Biden Border Crackdown Could Snip Economy

President Joe Biden’s latest attempt to address one of his biggest political liabilities — immigration — could fuel another of his weak spots among voters by sapping strength from the U.S. economy.

The country’s post-Covid-19 rebound stands out from those of other countries, a phenomenon economists say is partly due to immigration, both through legal and unauthorized channels. But the executive action Biden issued Tuesday could stem the number of asylum seekers and other migrants who make their way into the U.S. and provide a vital, often cheap, labor source for employers.

“If the executive order is successful in greatly reducing border crossings, then it would have a meaningful impact on the economy,” said Chloe East, a University of Colorado Denver economist who studies immigration — though she added that what former President Donald Trump has in mind for immigration would carry far bigger implications.

The trade-off demonstrates the difficulty Biden has had in tackling an urgent political and policy issue in the face of a Republican-controlled House determined not to hand him an election-year win as they pummel him over the border. At the same time the state of the American economy is the overriding concern of voters, according to public opinion surveys, and Biden isn’t getting much credit for its overall strength.

One thing working in Biden’s favor: Any economic slowing from his immigration move may scarcely be noticeable until after the Nov. 5 election.

Nationwide, nearly half of the job growth outside of the farming sector since October can be attributed to various immigrant groups, according to a recent analysis by the financial firm Standard Chartered.

The nonpartisan Congressional Budget Office said earlier this year that a surge in immigration that started in 2022 boosted the labor force and propelled economic output. The agency projected the stream of new workers could drive a $7 trillion boost in GDP over the next ten years compared to what it would be without them.

But it wasn’t all good news. CBO estimated that immigration would contribute to inflation, another pressing problem for Biden in this election year. Wages would also rise more slowly over the next 10 years due to the influx of low-skilled workers, according to the agency.

Potential economic undertows from Biden’s immigration move will likely be spread unevenly and concentrated in industries like restaurants, construction and the service sector that historically have relied on the work of immigrants, East said.

Beyond that, any dwindling of new workers would be more acutely felt in big cities or communities along the U.S.-Mexico border where migrants have gathered in greater numbers.

The confluence of those forces could prove pivotal for Biden in places like Arizona, a critical battleground both in the upcoming presidential election and for Democrats’ hopes of maintaining control of the Senate.

The new policy — which would allow federal officials to suspend asylum claims between designated ports of entry if crossings exceed an average of 2,500 per day over a week — is aimed at deterring large numbers of people from trying to enter the United States and give the government additional tools to more swiftly remove certain migrants from the country.

The move has rankled immigration advocates, as well as Biden’s union allies and some Democratic members of Congress, while doing nothing to quell Republican’s furor over Biden’s handling of the border overall.

“Rather than give in to the political hysteria created by MAGA extremists, including Republicans in Congress who refused to support bipartisan solutions, we should increase resources at the border to process their cases more efficiently and humanely,” Rocio Sáenz, secretary-treasurer of the Service Employees International Union, which has endorsed Biden’s reelection campaign, said in a statement. “Far from bringing harm, the surge in immigration in recent years has played a major role, along with Biden’s policies, in our economic recovery from the pandemic, which leads the world.”

The executive action will also have to pass muster with the courts — the ACLU quickly vowed to sue the Biden administration over the move and others are considering similar challenges, further clouding the outlook for prospective workers and employers.

However, it may take a while for the effects of the change to be reflected in economic data. Given that it can take months for asylum seekers to receive work permits, the near-term economic impact of the Biden's action would likely be blunted, according to Wendy Edelberg, director of the Hamilton Project and a senior fellow in economic studies at the Brookings Institution.

“The important thing to keep in mind is that the effects of the surge of immigration on the economy has come with a little bit of a lag, so whatever happens in the next month or four months isn’t going to have an immediate impact on any of the important economic data that we see over that time period,” Edelberg said. “Regardless of what happens in the next few months, we’re going to continue to see increases in the supply of workers and in employment flows because of what happened to immigration in the last couple years.”

Still, Edelberg and other experts said it remains to be seen the extent to which Biden’s crackdown on asylum-seekers will affect the workforce, given that immigrants can still arrive in the U.S. by other means.

For instance, the executive action leaves in place humanitarian parole pathways the Biden administration has set up for migrants from certain countries like Nicaragua, Venezuela and Ukraine.

Meanwhile, undocumented immigrants have become a smaller proportion of the agriculture workforce as employers have increasingly turned to the H-2A temporary visa program, which unlike some other types of visas does not feature annual caps.

“Most of the new farmworkers who are coming in are coming through the H-2A visa program,” Daniel Costa, director of immigration law and policy research at Economic Policy Institute said in an email.

And regardless of the potential impact of Biden’s action, economists say that some of the restrictive measures put forward by former President Donald Trump should he return to the White House would have an order of magnitude larger effect on the workforce and economy overall.

Trump has vowed to unleash the “largest deportation effort in the history of our country,” affecting upwards of 15 million people, the former president told Time Magazine earlier this year.

“Beyond how practical that is, if you took that seriously that would be massive relative to the change we would see due to the new executive order,” East said.

Trump has also eyed restoring, and potentially expanding, a number of aggressive immigration-related policies he enacted during his four years in office, many of which Biden subsequently dismantled.

Katy O'Donnell and Grace Yarrow contributed to this report.