Immigration: A Double-Edged Sword for Labor Markets

The surge in immigration has notably increased labor supply, easing wage and price pressures and delaying aggressive interest rate hikes by the Federal Reserve, which may prevent a recession. Conversely, reversing immigration flows could tighten the job market and intensify wage and price pressures, particularly in industries reliant on immigrant labor. While there is emerging consensus that immigration impacts wages at the lower end, perceptions around wage increases vary significantly. Those benefiting from stock market ownership may view wage increases positively, but many average workers continue to struggle with inflation and have not fully recouped their losses. The discussions around tariffs indicate a quick shift in political sentiment, reflecting broader economic concerns.