The labor market is at a critical inflection point, according to Moody’s Chief Economist Mark Zandi. As Trump continues to push his travel ban, Zandi said immigration is a key factor in keeping the labor market healthy and our economy growing.
“More immigration is the single best way to consistently lift economic growth and standards of living,” Zandi said at an ADP Research Institute panel at the Nasdaq, moderated by Yahoo Finance.
With baby boomers retiring and millennials already in the labor force, Zandi explained that the labor force is going to shrink going forward, making immigration necessary to fuel growth.
“The biggest problem businesses are going to face going forward is going to be, ‘Where do I find those workers?'” Zandi said. “And if we don’t rethink our policies around immigration .. .our businesses are going to struggle to grow because they aren’t going to be able to find the skilled and educated workers they need to drive their businesses going forward.”
In addition to providing more workers, immigrants have proven to be twice as likely to become entrepreneurs as native-born US citizens, creating even more job opportunities, as Zandi pointed out.
Economist Alan Krueger added that the Congressional Budget Office report on the bi-partisan immigration reform bill showed that immigration reform would raise GDP growth, reduce the budget deficit, raise incomes, and raise productivity.
While political rhetoric since the 2016 campaign has centered on immigrants taking the jobs of US workers, it turns out that more immigration may be the single most important driver for the job market going forward.
Nicole Sinclair is markets correspondent for Yahoo Finance
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