Deportations will deepen the Trump slump

BERKELEY — In his inaugural address this January, Donald Trump framed immigration to the United States as a national security threat, proclaiming, “I will send troops to the southern border to repel the disastrous invasion of our country.” He then directed the Department of Defense to draw up a plan to “seal the borders” by “repelling forms of invasion including unlawful mass migration, narcotics trafficking, human smuggling, and trafficking.”

“In more than 21 executive actions,” the BBC reports, “Trump has moved to overhaul parts of the US immigration system, including how migrants are processed and deported from the US.” His most extreme order, ending birthright citizenship, has already been halted by a federal judge, who deemed it “blatantly unconstitutional.” The US Constitution’s Fourteenth Amendment clearly states that, “[a]ll persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”

Yet despite all Trump’s nativist rhetoric, apprehensions of undocumented immigrants have fallen far short of what he has promised. In fact, the Biden administration deported more people per month, on average, than Trump has. Is this why Trump used his recent address to a joint session of Congress to beg for more detention personnel and capacity? In the meantime, he is using expensive military aircraft to send undocumented migrants back to their homelands, and otherwise relying on a “shock-and-awe” campaign – even sending deportees to Guantánamo – to sow fear among immigrants and their children.

Americans would do well to know that immigrants have been the most important factor behind the US economy’s outperformance over the past two years. Far from displacing native-born American workers, they have only added to America’s working population, thus boosting overall growth. The data show that the net economic gains to the US from immigrants, including undocumented workers, are substantial.

Consider California, where 27 per cent of the population is foreign-born – more than double the national average of 14 per cent. According to the American Immigration Council, immigrants make up 32.7 per cent of California’s labor force, 40.3 per cent of its entrepreneurs, 40.4 per cent of STEM (science, technology, engineering, math) workers, and 46.1 per cent of health aides.

Moreover, California’s undocumented residents contribute more than $150 billion to the state’s GDP (almost 5 per cent) and pay $8.5 billion in taxes, thus supporting many public services and essential programs that they themselves cannot access. The picture is similar across the US, where undocumented workers contribute some $100 billion to government revenues through sales and excise taxes paid on purchases, property taxes paid on homes and indirectly through rents, individual and business income taxes, unemployment taxes, and other channels. Many also pay into Social Security and Medicare – programs whose benefits they will never receive.

California itself has taken the appropriate and decent step of expanding undocumented immigrants’ access to public primary and post-secondary education, MediCal coverage, and the state’s refundable tax credits. The state also plans to provide nutrition benefits for undocumented adults aged 55 and older through the California Food Assistance Program, though this has been postponed for a year, owing to budget constraints.

Not surprisingly, the economic implications of Trump’s promised mass deportations are profound. The American Immigration Council estimates that it would cost the US 4.2-6.8 per cent of annual GDP, or between $1.1 and $1.7 trillion in 2022 dollars. By comparison, US GDP shrunk by 4.3 per cent during the Great Recession of 2007-09.

Nearly half of the GDP loss from mass deportations would be borne by California, Texas, and Florida. The latter two are red states (Republican-leaning). Will their support for Trump and his policies last if his deportations and their attendant economic costs start to mount?

The Trump administration itself is divided on immigration. While some factions reject all immigration in principle, others do not. Elon Musk’s support for the H-1B visa program for example – which admits thousands of foreign engineers and other skilled immigrants from India, China, and other countries – has provoked an extremely hostile reaction from America First nativists like Steve Bannon.

Although immigration policy is a federal issue, many states and cities are doing what they can to counter Trump’s deportation goals. For example, the California Values Act (passed in 2017) prohibits the use of state and local resources to assist federal immigration enforcement, with very limited exceptions.

Federal immigration reform is certainly long overdue. It has been 38 years since Congress last provided a path to permanent legal status for most undocumented immigrants. Yet a majority of undocumented immigrants today have been in the country for at least a decade, building their lives and raising their families. Although they graduate from high school and attend college, they remain blocked from fully contributing to the country because of their immigration status.

Canada, by contrast, has an immigration policy that many others seek to emulate. Foreign-born people comprise close to one-quarter of the country’s population, and it regularly admits new permanent residents through four main channels. In 2022, 58 per cent of immigrants were admitted through economic pathways, 22 per cent through family sponsorship, 17 per cent as refugees and protected persons, and 2 per cent for humanitarian or other reasons.

The Provincial Nominee Program alone accounted for roughly 35 per cent of Canada’s economic admissions in 2022. Through this program, people apply to individual provinces, which choose the candidates best suited to their economic needs. While the federal government must approve provincially supported immigrants, it grants most permanent residency. Given the diverse needs of Canada’s provinces, immigration opportunities are tailored at the provincial level – a useful analog to state differences in the US.

Trump’s mass-deportation policy is a moral and economic mistake. It is essential for states and cities to resist it in the near term, but that is not enough. The US desperately needs a modern immigration policy that addresses its economic needs and reflects basic realities on the ground. We must create a system that not only secures our borders but also allows people to come here legally, following annual targets for the number and composition of new arrivals. This was once a bipartisan goal. It should become one again.

Laura Tyson, a former chair of the President’s Council of Economic Advisers during the Clinton administration, is a professor at the Haas School of Business at the University of California, Berkeley, and a member of the Board of Advisers at Angeleno Group. Lenny Mendonca, Senior Partner Emeritus at McKinsey & Company, is a former chief economic and business adviser to Governor Gavin Newsom of California and chair of the California High-Speed Rail Authority. Copyright: Project Syndicate, 2024. www.project-syndicate.org