Why Immigration Can’t Revive the Economy

Boosting immigration would seem a no-brainer to address the West’s ongoing demographic implosion and revive its stagnating economies. Even Japan now recruits foreign temporary workers for its rapidly aging economy. Yet mass migration has aroused fierce opposition, not only in the United States but in Great Britain, Netherlands, and France. Moves to reduce migration are already in place in Italy, and seem imminent in Germany, whose welfare state is creaking under the burden.

This runs against conventional economic theory. Both libertarian conservatives and progressives see unregulated migration—upwards of 10 million during Joe Biden’s presidency—as a net plus. Many businesses see it as a source of cheap labor and demographic vitality. But if migrants have boosted population number, they have done little to revive stagnating economies in Europe and Canada.

“Mass immigration doesn’t seem to go along naturally with economic growth.”

Opposition to migration is often blamed on racism and xenophobia, and depicted as a drag on economic progress. Yet if you actually look at what is occurring on the ground level, mass immigration doesn’t seem to go along naturally with economic growth.

This is particularly evident in Britain and France, both of which have experienced massive increases in migration but have largely stagnant economies. Canada once based its migration policy on luring newcomers who could boost the country’s economy. But under Justin Trudeau the mantra was simply the more the merrier. In 2023 the country of 40 million received a million immigrants, accounting for 97.7 percent of Canada’s population growth. But despite the influx, over the past decade Canada has suffered the slowest economic growth rates among advanced countries while its once high standard of living continues to decline.

This failure is less obvious in the more dynamic United States. But here too many newcomers, particularly the undocumented, are low-skilled and now must compete in poorly paid manual labor or service jobs with other recent immigrants or the indigenous poor. Jobs requiring extensive manual labor have dropped to 22 percent of all jobs in 2025, from 35 percent 50 years ago. As we add more workers to the low-wage pool, their presence does tend to retard wage growth, as noted by a recent Congressional study, and could discourage natives from work.

But much of the pain is borne by the immigrants themselves. In the past, immigration came with the promise of upward mobility. Today we offer immigrants jobs that pay poorly, and make up the difference with social assistance, creating what Michael Lind calls a “low-wage/high-welfare model.” Under such a system, there’s not much incentive for employers to upgrade their operation or grant better working conditions and wages.

Read the rest of this piece at: Compact Magazine.

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Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo credit: Naturalization Ceremony, U.S. Dept of Homeland Security via Flickr in Public Domain as a Government work.