The New York Times asked me earlier this week if I had any thoughts on President Trump’s DACA proposal. I did. And here they are.
If one follows the political debate over a divisive issue for a long time, it is not rare to see ideological advocates switch to making arguments they would never have made years earlier. The political environment changed, and the claims that need to be made to further the ideological objective must change as well.
Maybe it’s just me because I instinctively read in between the lines whenever I read anything about immigration, but I’m beginning to detect such a seismic shift in the immigration debate. We all know the party line by now: Immigrants do jobs that natives don’t want to do. As a result, natives do not lose jobs, and natives do not see their wages reduced. And anyone who claims otherwise is obviously a racist xenophobic moron. They obviously don’t like immigrants, and they obviously are not educated/credentialed enough to understand and appreciate expert opinion.
The flurry of immigration restrictions proposed by the Trump administration demands a switch in tactics–with a corresponding switch in the argument linking immigration and wages. The party line must now be that less immigration is bad. But how can one show that in simple-to-grasp economic terms that can be mass-marketed to the masses? By far the simplest way is to come up with examples that less immigration raises labor costs and makes us miserable because everything becomes more expensive.
I first noticed the tactical switch back in March when the Washington Post published a story headlined After decades in America, the newly deported return to a Mexico they barely recognize, The point of the story, of course, was to imply that Trump’s deportation initiatives are bad because they are making Mexicans worse off. And how exactly are Mexicans made worse off?
More returnees means lower wages for everybody in blue-collar industries such as construction and automobile manufacturing, where competition for jobs is likely to increase, economists say.
I love the “economists say” add-on. Too bad that those economic experts remain unnamed. But don’t be shocked if they are the same exact economic experts who have been claiming the same exact opposite for two or three decades in the context of the American labor market.
Then there’s this story in a local New England paper. The goal again is to demonstrate the economic costs created by Trump’s immigration restrictions. The Bangor Daily News article is headlined Amid foreign worker shortage, Bar Harbor businesses turn to local labor. The article starts off by noting that “Businesses in Maine that rely on summer help are hoping that Congress will come to the rescue.” And what do these businesses have to be rescued from? Higher wages, of course.
Because of new limits on the seasonal worker visa program, restaurants, hotels and other tourist-centered operations are scrambling to find seasonal employees. Until Congress opens the door to more H-2B foreign workers…Bar Harbor area employers are enticing workers in other ways. Higher wages are part of the solution.
The Dallas Morning News joins in the fun with a story blaming the immigration slowdown for higher housing prices. The story is headlined One Reason for Dallas’ soaring home prices and labor shortage: Immigrants aren’t coming to work:
Dallas home prices are climbing rapidly, and homebuilders are complaining about labor shortages and soaring wages for construction workers.
Duh! Who could have possibly guessed that fewer construction workers meant higher construction wages?
Finally, the highly credentialed economic experts at the Federal Reserve are out in force documenting just how costly the immigration-related actions of the Trump administration are. In a recent Bloomberg article headlined Fed Officials Sharpen Concerns Over Trump’s Immigration Policy, those credentialed experts expertly make the point:
Patrick Harker, president of the Philadelphia Fed, became the latest policy maker to call attention to the struggles of companies in finding low-skilled labor…The Chicago Fed said one manufacturing firm raised wages 10 percent to attract better applicants and improve retention of unskilled workers. A freight trucking firm in Cleveland reported granting raises of almost 8 percent in an attempt to retain workers.
There is no upper bound to the hypocrisy of experts. It might be a lot of fun to keep track of this over the next few years, watching the dominos fall and all those “immigration-does-not-affect-wages” experts fall all over themselves as they switch to proving the economic awfulness of Trump’s actions because fewer immigrants mean higher labor costs, higher prices, more inflation.
But don’t hold your breath for any admission that they were wrong in the past. They will instantly switch to the former party line the minute the Trump immigration restrictions fade into history.
According to the Washington Post, the Trump administration is considering a number of changes in current immigration policy, focusing more on the economic side of things this time around. That WP article is already cluttered with half-truths (spouted by the usual suspects at Cato and the like), so I thought it’d be a good idea to clarify the muddied waters regarding one particular proposal that is being considered to reduce welfare use in the immigrant population.
Since 1882, the United States has banned the entry of anyone who has the potential of becoming a “public charge.” This is how current law reads:
Any alien who, in the opinion of the consular officer at the time of application for a visa, or in the opinion of the Attorney General at the time of application for admission or adjustment of status, is likely at any time to become a public charge is inadmissible.
Since 1903, the United States has allowed for the deportation of immigrants who became a public charge after they entered the country, and this is how the law now reads:
Any alien who, within five years after the date of entry, has become a public charge from causes not affirmatively shown to have arisen since entry is deportable.
Given these very straightforward–and very old–restrictions, it seems puzzling that we would find many immigrants on welfare. But, as always, the devil is in the details. The law is often not enforced, and the common-sense definition of a public charge that we carry in our heads has little to do with how the immigration regulators have defined it. This is how that definition now reads:
For purposes of determining inadmissibility, “public charge” means an individual who is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance or institutionalization for long-term care at government expense.
Note the big elephant in the room. Immigrants who receive non-cash benefits–including the most expensive benefit of all, Medicaid–are not considered to be public charges. In the words of DHS: “Non-cash benefits (other than institutionalization for long-term care) are generally not taken into account for purposes of a public charge determination.”
If we began to actually enforce the law with a common-sense interpretation of the century-old statutes, the policy shift will affect an awful lot of people. I took data from the March Current Population Surveys (CPS) from 1994 through 2016 to calculate the fraction of immigrant-headed households who receive some type of assistance (either cash, food stamps, or Medicaid). I then divided the foreign-born households into 2 categories–those where the household head is naturalized, and those where the household head is not. Any proposed shift in policy would affect the non-naturalized households. And this is what the trend in the fraction of households receiving assistance looks like:
In 2016, there were 8.9 million households headed by a non-citizen. Almost 42 percent of those households received some type of assistance. Put bluntly, taking the public charge provisions of immigration law seriously could potentially affect 3.7 million households, making the recent kerfuffle over a relatively small number of refugees look like small potatoes.
The policy challenge is obvious, and the economic and social ramifications will be dramatic. Before we start envisioning deportations by the hundreds of thousands, however, let’s remember that we all respond to incentives. Few economists would be surprised if some of the affected households begin to find other ways of providing for their needs.
Some additional information:
- No need to take my word for the graph. The trends are very easy to reproduce by anyone who is willing to spend a little time looking at the publicly available CPS data. Here is the program, the data can be downloaded here; and click here if you are really geeky and want to see the computer output and detailed statistics.
- The recent immigration report of the National Academy of Sciences (NAS) has similar statistics on the number of immigrant households on welfare. Table 3-15 shows the fraction of households with children receiving some type of assistance (here’s a screenshot of the table). According to the NAS, 41.8 percent of native households and 55.8 percent of immigrant households receive assistance (but they do not break up the immigrant households according to citizenship status).
- The NAS report also calculated the size of the fiscal burden implied by these numbers; that discussion is in Chapters 8 and 9 of the report. See here and here for a User’s Guide to the NAS fiscal impact discussion.
- The CPS data are notorious for understating the extent of welfare participation in the population. The Survey of Income and Program Participation (SIPP) is supposed to provide much better measures of welfare use, but it is a much harder data set to manipulate. As I note in We Wanted Workers (Table 9.1), the welfare participation rate of immigrant households implied by the SIPP is far higher than what the CPS suggests (at least 10 percentage points higher).
Not surprisingly, over-the-top and often erroneous reactions to President Trump’s executive order tightening refugee admissions are flooding the web today. So I thought it’d be useful to repost what I wrote about extreme vetting last summer when then-candidate Trump first floated the idea. Here is the article I wrote for Politico. And here’s a short excerpt that helps put the president’s actions in context:
Immigrant vetting, and even extreme immigrant vetting, has a very long tradition in American history. Since before the founding even, U.S. policies about whom the country chooses to welcome and reject have changed in response to changing conditions.
Some people have asked me what I thought of the actions against illegal immigration that President Trump announced yesterday. As far as I can tell, he did exactly what he promised he was going to do, so there were few surprises in terms of what was going to happen.
But along the way, the President did something else that really struck me: he forced a much-needed late-course correction in the media narrative. Practically every story about illegal immigration in the MSM tells of immigrants who overcome incredible hardships and make an amazing contribution to American life (how many times have we read about the illegal children who end up going to Ivy League colleges), or they describe the suffering that immigrant families endure when immigration enforcement breaks up the family unit.
These stories are real, and are definitely part of what we should be considering when we think about illegal immigration. But there are other stories to be told, stories that don’t fit in with the narrative. Some illegal immigrants commit crimes, and natives have been harmed; some drive cars under the influence and natives sometimes end up getting hurt; and some native families have suffered a great personal loss, a different type of family separation due to (the lack of) immigration enforcement. For the most part, the MSM has made sure that these stories are hidden away, never to be acknowledged or discussed in polite discussions of illegal immigration. I’ve seldom learned about these cases from CNN, the Washington Post, or the New York Times.
President Trump specifically emphasized that other side of illegal immigration yesterday. Not only did he personally call out some of those families that have suffered irreparable harm from illegal immigration, but it seems that there will now be a weekly report of criminal acts by illegal immigrants. Needless to say, that listing would never have been prepared under the old regime. Regardless of where one stands on illegal immigration, it is hard to argue against the fact that more information about the issue is far better than the one-sided-stories the MSM has been feeding us for years.
It’s not often that I have much to say about these types of high-level government appointments. Typically, all I know is what I read in the papers. But this is one case where I do have some valuable private information.
I have met and “talked shop” with Senator Sessions a few times in the past. Those conversations always struck me as unusual. Unlike some other influential people in the immigration arena whom I have talked to, where I quickly began to suspect that their grasp of the nitty-gritty details was somewhat foggy, it was obvious that Senator Sessions was knowledgeable with and understood precisely what was going on in the immigration field.
Regardless of how one views his policy vision, there’s one thing we know for sure: The man at the helm of the Justice Department in the Trump administration, in charge of enforcing the immigration statutes, will be someone who has spent years studying the nooks and crannies of this obscure (and often incomprehensible) set of rules and regulations, who understands precisely how the immigration system is put together and is used (and misused) in the real world, and who strongly believes that the laws should be enforced. As I argued in an earlier blog post that provided some (unsolicited) advice to President-elect Trump, it seems to me that “enforcement first”–and specifically greatly slowing down the inflow of illegal immigrants–is a necessary first step if we are to have a sensible discussion about how to reform immigration policy. There isn’t a better qualified person in Washington to handle this job and to inform President-elect Trump about the various options.
On top of that, the senator is a very nice and approachable man, both in a professional and social setting. I always came away thinking that this must be what the “Southern gentleman” type is all about.
More than a few people have asked me in the past few days what advice, if any, I would give to President-elect Trump about immigration. Here are some more-or-less random thoughts that touch on a few of the policy issues that have to be confronted:
Enforcement First. The first step must be immediate action to greatly reduce the inflow of illegal immigrants. Illegal immigration has had a deeply corrosive impact on the immigration debate; it has paralyzed any rational discussion of how we should proceed along all other aspects of immigration reform. The open borders approach that allowed the entry of millions of illegal immigrants makes legal immigration policy “a travesty of a mockery of a sham.” Why bother waiting years abroad for that green card in the mail—such as the 23-year wait that some Filipino visa applicants are now enduring—when one can accomplish much of the same goal by running across the border or overstaying a tourist visa? I am not sure that a wall—despite its signal that we are finally getting serious about illegal immigration—will do the job; many of the illegal immigrants do not enter through the southern border. But I am willing to bet that the mandated adoption of an electronic system (such as E-Verify) that would force all employers to certify the visa status of all hires, along with very large fines and criminal penalties for law-breaking employers, would go a long way towards stemming the flow.
Benign Neglect. What to do about the 11+ million undocumented immigrants already living in the country? I think the wisest answer is: For the most part, ignore them! I find it very heartening that we do not have the stomach for such large-scale deportations. Most of those immigrants have led peaceful and uneventful lives in our country and became part of our communities. Their sudden removal would certainly not represent the America that many of us envision. I am also old enough to remember Daniel Patrick Moynihan being vilified for using the phrase “benign neglect” to discuss policy options regarding black economic progress in the late 1960s. Maybe it’s time to resurrect those words in the context of illegal immigration. Sometimes inaction is the best action. Most of the illegal immigrants already here will eventually qualify (if they haven’t qualified already) for visas through the family preference system. If the “enforcement first” step of stemming the illegal flow is successful, there can perhaps be eventual agreement on legislation that would accelerate the process of granting family preference visas to the existing undocumented population.