By Bob Bryan
February 14, 2017
Federal Reserve Chair Janet Yellen laid out the negative impact of restricting immigration during her testimony to the Senate Committee on Banking, Housing, and Urban Affairs.
Democratic Sen. Catherine Cortez Mastro asked Yellen about the economic impact of restricting immigration and President Donald Trump's policies regarding the deportation of immigrants from the US.
Cortez Mastro, citing a recent executive order that Trump said is designed to combat criminal organizations that focus in part on undocumented immigrants, noted there was also a wave of deportations by the Immigration and Customs Enforcement (ICE) agency. The Senator asked in Yellen's opinion what a crackdown on immigration would mean for the economy.
While Yellen said she would not "comment in detail on immigration policy" she did lay out what the impact of restraining immigration would be on the economy. From Yellen's testimony (emphasis ours):
"Labor force growth has been slowing in the United States. It's one of several reasons along with slow productivity growth for the fact that our economy has been growing at a slow pace. Immigration has been an important source of labor force growth. So slowing the pace of immigration probably would slow the growth rate of the economy."
Trump ran on the platform, in part, that undocumented immigrants are a drag on economic growth and take away jobs from Americans.
However, there have been a number of studies showing that immigration of any type is an overall positive for the labor market and Wall Street economists have cited possible immigration crackdowns as a drag on future economic growth as it would restrict an already shrinking supply of labor, especially for low wage jobs.
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