Bill Ackman, the hedge fund manager and activist investor, has an alternative idea to fight inflation: increase immigration.
He criticized the Federal Reserve’s interest rate hikes on Thursday and Friday as a sharp tool that will destroy consumer demand and trigger a recession.
“Inflation can be reduced by reducing demand and/or increasing supply.” he tweeted Ackman of Pershing Square Capital. “Doesn’t it make more sense to moderate wage inflation than to raise rates by increasing immigration, destroy demand, put people out of work and cause a recession?
The argument goes that by increasing the availability of American workers, companies will be less pressed to fill jobs.
Ackman, a longtime Democratic donor with a net worth of $2.5 billion, is not the first person to make this argument, and there is research showing that more migrant and temporary foreign worker visas are linked to more stable supply chains. and reduce overall consumer costs.
In another tweet, Ackman suggested that immigration policy can be crafted to “achieve important political goals like catalyzing the Russian talent drain to the US.”
The influx of workers could tighten the labor market historically, in which there are still roughly two open positions for every job seeker.
Unemployment, at 3.7%, is near its lowest level in half a century.
Supply chain delays, the war in Ukraine and Covid-related slowdowns have played a huge role in inflating food, energy and housing costs over the past two years. Corporations have also passed on costs to maintain profit margins, and climate change is creating unprecedented volatility in commodity markets.