The Congressional Budget Office has tacitly admitted that the influx of illegal immigration into the United States is likely to have negative long-term impacts on wages and the standard of living for American citizens and immigrants living in the United States legally. According to the government agency, the U.S. labor force is projected to increase by 1.7 million in 2024 and see a 3 percent total increase by 2033, equating to over 5 million additional workers. The increase is in large part because of increased illegal and legal immigration.
While there are some marginal benefits to the expanded labor force — the CBO says the federal deficit will shrink to 6.4 percent of GDP by 2033, down from 7.3 percent in 2023 due to the increased tax base — the unchecked flow of illegal immigrants into the country also comes with concerning negative externalities. The illegal immigrants currently entering the U.S. tend to be low-skill to no-skill workers and may hurt gross domestic product. The CBO projects that per-capital GDP will have declined by nearly 1 percent a decade from now, mainly due to an increase in low-skill immigrant labor.
In addition to a decline in per-capita GDP, the influx of cheap and low-skilled workers is projected to continue to depress U.S. wages and drive up housing costs. Rising rents and home values due to increased demand — combined with lower wages — will likely result in Americans experiencing a lower standard of living a decade from now than they do today. While the increasing number of illegal and legal immigrants in the U.S. does expand the tax base, the increased consumption may also put upward pressure on the prices of daily goods — wiping out the deflationary effects of the increased labor force.
