and 
will only be saved by accepting immigrant labor."

   A study by Wendy Edelberg and Tara Watson, economists at the Brookings 
Institution's Hamilton Project, has concluded that over the past two years, new 
immigrants raised the economy's supply of workers and allowed the United States 
to generate jobs without overheating and accelerating inflation.

   In the past, economists typically estimated that America's employers could 
add no more than 60,000 to 100,000 jobs a month without overheating the economy 
and igniting inflation. But when Edelberg and Watson included the immigration 
surge in their calculations, they found that monthly job growth could be 
roughly twice as high this year -- 160,000 to 200,000 -- without exerting 
upward pressure on inflation.

   "There are significantly more people working in the country," Fed Chair 
Jerome Powell said last week in a speech at Stanford University. Largely 
because of the immigrant influx, Powell said, "it's a bigger economy but not a 
tighter one. Really an unexpected and an unusual thing.''

   Trump has repeatedly attacked Biden's immigration policy over the surge in 
migrants at the Southern border. Only about 27% of the 3.3 million foreigners 
who entered the United States last year did so through as "lawful permanent 
residents'' or on temporary visas, according to Edelberg and Watson's analysis. 
The rest -- 2.4 million -- either came illegally, overstayed their visas, are 
awaiting immigration court proceedings or are on a parole program that lets 
them stay temporarily and sometimes work in the country.

   "So there you have it,'' Douglas Holtz-Eakin, a former CBO director who is 
president of the conservative American Action Forum, wrote in February. "The 
way to solve an inflation crisis is to endure an immigration crisis."

   Many economists suggest that immigrants benefit the U.S. economy in several 
ways. They take generally undesirable, low-paying but essential jobs that most 
U.S.-born Americans won't, like caring for children, the sick and the elderly. 
And they can boost the country's innovation and productivity because they are 
more likely to start their own businesses and obtain patents.

   Ernie Tedeschi, a visiting fellow at Georgetown University's Psaros Center 
and a former Biden economic adviser, calculates that the burst of immigration 
has accounted for about a fifth of the economy's growth over the past four 
years.

   Critics counter that a surge in immigration can force down pay, particularly 
for low-income workers, a category that often includes immigrants who have 
lived in the United States longer. Last month, in the most recent economic 
report of the president, Biden's advisers acknowledged that "immigration may 
place downward pressure on the wages of some low-paid workers" but added that 
most studies show that the impact on the wages of the U.S.-born is "small."

   Even Edelberg notes that an unexpected wave of immigrants, like the recent 
one, can overwhelm state and local governments and saddle them with burdensome 
costs. A more orderly immigration system, she said, would help.

   The recent surge "is a somewhat disruptive way of increasing immigration in 
the United States," Edelberg said. "I don't think anybody would have sat down 
and said: 'Let's create optimal immigration policy,' and this is what they 
would come up with."

   Holtz-Eakin argued that an immigration cutoff of the kind Trump has vowed to 
impose, if elected, would result in "much, much slower labor force growth and a 
return to the sharp tradeoff'' between containing inflation and maintaining 
economic growth that the United States has so far managed to avoid.

   For now, millions of job vacancies are being filled by immigrants like 
Mariel Marrero. A political opponent of Venezuela's authoritarian President 
Nicols Maduro, Marrero, 32, fled her homeland in 2016 after receiving death 
threats. She lived in Panama and El Salvador before crossing the U.S. border 
and applying for asylum.

   Her case pending, she received authorization to work in the United States 
last July. Marrero, who used to work in the archives of the Venezuelan Congress 
in Caracas, found work selling telephones and then as a sales clerk at a 
convenience store owned by Venezuelan immigrants.

   At first, she lived for free at the house of an uncle. But now she earns 
enough to pay rent on a two-bedroom house she shares with three other 
Venezuelans in Doral, Florida, a Miami suburb with a large Venezuelan 
community. After rent, food, electricity and gasoline, she has enough left over 
to send $200 a month to her family in Venezuela.

   "One hundred percent -- this country gives you opportunities,'' she said.

   Marrero has her own American dream:

   "I imagine having my own company, my house, helping my family in a more 
comfortable way."

 
 
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