Biden's Executive Order May Boost Supply Chain Efficiency, But Impact Labor Market

President Joe Biden on Tuesday signed an executive order to temporarily shut down asylum requests at the southern U.S. border when the number of daily claimants rose above 2,500.

As per the new executive order, the government will discontinue this restriction after the daily average of migrants crossing the border falls below 1,500 for a week. While this new order can lead to the tightening of the labor markets, it will also ease the supply chain bottlenecks between the United States and Mexico.

The Department of Homeland Security deals with roughly 4,000 migrants on a daily basis, as per NBC News. This restriction won't be a hurdle when it comes to travel or trade. Furthermore, it will allow immigrants to legally apply for asylum.

Ernie Tedeschi, the economics director at Yale University's Budget Lab, explained that this was a "modest move as far as immigration changes go, so I think it would have only a small effect on job growth and economic expansion."

"I'd expect [job] numbers to cool a tiny bit," Tedeschi, who had formerly served as chief economist at the White House Council of Economic Advisors, added. "I'd also expect many immeasurable effects: say, a business finding it a bit harder to find the workers they need to open a new location."

Tedeschi further said that two million workers have been added to the U.S. labor supply since 2019, noting that without this supply the size of the U.S. labor market would have reduced by 1.2 million.

Experts believe this move will not increase the price of goods.

"Immigration has an ambiguous effect on inflation, since immigrants expand supply but also bring added demand as well," Tedeschi said.

Customs and Border Protection agents often get busy while processing the large number of migrants, which leads to the shipping getting blocked.

"When you slow down that logistics chain, it costs everybody money," said Jerry Pacheco, president of the Border Industrial Association, a New Mexico trade group.

The executive order may help clear some of this clogging as the agents can help with facilitating faster shipping with Mexico.

"It's like a hot potato. It's passed on from the logistics companies to manufacturers and manufacturers pass it on to us, consumers. That has a profound negative impact on our economy," Pacheco said.

The official statement of the White House disclosed that the new actions will stop those migrants who are crossing the Southern border unlawfully from receiving asylum. It mentioned that the new order will make it easier for immigration officers to remove those without a lawful basis to remain, apart from reducing the burden on our Border Patrol agents.

The Department of Homeland Security has sent more agents to the Southern border and is quickly processing a record number of people for removal. The department is also running more repatriation flights each week than ever before.

In the past year, they have removed or sent back over 750,000 people, the highest number since 2010.

The Biden-Harris Administration is also working with regional partners to stop illegal migration, as per the statement. The administration is increasing investment and opportunities in the region to help people stay where they are and creating more legal pathways for migration as an alternative to illegal routes.