President Donald Trump could limit his own plans to grow the U.S. economy if a bill he supports to cut legal immigration in half becomes law, economists said.
Trump Wednesday embraced legislation put forth by two senators to cut legal immigration into the U.S. in half within a decade and base entry on education, language ability and job skills that would benefit the country.
Immigrants are responsible for nearly half the population growth of the United States, and by extension that also means they are a sizable part of the growth in the U.S. labor force.
"It's half of labor force growth today. Going forward it's a bigger drag. We have yet to meet the critical mass of baby boomers retiring. That's still ahead," said Diane Swonk, chief economist at DS Economics.
Statistics provided by the U.S. Census Bureau on assumptions about population growth and immigration are rolled into economists' forecasts for GDP. Economists say there are already worker shortages in some areas, and the problem could get worse quickly.
Macroeconomic Advisers co-founder Joel Prakken says the economy should grow at about 2 percent next year, but already it could see a dent if immigration is slowed. "What's behind that projection is the assumption of labor force growth and productivity growth ... that is a combination of assumptions about the participation rate and the growth of the population. Our assumptions of the population come from the Census Bureau," he said.