The U.S. can continue to grow the national economy via greater productivity among American workers, even when migration is cut back, Federal Reserve Chairman Jerome Powell told a House hearing on Tuesday.
“There are two things that affect growth,” Powell told Rep. Maria Salazar (R-Fl) during a three-hour hearing at the House Financial Services Committee:
One is growth in the labor force [to get] more people working, and the other thing is productivity [growth to expand] how much they produce per hour worked …
You can [fore]see a big increase in productivity, which would mean we don’t need as many workers.
Powell’s migration comments echo other calls for the federal government to abandon the post-1990 economic strategy of growth-by-migration and to instead revive the pre-1990 strategy of growth by productivity, technology, and innovation. President Donald Trump’s migration policies are zig-zagging the nation towards that pre-1990 higher-wage prosperity.
In the hearing, Salazar repeatedly pushed Powell to endorse more migration because she is pushing her business-backed bill to welcome more migrants and white-collar visa workers.
Her bill would revive the pre-Trump federal policy of inflating the U.S. consumer economy with cheap workers, government-funded consumers, and apartment-sharing renters extracted from developing countries.
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Since 1990, policy has been fantastically successful for investors in real estate, the consumer economy, and the stock market. But it has been disastrous for innovation and technology, and also for most American employees, families, and communities. That vast pocketbook and civic damage caused Trump’s election in 2016 and 2024.
“You do agree that if we don’t have those [imported] hands, then we don’t grow,” Salazar insisted to Powell. “Americans are not having enough kids, so that means that we need [to import] other people, right?” she added, echoing pro-migration demands by Sen. Chuck Schumer (D-NY).
But the alternative to migration is that employers can grow their employees’ productivity via investments in technology, Powell responded. “A big increase in productivity … would mean we don’t need as many [migrant] workers,” he said.
But growth by productivity takes time and effort, Powell warned:
With productivity-enhancing things, they typically take longer to be implemented, and then it takes a while for the gains to be shown. I think in the case of artificial intelligence, those gains are coming, but they may take longer or be less in the beginning than expected.
Powell declined to suggest a balance between productivity and imported labor, saying: “Those who make immigration policy are entitled to weigh these factors. We report on what happens, but it’s really not our job.”
Powell suggested to Salazar that she consult the Congressional Budget Office for assessments about the competing alternatives of productivity and migration.
Salazar tried again to get Powell to endorse more migration: “Do you think that … the United States economy can continue being the number one economy in the world and that we could compete if we were to have the immigration laws that we have right now?
“You could have the highest per capita earnings,” with reduced migration, Powell said, adding, “but if you’re talking about the aggregate output, then population growth may be a constraint.”
Many companies and government employees favor “aggregate growth” because it grows the number of poor migrants who flood into the nation’s groceries, low-tech workplaces, banks, used-car lots, rental offices, and government agencies. That strategy is so far advanced in Canada, Australia, and the United Kingdom that citizens’ “per capita” incomes shrink amid growing economies.
China, in contrast, has adopted a far more successful policy of high-tech development and higher per-capita incomes without migration.
Trump is zig-zagging the nation back towards the high-tech economic prosperity it had before 1990, when Congress doubled the inflow of migrants and allowed investors to export much of the nation’s industrial infrastructure to China.
But many other people in Washington share Salazar’s failure to understand the importance of productivity and the damage done to it by migration. On June 20, for example, the Washington Post published an article that claims migration is helping to grow Spain’s economy. But the article failed to note that the mass migration has cut wages and reduced productivity.
The increased migrant population has also spiked rents and made it more difficult for demoralized young Spaniards to birth the next generation of Spaniards, EuroWeekly reported in August 2024:
In Spain, younger workers earn modest salaries, around €18,000 a year, in often temporary jobs, not even enough to pay rent increased by gentrification, inflation and holiday rentals. University graduates typically live with their parents, when embarking on careers, which can postpone many plans, including marriage and babies.
Meanwhile, back in the United States, Trump partially abandoned the post-1900 Extraction Migration policy when he shut down the long-tolerated inflow of illegal migrants through the Southern border. But, so far, he has not trimmed the massive annual inflow of roughly 1 million legal immigrants, 500,000 white-collar visa workers, and 500,000 white-collar laborers.
But the gains have been rapid. Blue-collar wages are rising because Americans regained the power to boycott terrible jobs after Trump blocked illegal migration. For example, the Wall Street Journal noted that Americans are taking many jobs in a high-tech Nebraska slaughterhouse that raised wages and improved conditions once Trump cut off the supply of desperate migrants:
NORTH PLATTE, Neb. — Angela Jones feels fortunate to have landed a job at the new meatpacking plant in this stagnant prairie town she’s long called home. She earns $24.50 an hour — far more than she made as a convenience-store clerk, custodian or construction flagger — and has health insurance for the first time in over 20 years.
“This isn’t the same old meatpacking plant!” says the plant’s hiring ads, the journal noted.
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