Economic Boost from Unexpected Quarters
The Congressional Budget Office (CBO) has released a report shedding light on the recent "immigration surge" of people entering the US without lawful-immigrant or temporary-worker status. This influx, which includes those who entered illegally, overstayed visas, and various other categories, has skyrocketed from about 200,000 annually to approximately 1.7 million per year since 2020. By 2026, the CBO projects a total increase of 8.7 million compared to pre-2020 trends.
The PERM Takeaway:While PERM focuses on lawful employment-based immigration, understanding broader immigration trends is crucial. The significant increase in various immigrant categories could impact labor market dynamics and potentially influence PERM wage determinations.
Fiscal Implications: A Surprising Silver Lining
Despite concerns about the costs associated with irregular immigration, the CBO's projections paint a more nuanced picture. The post-2020 surge is expected to add $1.2 trillion to federal revenue over the next decade, roughly equivalent to raising all personal income tax rates by 1 percentage point. This revenue boost stems from immigrants joining the workforce, paying taxes, and contributing to overall economic growth. The report also projects a $9 trillion increase in GDP due to population growth, higher labor-force participation, and increased productivity among new arrivals.
The PERM Takeaway:The positive fiscal impact of even unplanned immigration underscores the potential economic benefits of well-managed, skills-based immigration programs like PERM. Employers should consider how these broader economic trends might support their cases for hiring foreign workers.
Balancing Act: Costs vs. Benefits
While the federal government stands to see a net positive fiscal impact, with projected spending increases of $300 billion offset by the $1.2 trillion in additional revenue, the picture for states and cities is less clear. Local governments may face higher costs, particularly in education, as they absorb new arrivals. However, the overall economic impact appears to be neutral to positive, even for this unplanned influx.
The PERM Takeaway:As debates around immigration policy continue, PERM practitioners should emphasize the economic contributions of skilled foreign workers. The CBO's findings suggest that even unplanned immigration can yield economic benefits, strengthening the case for well-managed, employment-based immigration programs.
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