The American public expressed its preference for reduced immigration in electing President Trump to a second term.
Yet underlying demographic realities show that those current policy preferences stand at cross-purposes with the needs of the U.S. economy.
In a recent report, the Congressional Budget Office increased its estimate of population growth for this year to 350 million from 346 million.
But it revised down its estimate for 2054 to 372 million, which implies a growth rate over the next 30 years of 6.3% compared to the 10.5% that it had previously forecast.
Based on these estimates, the decision to slow or severely limit immigration accompanied by an increase in deportations will affect growth, employment, wages and inflation in ways that have not been experienced over the past 20 years.
The CBO report points to near-term risks to population growth, estimating that the increase will slow from an average of 0.4% per year over the next decade to 0.1% from 2036 to 2055.
Without immigration, the U.S. population would shrink beginning in 2033 because reproduction by the native-born population would be too low to make up for the mortality rates of the baby boom.
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In an economy that is currently characterized by higher inflation and interest rates, the projections suggest that the labor supply will see further constraints.
And if a significant increase in deportations is added to this constraint, the economy will face further inflationary pressures through lower unemployment and higher wages.
