CBO: Biden’s Migration Cuts Wages and Productivity

The migrant wave welcomed by President Joe Biden’s border chief is imposing huge and unfair economic burdens on the working Americans whose taxes are being used to feed, house, and care for the migrants, according to Sen. Chuck Grassley (R-IA).

Those huge taxes are quickly transformed into income for Wall Street investors and government employees as the poor migrants accept government aid while working, renting apartments, and buying food, clothes, and autos.

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Worse, Biden’s migration drags down Americans’ productivity and wages, further pushing the United States towards a low-wage, low-tech economy. In contrast, China is pushing ahead of the United States with a rival economic policy of growth that uses automation and trained graduates to expand the productivity of Chinese companies.

Grassley’s warning is based on a July report by the non-partisan Congressional Budget Office (CBO), titled “Effects of the Immigration Surge on the Federal Budget and the Economy“:

According to CBO, the estimated effect of the immigration surge over the next 10 years will add $177 billion in federal mandatory spending, which includes programs such as Medicaid, SNAP (originally called the Food Stamp Program) and Social Security, plus another $101 billion primarily because of higher interest rates on the debt.

The Biden surge will have added 8.7 million migrants from 2021 to 2026, the report says. That total ignores the additional inflow of legal immigrants and temporary workers.

The taxpayers’ cost of Biden’s migration will spike as more migrants get access to additional budget-funded programs that supposedly exclude illegal migrants, Grassley noted:

CBO estimates that about 60 percent of the 8.7 million people who are part of this immigration surge will be eligible for some or all federal benefits by 2034, including Social Security, tax credits to subsidize health insurance, Medicaid and nutrition assistance …  All told, CBO estimates the budgetary pressure on [federal] discretionary programs would be roughly $200 billion from 2024-2034.

State and local taxpayers will also spend billions of extra spending to house, educate, feed, and police the migrants, Grassley noted. “The effects of the surge in immigration also place steep budgetary pressure on state and local governments who see spending on education, health care, and housing outpace incoming revenue,” he said.

The CBO report admits:

States and localities face additional budgetary costs from immigration that will probably vary among jurisdictions. For example, New York City spent $4.3 billion from July 2022 to March 2024 to accommodate immigrants and comply with existing local and state housing policies. In addition, 25 states have policies offering in-state college tuition to unauthorized immigrant students. Depending on how prepared they are to receive large numbers of new immigrants, state and local governments may face even greater budgetary pressure as a result of the immigration surge.

The migrant-inflated economy will annually generate roughly $30 billion in taxes for the government than it costs to welcome the migrants — assuming Biden’s migration wave stops around 2026, the report claims.

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However, the tax gains for the government and businesses impose multiple burdens on blue-collar and white-collar Americans.

Government spending on federal debt will rise because interest rates will be pushed upwards, the report says: “The increases in interest rates are a major contributor to the boost in federal spending.”

The higher interest rates and the extra immigrants will also raise inflation — especially in housing costs.

Also, average wages fall because the migrants push down wages for Americans who do not go to college, the CBO notes: “Through 2026, the average wage growth of people in the United States who are not part of the surge is slightly less than it would have been without the surge because the surge slows the growth of wages of people with 12 or fewer years of education.”

Most media coverage of the report has focused on the numbers favored by pro-migration lobbyists: The projected nominal GDP over the entire 2024–2034 period is $8.9 trillion greater because of the surge in immigration, and the migration wave will have grown the overall economy by just 2.9 cents on the dollar by 2034.

But the media coverage misses or ignores the reality that most of the growth comes from a bigger consumer economy, not from a more productive, high-tech, high-wage economy.

The economy grows because of more consumption by migrants — more housing for more migrants, plus more “personal consumption” of gasoline, TV shows, clothes, and food, such as hot dogs and hamburgers. Moreover, much of that growth will be gained by China, whose automated factories will produce much of the TVs, clothes, furniture, and household goods bought by the taxpayer-supported migrants.

Just one-tenth of the 2.9 percent in economic gain is business-related investment, including “purchases of equipment, structures, and intellectual property products, such as software.”

Worse, the migrant workers are less educated than Americans, so their arrival drags down the per-capita productivity of Americans, the CBO report admits. Less productivity means more poverty, more taxes, and more government anti-poverty programs.

This government-imposed loss of productivity will be offset, the report promises, by the 1-in-33 migrants who have specialized education in “STEM.”

But that 1-in-33 claim ignores the reality that employers use cheaper migrants to displace many well-paid American STEM graduates now doing the high-tech work that raises productivity.

Many American STEM professionals have already been pushed into early retirement and into non-technical work by employers’ preference for cheap and compliant visa workers imported from India, China, Russia, and South America.

Moreover, the report states — without evidence — that unskilled migration will drop to pre-Biden levels by 2028, thus avoiding further productivity losses.

The reality that migration displaces productivity is being spotlighted by Larry Fink, the CEO of Wall Street’s $10 trillion BlackRock investment firm, who has spoken out against the U.S. government’s “Extraction Migration” strategy which imports migrants to inflate the nation’s consumer economy.

“I can argue, in the developed countries, the big winners are the countries that have shrinking populations,” BlackRock founder Larry Fink said at a pro-globalist event in April, hosted by the World Economic Forum in Saudi Arabia. He continued:

That’s something that most people never talked about. We always used to think [a] shrinking population is a cause for negative [economic] growth. But in my conversations with the leadership of these large, developed countries [such as China, and Japan] that have xenophobic anti-immigration policies, they don’t allow anybody to come in — [so they have] shrinking demographics — these countries will rapidly develop robotics and AI and technology …

If a promise of all that transforms productivity, which most of us think it will [emphasis added] — we’ll be able to elevate the standard living in countries, the standard of living for individuals, even with shrinking populations.

In contrast, countries with expanding populations need to focus on basic issues of education and the “rule of law,” said Fink, who oversees $10 trillion worth of investments worldwide:

So for those countries that have rising populations, the answer will be education … [and] for those countries that do not have a foundation of rule of law, or education, that’s where the [economic] divide is going to get more and more extreme.

Unsurprisingly, Biden’s migration is extremely unpopular. Fifty-five percent of Americans want migration reductions, while just 16 percent want more migration, according to a Gallup poll conducted in June.