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.

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.

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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.”

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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.

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