Trump Doesn’t Understand the Economics of Immigration

The United States is facing an aging population and a lack of skilled workers. The president's immigration policy is only going to make it worse.

Illustration by Matthew Hollister

President Donald Trump’s decision to end the Barack Obama administration’s Deferred Action for Childhood Arrivals (DACA) program for immigrants who came illegally as young children surprised many people, but it shouldn’t have. No group of undocumented immigrants is more sympathetic than DACA recipients, half of whom came to the United States with their parents when they were 6 years old or younger. But Trump’s assurances that he has a “great heart” and “great love” for them is belied by his history of using immigration as a wedge issue to motivate his base.

The DACA ball is now in Congress’s court. Over the years, various bills that have included provisions granting DACA recipients legal status have passed in one house in Congress but died in the other. The same will happen this time if GOP leaders insist on passing a bill with only Republican support. And if the Republican leadership tries to pass legislation in the House with only Republican support, perhaps tying it to a measure to fund a border wall with Mexico, it will likely die in the Senate. Anyone who thought Trump’s only concern was stopping illegal immigration wasn’t paying close attention. Trump’s ugly campaign rhetoric may have focused on illegal immigration — building walls, protecting Americans’ jobs, and stopping a largely imagined crime wave — but, behind the scenes, candidate Trump was working closely with hard-liners who have long lobbied for cutting legal immigration drastically.

In a mostly ignored 2015 campaign policy paper titled “Immigration Reform That Will Make America Great Again,” Trump promised, “Before any new green cards are issued to foreign workers abroad, there will be a pause where employers will have to hire from the domestic pool of unemployed immigrant and native workers.” He also proposed making it more difficult for employers to hire highly skilled foreign-born workers on H-1B visas, reining in funding for refugee programs, and ending the J-1 exchange program that brings in foreign workers. It should come as no surprise then that on Aug. 2 the White House threw its weight behind the most sweeping restriction on legal immigration proposed in nearly a hundred years.

The Reforming American Immigration for Strong Employment (RAISE) Act, which was introduced by Sens. Tom Cotton (R-Ark.) and David Perdue (R-Ga.) with the support of the Trump administration, would almost immediately cut 41 percent of legal immigration to the United States, halve it within 10 years, implement a point system that favors skilled workers and English speakers, largely eliminate family sponsorship except for spouses and children under 18, and dramatically change the demographic profile of new immigrants. The bill is a throwback to an earlier era, when the 1917 and 1924 immigration acts, for the first time in the country’s history, imposed broad restrictions on immigration to the United States.

The RAISE Act is missing the inflammatory language of those earlier laws, but its intent appears similar — to keep immigrants out. The 1917 law barred “all idiots, imbeciles, feeble-minded persons, epileptics, [and] insane persons” and virtually all immigrants from what was called the “Asiatic Barred Zone.” The 1924 act restricted immigration from Southern and Eastern Europe, then the largest source of immigration, because immigrants from those countries were presumed unassimilable. Of course, those fears proved unfounded as immigrants, many of them illiterate, eventually learned English and climbed the socio-economic ladder, achieving parity with other Americans within a couple of generations. Current data suggests that the same is true for newer immigrants as well.

The children of immigrants now have higher college graduation rates than the overall population: 36 percent compared with 31 percent, respectively. Fear that today’s immigrants won’t assimilate as quickly as previous generations may be driving the RAISE Act, but that fear is overblown at best — and at worst motivated by prejudice toward immigrants from Latin America and Asia.

According to analysis by the Migration Policy Institute, the RAISE Act would have an immediate effect on immigration from Mexico, the Dominican Republic, the Philippines, China, India, and Vietnam — the countries that most rely on family-based visas — because although some immigrants from these countries might qualify under the new, skills-based system, most would not, and there would be fewer visas to go around. Legal immigrants from Mexico and Central and South America would largely disappear from the mix, as would many Asians who aren’t fully proficient in English or haven’t yet earned college or graduate degrees.

Although supporters of the RAISE Act claim it will improve the quality of immigrants admitted to the country by taking only those who are highly skilled, the loss of lower-skilled immigrants under the proposed bill is a major problem.

The assumption of the bill’s authors and the Trump administration is that unemployed Americans, or those who have dropped out of the labor force altogether, will step in to take jobs currently held by lower-skilled immigrants living in the country legally or illegally. But there is little evidence that this would happen. Will Americans who can now draw unemployment, welfare, or disability benefits suddenly rush to take jobs picking crops, milking cows, scrubbing toilets, processing poultry, or replacing roofs, even if the pay is somewhat higher than what immigrant workers in those jobs currently receive? One of the reasons immigrants, here legally or illegally, fill so many of these jobs is that their skill sets match them.

According to the U.S. Bureau of Labor Statistics, “Two-thirds of the 30 occupations with the largest projected employment increase from 2012 to 2022 typically do not require postsecondary education for entry.” In choosing a low-skilled worker, can employers be faulted for picking a foreign-born worker for whom the job presents upward mobility and a chance to provide a better opportunity for his or her family over an American whose failure to graduate suggests issues with perseverance, discipline, or delinquency?

The current system, with all its flaws, provides a better match to the U.S. labor market than the RAISE Act. If Congress and the Trump administration want to improve our immigration system, moving to a more skills-based program is a good idea — provided it recognizes the need for a broad range of skills among immigrants, including those generally regarded as low-skilled but who fill niche markets. Most importantly, however, the system must be flexible and market-oriented and shouldn’t ignore the country’s real demographic challenges. The biggest of these, as in most industrialized nations, is a falling birthrate and an aging population. We face looming Social Security and Medicare crises, caused by a shrinking population.

The goal of a sensible immigration policy should be to bring in the workers America needs. The one thing a 21st-century immigration policy should not do is return to the prejudicial early 20th-century mentality that only certain groups will make good Americans. It was a false premise in 1917, and it is no less so today. America remains that “shining city on a hill” that Ronald Reagan famously spoke of and should be, within reason and national need, “open to anyone with the will and the heart to get here.” This first step should be to protect DACA recipients, who are American in every way that matters.

This article originally appeared in the September/October 2017 issue of FP magazine.

Illustration by Matthew Hollister

Linda Chavez, a senior fellow at the Niskanen Center and founder of the Becoming American Institute, was the director of the White House Office of Public Liaison under Ronald Reagan from 1985 to 1986. Twitter: @chavezlinda

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