US CBO Report
"$1 Trillion Increase in Tax Revenue Over 10 Years"
As illegal immigration has emerged as a major issue in the U.S. presidential election, an analysis has revealed that immigration will generate more than $7 trillion (approximately 9,330 trillion won) in economic value over the next decade. However, recently, immigrants primarily from poorer regions, rather than high-wage skilled workers, have been entering the country, which is expected to limit the average wage growth of American workers.
On the 15th (local time), The Wall Street Journal (WSJ) and major foreign media outlets cited a report from the Congressional Budget Office (CBO), projecting that the increase in immigrant inflow will raise the U.S. labor force by 1.7 million more than initially expected in 2024, and by 5.2 million in 2033. They forecast that the annual Gross Domestic Product (GDP) could grow an additional 2.1%.
The CBO analyzed that the expansion of the workforce due to immigration will lead to increased economic activity and higher tax revenues. With increased tax revenue, the federal government's budget deficit as a percentage of GDP is expected to decrease from 7.3% last year to 6.4% in 2033.
Philip Swagel, Director of the CBO, explained, "More workers mean more productivity," adding, "This leads to increased tax revenues."
In particular, among the $7 trillion in added value generated by immigration over the next decade, $1 trillion (approximately 1,330 trillion won) is expected to be collected as federal government tax revenue. However, as the inflow of immigrants from poorer regions increases, the proportion of low-wage workers within the total labor force is expected to grow. This could limit the rise in average worker income. The CBO revised its forecast downward from $105,250 (approximately 140 million won) for average worker income in 2033, projected in February last year, to $104,110 (approximately 139 million won) in February this year.
As debates over immigration issues intensify in the U.S., efforts to analyze its economic impact are also becoming more active.
Earlier, Tom Barkin, President of the Richmond Federal Reserve Bank, also recently evaluated that increased immigration has helped ease overheating pressures in the labor market. Don Leismiller, an analyst at Stregas, analyzed that immigration has produced a positive supply effect on U.S. economic growth. He noted that some states relocating immigrants from southern U.S. cities to metropolitan areas have unintentionally matched able workers with regions.
Meanwhile, according to the U.S. Department of Homeland Security, more than 2.5 million immigrants crossed the southwestern border in 2023. The net inflow of immigrants has nearly quadrupled from an average of 919,000 annually in the 2010s to 3.3 million last year.
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