Sen. J.D. Vance (R-OH) grilled Federal Reserve Chair Jerome Powell on the impact that mass immigration has on driving up housing prices while, at the same time, reducing wages for working and middle class Americans.
During a Senate Banking Committee meeting, Vance questioned Powell about the role mass immigration — where the United States admits more than a million legal immigrants annually in addition to adding potentially millions of illegal aliens every few years — plays in housing prices.
“What do you see is the relationship particularly given that housing is such big driver of the inflation over the last few years … what role do you see that illegal immigration playing in driving up housing costs, which of course is a main driver of inflation for American citizens?” Vance asked Powell.
“I’m sure there are places in the country where new people coming into the country, I’m sure you can find places and they exist, where that will have contributed to an already tight housing market,” Powell admitted though he downplayed the impact on “aggregate inflation” overall.
In particular, Vance mentioned the housing situation in Springfield, Ohio, where a massive influx of migrants from Haiti has skyrocketed rents and driven housing prices past the brink of affordability.
“Springfield has seen a surge in population through immigration that has significantly impacted our ability as a community to produce enough housing opportunities for all,” a letter from Springfield officials reads, recited by Vance:
Springfield’s Haitian population has increased to 15,000 to 20,000 over the last four years in a community of just under 60,000 previous residents, putting a significant strain on our resources and ability to provide ample housing for all of our residents. Despite 2,000 additional housing units set to come online over the next three to five years, this is still not enough. [Emphasis added]
Vance’s remarks come after former President Donald Trump told a crowd in Arizona last month that mass immigration greatly impacts housing prices for Americans.
“Housing costs are skyrocketing, absolutely skyrocketing, because we have 15 million new migrants. We have no place to put them,” Trump said. “We have no place to put them, and that number is growing so that we have absolutely no place.”
Vance is considered a top vice presidential contender for Trump.
Similarly, at the hearing with Powell, Vance noted the impact that mass immigration has on wages, particularly for working and middle class Americans.
“I wonder, when you hear your colleagues and other economists outside of the Fed talk about the influx of immigration and the fact that it admittedly has put downward pressure on wages, obviously that has put some downward pressure on inflation, but it also puts downward pressure on the wages that people earn to pay for their families,” Vance said. “Why do we see that as a good thing?”
Powell, in response, admitted that immigration plays a role in U.S. wages:
This is all happening over the last couple of years in the context of an extremely tight labor market, now a little less tight — significantly less tight … you’ve got a very tight labor market and [immigration] is addressing that. Wage increases are still very high but they’re coming down to a more sustainable level. [Emphasis added]
Vance said lawmakers ought to focus on pulling millions of prime working-age Americans off the labor market sidelines rather than importing millions more foreign workers for hire.
“If we say we have a really tight labor market and we say that there are more than one job openings per worker, there are two ways you could plausibly solve that, probably more than that, but two obvious ways you can plausibly solve that,” Vance said:
One is through a new influx of workers via the immigration system. Another way is by raising wages and bringing some of the workers that are on the sidelines. I think specifically of the 7 million prime age men that have dropped out of the labor force. Why isn’t that more the focus of policy makers rather than – you see labor shortage, rather than bringing in a large number of new immigrants, why not try to boost wages in a way that brings some of those workers off the sidelines? [Emphasis added]
Powell suggested he agreed with Vance’s assessment, saying, “That’s a very constructive focus. I agree, I don’t think it has to be one or the other.”
Last month, an analysis of labor market data revealed that since 2019, before the Chinese coronavirus pandemic shut down the U.S. economy, about 75 percent of all American job growth has gone to newly arrived migrants, both illegal aliens and legal immigrants.
Meanwhile, fewer than one million native-born Americans have joined the workforce.
John Binder is a reporter for Breitbart News. Email him at jbinder@breitbart.com. Follow him on Twitter here.
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