Immigrants are driving a surprisingly strong US economy, and it hasn’t come at the expense of American workers, Nobel laureate Paul Krugman says

• Immigrants are helping to prop up a strong US economy, Nobel economist Paul Krugman wrote in a New York Times op-ed.
• He argues that their positive labor-market impact hasn’t come at the expense of American workers.

Immigrants are the secret force driving a surprisingly strong US economy, Nobel laureate Paul Krugman wrote in a recent New York Times op-ed.

The premise of his argument is a comparison of the current US economy with Congressional Budget Office forecasts made before the pandemic. He finds that both real GDP and employment have exceeded those projections.

Krugman notes that the CBO itself has attributed economic growth upside to immigration, particularly as it pertains to the labor market. And while more nativist segments of the population might argue this immigrant-driven expansion is coming at the expense of American-born workers, Krugman disagrees.

He cites the chart below, which shows that native-born unemployment hasn’t increased amid the recent spike in immigration.

“Are immigrants taking jobs away from native-born Americans? No,” Krugman wrote.

Krugman also poses another question about whether the immigration surge has put downward pressure on wages by increasing the sheer supply of labor. But he also debunks that notion.

“Many (although not all) academic studies find that immigration has little effect on the wages of native-born workers, even when those workers have similar education levels,” he said.

Krugman argues that’s because immigrants are complements, not substitutes, for the existing American labor force. They bring their own set of skills and knowledge, and they even compete for different kinds of jobs than US workers, he says.

He also pointed to data that shows that, even with the influx of foreign-born workers — who he says are probably less educated, especially the undocumented portion — the low-wage end of the American workforce have actually seen changes in their real wages increase.”

“Immigration appears to have been a big plus for US economic growth, among other things expanding our productive capacity in a way that reduced the inflationary impact of Biden’s spending programs,” Krugman wrote.