Federal Reserve Chair Janet Yellen on Tuesday said she thought restricting immigration would have a negative impact on the US economy.
During Yellen’s testimony to the Senate banking committee, Democratic Sen. Catherine Cortez Masto of Nevada asked Yellen about the potential economic impact of restricting immigration and of President Donald Trump’s policies regarding the deportation of immigrants from the US.
Cortez Masto, citing a recent executive order focusing in part on illegal immigration that Trump has said is designed to combat criminal organisations, noted that there had been a recent series of deportations by the Immigration and Customs Enforcement agency. The senator asked Yellen what she thought a crackdown on immigration would mean for the economy.
While Yellen said she would not “comment in detail on immigration policy,” she did lay out the impact she thought restraining immigration would have on the US economy. From Yellen’s testimony (emphasis ours):
“Labour force growth has been slowing in the United States. It’s one of several reasons along with slow productivity growth for the fact that our economy has been growing at a slow pace. Immigration has been an important source of labour force growth. So slowing the pace of immigration probably would slow the growth rate of the economy.”
Trump ran on the platform, in part, that immigrants who live in the US illegally are a drag on economic growth and take jobs from Americans.
Numerous studies have shown, however, that immigration of any type is an overall positive for the labour market, and Wall Street economists have cited possible immigration crackdowns as a drag on future economic growth, as it would restrict an already shrinking supply of labour, especially for low-wage jobs.