Fed: 3.8 million illegal immigrants could enter U.S. in 2024, affecting wage growth

(The Center Square) - A new report from a Federal Reserve branch says 2024 could see millions of border crossings.

The Federal Reserve Bank of San Francisco estimates that 3.8 million undocumented immigrants will enter the U.S. in fiscal year 2024 at January’s rates, and notes its contrast with the Congressional Budget Office’s estimate in January that 3.3 million total immigrants will enter the country in the same time frame.

However, with recent declines in crossings after President Biden signed an executive order allowing asylum applications to be rejected for individuals who illegally cross the border when daily crossings surpass 2,500 per day (or nearly one million per year), continued decreases could bring mass migration inflows below Fed and CBO estimates.

By comparing the states’ number of immigration court cases with the ratio of job vacancies to unemployed individuals, the Federal Reserve’s report estimated higher levels of illegal immigration — using CBO methods but with more recent data — and found recent immigration spikes are responsible for approximately one fifth of the decline in the ratio of job vacancies to unemployed individuals. Earlier this year, the International Monetary Fund’s managing director said the United States’ “abundant labor coming across the border” means ‘wages are not pushing up,” suggesting that high migration levels are reducing wage growth.

“The Congressional Budget Office recently raised its demographic projections for net U.S. immigration. Most of the increase in the projections came from undocumented immigrants” wrote Federal Reserve author Evgeniya A. Duzhak. “Analysis linking the revised estimates for this group to labor market statistics shows that immigrants joining the workforce are likely to have modestly eased labor market tightness.”

Duzhak’s study also found that Florida, New York, Texas and California received the highest volume of immigration cases in 2023 and 2023. In per capita terms, however, Louisiana, Massachusetts, Utah, and Colorado were the highest, suggesting these states may have had the relatively highest labor market changes from migration.