Marketplace - Immigration and job growth are linked, Fed says

Episode Date: February 18, 2026

Areas that recently experienced the largest slowdowns in unauthorized immigration also saw the largest slowdowns in employment growth, according to data analysis by the San Francisco Fed. This disproves the accusation that immigrants take jobs from American citizens. In this episode, how tighter immigration restrictions could affect the U.S. labor market long-term. Plus: It’s too early to tell how AI affects workplace productivity, California gas prices reflect more than high taxes, and the upcoming PCE index will tell Fed economists where we're at with inflation.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

Well, let's see. We got inflation. We got the labor market. We got artificial intelligence, too. Not all, though, in the same story. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Wednesday. Today, this one is the 18th of February. It is always to have you along, everybody. All right, go ahead and try this one in your U.S. monetary policy magic eight ball that you have stashed. in your desk, not only a prolonged hold in interest rates this year, but maybe an interest rate increase? One parses the minutes of Federal Reserve meetings, the latest version of which for the meeting of 27, 28 January came out today. One parses those minutes to finally at one's peril, but it is tough to misread this sentence. And here I quote, upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above target levels.

Upward adjustments, of course, interest rate increases. And I will just point out here that inflation, while lower, is still half a percentage point above where the central bank wants it to be. Thus endeth the interest rate portion of this program. For the umpteenth time, I will note here, moving on, that for whatever else immigration policy is being used for right now, the number of people coming into this economy is at root a labor market story. And as we have been reporting, it's been a bit tricky of late to get a firm grip on what is going on with jobs. But there's a new research note out from the Federal Reserve Bank of San Francisco that makes at least one thing clear. A direct relationship between the number of unauthorized immigrants to this economy and job growth.

Marketplace's Novosafo explains. The San Francisco Fed looked at the Biden-era spike in unauthorized immigration starting in 2021, and a slowdown period from March 24 to March 2025. And it found that the labor market moved in tandem with immigration flows. In fact, areas of the country recently experiencing the biggest slowdowns in unauthorized immigration also saw the biggest slowdowns in employment growth. I think most economists would not be surprised by this. Madeline Zavotny is a labor economist at the University of North Florida. But I think a lot of the American public who thinks that migrants take away jobs from people already here would be surprised. The number of native-born workers is shrinking, says Michael Clemens, who researches migration economics at George Mason University.

And the loss of immigrants? That has the immediate implication that our economic growth, which definitely depends on a growing workforce, will be harmed. Among the industry's most vulnerable are those most dependent on migrant labor, including agriculture, hospitality, manufacturing, and the San Francisco Fed emphasized, construction. Consequently, Clemens says home building will likely slow. That means reduced supply of homes being chased after by a similar demand. Which could lead to higher prices for homebuyers.

Zee Hernandez of the Wharton School says fewer immigrants also means less taxes collected, less consumer spending. They really are more than just labor. And their contribution to the economy, he says, is multifaceted. I'm Novosafo for Marketplace. On Wall Street today, interestingly, the prospect of the Fed may be raising rates did nothing to deter traders. We will have the details when we do the numbers. A gallon of gas, says AAA, costs today at the national average $2.99,000.

$0.53.3 a gallon. The national low is in Oklahoma, 229. The national high, including, by the way, Hawaii and Alaska, is the $4.58.6 a gallon we are paying out here in California. World's smallest violin, I know, but it is the fifth biggest economy on the planet. Marketplace's Elizabeth Troval is on the energy desk for us today. Decades of state policies have caused the situation California is in today, with refineries closing and gas prices at fully double than what you pay at the pump and say Oklahoma. For one, the taxes are about 40 cents a gallon higher. That's Robert Auerz with RBN Energy. He says state policies have also made it harder for refiners to update or build new facilities in California.

What's really the biggest killer is the inability to invest at all. I mean, and if you ever did want to build something there, it's really expensive. But you can't even get to that point because there are so many points along the way where projects can get stopped. So refineries have degraded and become outdated. Now, as refiners leave the state, Californians are paying extra to get their gasoline from elsewhere, like the Pacific Northwest and the U.S. Gulf Coast, says longtime energy analyst Tom Closa. But it takes a while. You know, it's a long voyage through the Panama Canal. And that gasoline has to go through the Bahamas first because of the Jones Act, which limits shipping from U.S. port to U.S. port.

We're also bringing in gasoline from places like Singapore, India, South Korea. It's a tradeoff for being a state that prioritizes air quality, says Matthew Saracosa-Walkins with UC Davis. There is this tension between California's goal of decarbonization. you know, and costs, essentially, prices for consumers. For the low and middle income households that can't afford an electric vehicle, they pay the price for California's regulations at the pump. I'm Elizabeth Troval for Marketplace. I've been out sick the past week or so.

I was traveling too and hence have been mostly off my work email. Believe me when I tell you then that I spent a solid 10 minutes the other day the leading spam from my inbox. All those junk emails and scam text messages, even the time you spend trying and trying to unsubscribe from one service or another, is all part of what Stanford economist Neil Mahoney calls the annoyance economy,

what we pay in time, fees, and irritation to navigate our daily lives. Professor Mahoney just wrote a paper for the groundwork collaborative, calculating just how much Americans do spend to deal with all those annoyances. Professor Mahoney, thanks for coming on the program. Great to be here.

You've done the math for us. How do you get to this $165 billion in wasted time and lost money? So I think it's just the tip of the iceberg. But what we tried to do in the piece is taught up how much time and money we are spending on health insurance paperwork, dealing with spam calls and text messages, waiting on hold for customer service, and with hidden fees and search charges. and we got to 165 billion. What's the methodology? I mean, how'd you figure it out?

Well, it's different for, you know, these different categories. For health insurance, you can actually look at the American time use survey, and people tell you how much time they spend dealing with paperwork, sitting around, waiting for things to happen. There are reports on, you know, how much money people lose from fraud, from text messages and phone calls. You know, we know how much time people spend. customer service because they can tell us in survey data and we've totaled up the hidden fees and

surcharges. Is there a slice of this economy sort of writ large in industry where we're spending the most time? I will be completely honest. I've got my own candidate for that. But you tell me what the actual data says. I mean, healthcare is just a major pain point for so many people from finding a in-network doctor that has availability to, I mean, I'm a health economist.

and I can't read a medical bill. So I can only imagine how daunting it is to a regular person. Right. Speaking of that, though, you and I are white-collar workers, and look, if we had to take an hour to sit on hold with the health insurance company, it would be a pain in the behind, but we could do it.

If you are an hourly worker or a truck driver or somebody in the blue-collar occupations, it's an entirely different ballgame. No, you're completely right. For people like you and I, you know, it eats into our lunch break, which is annoying, for people who, you know, can't take an hour off, they can't cancel that subscription. They can't contest that health insurance bill. They don't have the time to go back and forth and get the pre-off for some medical procedures. So for them, then it becomes real money or delayed medical care with much more serious consequences.

Right. we should say here that that some of these obstructions in our lives are are just that's just kind of the way it is. Others are sort of intentional, right? There are profit motives that companies have in delaying you from unsubscribing or what have you. No, totally. Companies want to make it easy to sign up and hard to cancel. Retail stores want to make it easy for you to buy, but if you want to return something, you're going to have to jump through hoops and hurdles.

So, yes, some of this is intentional part of the business model of companies in our economy. So look, what do we do about this? What is to be done? So we did some polling. And I think not surprisingly, people find this stuff massively annoying. Yeah. What did surprise us somewhat is that when asked whether people want their policy makers to take on these issues or they think they're best solved by the business sector, people want policymakers to stand up.

The catch, of course, is that policymakers, and this is a bit pejorative, but not much, can't agree on what day it is. Yeah. So, look, there are policymakers don't have a great track record with getting things done recently. And if you're an agency head or you're leading a congressional committee, this is not issue one or issue two or even issue three on your list. What we argue is that while each one, you know, while each one, you're not issue one. one of these issues may be small, if you can knit them together into sort of an agenda to

tackle the annoyance economy, then the whole becomes greater than the sum of the parts. And it can be something that makes a real difference in people's everyday lives and shows them that policymakers understand their daily experience and are fighting for them. Neil Mahoney, it's a professor of economics at Stanford. Professor Mahoney, thanks for your time, sir. I appreciate it. Thank you for having me. Coming up. A human having to do 10 clicks to just move material from here to here to here.

Hello, AI. But first, let's do the numbers. Dow Industrial's added 129 points today, about a quarter of 1% closed to 49,662. The NASDAQ increased by 175 points, about three quarters percent, 22,753, the S&P 500, 38 points to the good, 6 tenths percent, 68 and 81. one there. Madison Square Garden Sports is considering splitting its legendary basketball and hockey clubs, rather, into two separate companies. That's the New York Knicks and the Rangers of the same city. The move would, of course, require approval from both the NBA and the NHL. Madison Square Garden Sports Corp scored 16 and a third percent at a leading chip designer, Nvidia gains

ground today after yesterday's announcement of a deal with meta. Meta already accounts, by the way, for about 9 percent of Nvidia's sales. Tell me again that the AI economy It's not circular. I dare you. InVidia grew 1.6% today. Meta platforms expanded 610% You're listening to Marketplace. This is Marketplace. I'm Kai Risdahl.

Friday this week will be another update on prices, the personal consumption expenditures price index, which, if you're a regular listener, feel free to say it along with me, is the Fed's preferred measure of inflation. Now, it's not like the other ways we measure inflation, the CPI, most notably. It's not like that's bad, but the Fed does indeed play favorites.

Marketplaces Carla Javier explains why. There are a lot of ways to measure changes in prices, but this is how the Fed has decided to define price stability. A steady inflation rate of 2% using the PCE price index. That's Derek Tang at Monetary Policy Analytics. PCE is more dynamic than the Consumer Price Index, says Randy Krosner at the University of Chicago and a former Fed governor himself. It's a bit more representative of what people are actually buying today, rather than buying last year or a few years ago. It includes more people, and it also includes more types of payments. And more goods and services, says former Fed economist Ellen Mead, now at Duke.

It places greater weight on health care, for instance, and it places less weight than in the CPI on housing. PCE also captures spending on households' behalf by others, says Yale's Bill English, another former Fed economist. The fact that you don't pay directly for health insurance, maybe it's provided by your employer, doesn't mean that indirectly you don't pay for it in the end through lower wages, for example. And then there's core PCE, which excludes food and energy prices. By taking it out, you reduce the noise in the measure and you get a better signal of where inflation's likely to, be over the next year or so. And that, English says, matters for the Fed because they can't change inflation this month, but they can use this data to inform their decisions about the future.

I'm Carla Javier for Marketplace. We are in, as has been said, a time or two on this program, I do believe, what has come to be called a low-hire environment. The number of job seekers well outpaces the number of job openings. And so those who are looking are turning to recruit. Routers with a twist. Lindsay Ellis covers the workplace for the Wall Street Journal. Lindsay, good to talk to you again.

Thanks for having me. So let's just say, just for a complete hypothetical, that I was looking for a new job, how does this whole thing work? Oh, my God. So if you're looking for a new job right now, hypothetically, you are probably spending a ton of time online looking at job boards, looking at LinkedIn, looking at people's stressed out posts on LinkedIn, you know, fielding, potentially scammy outreach messages, trying to weed out what's real, what's not real, trying to beat applicant tracking systems,

desperation for referrals. And does it sound like a fun time deal? It sounds horrible. I can't imagine anything worse. Maybe I'm not looking for a new job. Should my boss be listening? Hold on to this one, I guess. That's right.

That's right. So I go to one of these reverse recruiters. How does it work? Typically, how recruiters operate is a company will hire them to find talent for a job. And once they get someone good, they'll get paid. And these days, you know, there are so many people who are looking for work right now that the model is basically turning on its head. So these reverse recruiters are basically pitching themselves to job seekers and saying, We will go out and help you find a job. And if you land one and accept it, you know, you're going to pay us. So instead of the company paying for talent, the job seekers paying to land something.

How much, again, hypothetically, were I looking for a new job? How much would I have to pay? It sort of depends. I mean, the models are different. I talked to a couple of companies that will charge basically a percentage of your starting salary. One, for example, is, you know, 20% of your first month's pay once it sort of lands in your bank account. Yeah. One company, for example, will charge a set rate of $1,500 a month. But this sort of model of the client being the job seeker instead of the company is what's really new

here. Right. And it does seem that there's a little vulnerability on the part of the client, right? I mean, you're a little bit desperate. You're out of a job. As you described at the top of this interview, it's tough out there now to find a job, right? Yeah. And I think more traditional recruiters, when they raise some flags here, they talk about the ethics of, you know, is it okay to be seeking business among people who are really desperate in this moment? So that is absolutely a consideration. It did seem in reading your piece that there's AI all over the place in this thing. Oh, my God, yeah. I mean, when I talk to both hiring managers and job seekers, they describe looking for a job right now as a robot versus robot war. You know, the candidates are using AI to generate resumes, write cover letters, while the companies are using AI to identify who in this massive trove of applicants might be a good fit.

no one is happy about this. And I think, you know, looking for these other ways to kind of break into the market is perhaps a byproduct of what is kind of a broken system for both parties. Last thing, and then I'll let you get back to your day job. This is white collar stuff, right? It's not like this is a service. Blue collar workers. That's a whole different thing. Yeah. I've mostly seen these reverse recruiters for white collar workers. I mean, I think there's always the potential for different lines of work too, but that's sort of where I've seen it focused so far. Right. Lindsay Ellis, she's at The Journal, covers the workplace and careers there. Lindsay, thanks a lot. I appreciate your time.

Thanks for having me. Have a good one. You too. A lot of the Agena on Wall Street of late, and yes, the caveat here, of course, is that we are still near record highs. But a lot of the turbulence that's been out there is that an end up there is that an issue. investors are starting to worry, it seems, that maybe artificial intelligence is going to be more disruptive in the short term than people had originally been thinking. And that Adjada is kind of industry agnostic. Software giants, brokerages, even trucking companies are getting caught in the down draft. A related but separate flip side of that is that the workers who are going to wind up using all those AI tools might be able to make and do more stuff in less time.

or as an economist would say, AI could make the labor force more productive. But as Marketplace's Justin Ho reports, that link between AI and increased worker productivity, at least right now, is murky at best. About a year and a half ago, a bike parts manufacturer near Minneapolis, called Wolftooth Components, started dabbling with AI. Co-owner Brendan Moore says the company thought it might be able to help doing research on the market for new products. So, like, we want to design Trinket A, what's the competitive? landscape of Trinket A out in the world and what does the broader internet think about other

product offerings and where are the weaknesses? Moore says the tools did a good job. So the company started using AI to improve its website to help brainstorm names for new products. It's also using AI to help automate some of the menial jobs real people used to have to do with its manufacturing software. If you think about an administrative task of like a human having to do 10 clicks to just move material from here to here to here, so we know where it is in the manufacturing process. We just automated that. More says some of that work used to take half a day. So now a staff can

use that time to focus on other stuff that requires an actual human brain. Developing a supply chain for a new product, looking at costing, looking at even material certifications, all these things that you have to do that are complex and require a lot of nuance thinking. As a result, Moore says the company can develop more products, more quickly, and at a better price. How much better it totally? It totally depends on the product. But essentially, it's going to be a better experience for our customers, and it's going to be better for our business because of the efficiencies we're going to have. That is the definition of higher productivity, more output and less time. It's easy to see AI's impact on one firm, but it's not so easy to see how it's affecting the economy as a whole.

We're not going to know for some time what the productivity impacts of AI are, in part because it's going to be really hard to measure. That's Erica, McIntarfer with the Stanford Institute for Economic Policy Research. She's also the former commissioner of the Bureau of Labor Statistics, which keeps track of productivity. McIntarfer says it's hard to distinguish what AI is doing from all of the other factors that have been boosting productivity recently. Better business practices, investments in research and development, the creation of new and innovative companies, even the loosening jobs market. If firms aren't hiring, but output continues to grow, labor productivity is going to increase just mechanically.

McIntarfer says many of those other factors were boosting productivity growth well before AI tools started to become mainstream. We start to see this uptick in productivity around late 22, early 23, and AI investments for firms in late 22 were actually pretty low. McIntyrefer says many companies are simply experimenting with AI right now, which means it could take a while for the technology to actually make those firms more productive. George Perks, macro strategists with bespoke investment companies. group says that's what happened when PCs became widespread in the early 90s. We didn't see the full benefits of that boom in compute availability and communications ease until really the early 2000s, mid-2000s even. Perk says it's clear that AI will have a positive impact on productivity, but it's unclear

how big, since the U.S. economy is so complex. You're talking about hundreds of millions of people doing at least that many, if not more, discrete tasks every day. You're talking about a huge number of complicated relationships between businesses, between businesses and consumers. You're talking about incredibly complex supply chains. Perk says for AI to have a measurable impact on the entire economy, the technology will have to become basically ubiquitous. I'm Justin Hove for Marketplace. This final note on the way out today, a coda of sorts to that interview I did with Lindsay Alice about reverse job recruiters. I saw this on Axios, that

The pay bump people are getting when they switch jobs now, 6.4%, the data is from ADP, kind of pales in comparison to the days when we were just coming out of the pandemic, early 2022, when job hoppers were getting an average bump of 16%. Our media production team includes Brian Allison, John Fokie, Montana Johnson, Drew Jostad, Gary O'Keefe, and Charlton Thorpe. I'm Kai Rizdahl. We will see you tomorrow, everybody. This is APN. Hey everyone, I'm Rima Grace, and this week on This Is Uncomfortable, I'm joined by my fellow podcaster, Sam Sanders, for a special love advice episode. We tackle listener questions about money and relationships, everything from secret investment accounts to parents making risky financial choices.

I have told people all the time, when you are experiencing an adult in your life who is acting like a child, that is the time at which you most need to be an adult. Listen to This Is Uncomfortable on your favorite podcast app.