New Fed report proves Milton Friedman and Joe Biden understood something vital about immigration—and explains why growth may sputter under Trump

The Trump Administration’s mission to severely curb unauthorized immigration was both highly successful and politically popular. Yet a new research paper from the Federal Reserve Bank of San Francisco found that the huge influx of foreigners under President Biden’s open border policy had the beneficial role of increasing the labor force, especially in fields where the U.S. sorely needed workers, notably in manufacturing and construction. The study further concludes that current crackdown has reduced employment in those and other industries where employers face shortages. Potential result: A slowdown in the pace of the residential construction at a time when the U.S. faces a major housing shortage, and faster-rising home prices as builders pay higher wages to tap a smaller pool of everything from carpenters to framers to electricians. The Data centers essential to the growth of AI could face delays as well.

The article, “Unauthorized Immigration Effects on Local Labor Markets,” appeared as an “economic letter” on the San Francisco Fed’s website, written by Daniel Wilson, a VP in the economic research department. It’s the summary of a longer study conducted by Wilson and Xiaoquing Zhao of the Dallas Fed. Wilson and Zhao collected data on the arrivals and departures of unauthorized, working age immigrants to derive the “net immigration” numbers for all 3100 U.S. counties. Their analysis focuses on two main periods: the Biden era of extremely high entries from March 2021 to March 2024, and the span of the Trump crackdown period lasting from March of 2024 to March of last year. They gathered the numbers from the immigration court records that they contend cover the vast majority of all unauthorized immigration.

The authors note that unauthorized immigrants are not illegals. They’re typically encountered at ports of entry by federal agents, and receive notices to appear in immigration court, usually in one to three years. So once........

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