The Trump and COVID eras tanked immigration to the US. Reversing that could help ease a recession risk, sky-high inflation, and a labor crisis.

Immigration restrictions put in place by Trump, as well as the pandemic, have led to a labor shortage that's making inflation worse.

• More than a third of Americans want less immigration, but more could actually help cool inflation.
• Job openings sit at historic highs, and the lack of workers to fill them has helped push prices higher.
• Letting more people move to and work in the US could close that gap and ease inflation without a severe recession. 

More than a third of American adults think the government should slash the number of immigrants it's letting in. They could be ignoring one of the best shots at solving the cost-of-living crisis.

While many Americans view immigration as a threat to the country's financial well-being, data continually suggests that the opposite is true. Immigrants typically have jobs that complement existing American workers, or make it easier for them to do their jobs, one PBS analysis found. That's in addition to the billions of dollars in tax revenue immigrants, both documented and undocumented, contribute to the country each year.  

Americans also view inflation as the country's top problem by a wide margin, according to a Pew Research Center poll from May, as they hurtle toward a near-definite recession in 2023. 

These views are at odds because more immigrants in the US could help the country's inflation woes.  

The math is simple. There remain some 10.1 million job openings but only about 5.8 million workers available to fill them. That's contributed to historically strong wage growth through the past two years as businesses scramble to attract potential employees. Those pay gains have left Americans with more cash to spend and businesses with the ability to raise prices faster than usual.

As Federal Reserve Chair Jerome Powell put it in March, the labor market is "tight to an unhealthy level." For inflation to return to healthy levels, there likely needs to be some "softening of labor market conditions" in the form of a higher unemployment rate and weaker economic growth, he said in September. 

Economists largely expect that "softening" to come from a destruction of labor demand and huge layoffs. Increased immigration offers an alternative. Instead of slashing worker demand to bring it in line with supply, the government can lift supply by allowing more workers into the country. Doing so would help close the gap between job openings and available workers without a heightened risk of rising unemployment.

Immigration to the US plummeted dramatically in recent years. The pandemic powered most of the drop, with immigration sinking significantly in 2020 and further the following year. Policies enacted by President Donald Trump also cut down on the number of migrants legally entering the US. Total immigration last year was the lowest in a decade and less than a quarter of where it stood just six years prior.

Suzanne Clerk, CEO of the US Chamber of Commerce, said in January that allowing more immigrants into the US would help mitigate both soaring inflation and the labor shortage. 

"We need more workers," she told reporters at the time. "We should welcome people who want to come here, go to school, and stay… That is a place the government could be particularly helpful and we do believe it would be anti-inflationary." 

With the 2023 outlook worsening by the week, immigration offers a fighting chance at avoiding recession

Easing the path to immigration could be a saving grace for the US' financial straits — this time last year, the US would have had about 2 million more workers if immigration had stayed on its trend from the first half of the 2010s before reversing itself during Trump's presidential term, Insider estimated, for instance. 

To be sure, immigration is no panacea. Specific sectors like farming, construction, and maintenance are far more likely to hire immigrants than others, leaving some corners of the economy unaided by such an infusion of new workers.

Documented immigration also benefits different pockets of the economy compared to undocumented immigration. Those who enter the US with the legal ability to work are historically more likely to land in higher-paying sectors, whereas undocumented immigrants typically land jobs in lower-paying service industries. Increasing immigration could place greater downward pressure on wage growth for high-income jobs and only have a limited effect on pay gains in lower-earning sectors.

The 10 million job openings that existed at the end of August could also be somewhat skewed. Openings reflect "recruiting intensity" more than they do literal openings, Julia Pollak, chief economist at ZipRecruiter, told Insider. As openings are filled, the nationwide sum could quickly drop as hiring urgency cools.

A great deal of Americans would likely balk at letting more migrants into the country. Thirty-eight percent of surveyed adults told Gallup in July they'd prefer to see immigration decrease, while just 27% said they'd prefer to see it boosted.

Most of those against ramping up immigration side with the Republican Party. A strong majority of conservatives want to increase deportations of immigrants without legal status and spend more on US-Mexico border security, according to an August poll conducted by the Pew Research Center. Democrats, meanwhile, prefer creating a pathway for more immigrants to stay legally and making it easier to sponsor family members who immigrate to the US.

Still, few other options stand to quickly lift worker supply as effectively as immigration, and sticking to the status quo probably won't look pretty for the economy. Fed officials see the unemployment rate climbing to 4.4% from 3.5% next year and staying there through 2024. Separately, economists surveyed by The Wall Street Journal expect the country to slide into a recession sometime in the next 12 months, complete with widespread job loss, weak growth, and skyrocketing interest rates.

Higher rates worked for the Fed in the '80s, but they're more suited to crushing labor demand than boosting worker supply. Congress could lend a hand with fresh fiscal policy, but lawmakers are unlikely to do much as midterm elections loom large.

Increased immigration, then, provides a rare chance to rebalance the labor market and drag inflation lower without driving millions of Americans out of work.