A promise of using drastic measures to fix our immigration mess helped Donald Trump to get elected. So far, he stands by the harsh rhetoric he used to get votes. One has to wonder for how long because, on immigration, Trump the novice politician is on a collision course with Trump the seasoned businessman. Our current immigration policy in its political, social, cultural and legal aspects seems very entangled and hard to resolve. This is the way things are seen in Washington; no wonder nothing was fixed for decades. Mr. Trump promised to bring a business perspective –as he said it, to “drain the swamp” of political nonsense. Let us look at what Mr. Trump will see when he finally approaches immigration the same way as he has been addressing all challenges in his lengthy business career.
First and foremost, from the business point of view, immigration, or the migration of people in general, is not a problem, it is an opportunity; it is a blessing. The first settlers arrived here not because of any expectations of an easy and comfortable life. Jobs were not waiting for them. They were ready to overcome whatever challenges they might face, just to take advantage of the freedom to explore endless opportunities. Despite the fact that so much has changed since then, the main motivation of people migrating here is still the same. Consequently, foreign migrants, more often than not, are devoted workers, and as such are welcomed by American employers. Many immigrants do even more; statistically, more often than natives, they form new businesses, creating jobs for many.
All the data about immigrants’ successes in the U.S. confirms the basic intuitive understanding of migration, that only the most entrepreneurial, enduring and hardworking have the courage and determination to go for the unknown far from home. It is worth mentioning that at the beginning of the 20th century, when Europeans had no restrictions in coming here, only about two-thirds of those arriving here stayed. About one-third could not make it here or did not like it, and returned. It was a simple but very effective immigrant vetting system. It is only a matter of time that Mr. Trump will realize that a foreigner who lasted, let us say, five years as a valuable employee at the Trump Organization is probably better-vetted to be worth a green card than if vetted by any system designed and executed by bureaucrats from Washington. Not to mention that it would be cheaper for taxpayers.
Consequently, from the business point of view, the only immigration system that makes sense is employment-based. If a foreigner can find a job in the U.S., he or she should be allowed to come and have a shot at his or her chance for the American dream. If that person stays employed for, let us say, five years and has no criminal record, he or she should automatically qualify for a green card, leading to the right to obtain citizenship five years later. From the business point of view, this is the essence of the immigration policy that we should have. To make it work, we do not need to build the wall, we do not need thousands of border guards, we do not need E-verify, and we do not need an expanded immigration enforcement bureaucracy.
Suggesting that we do not need our elaborate immigration system sounds like heresy, but a businessman seriously approaching fixing it, at least for the sake of argument, should ask: Do we really need it as it is? Answering this question, one needs to look back at how it came into existence. From the beginning of the United States up to today, many immigrants have had this mentality: Let me in and shut the door behind me. After getting in, they do not want to compete constantly with a never-ending inflow of new immigrants willing to work harder for less. In the 1850s they viciously opposed Irish immigrants coming from their famine-bedeviled country, but did not succeed in making changes in the law. In 1882 they managed to legally block immigration from China. By the beginning of the 20th century they opposed new immigration mostly from Eastern and Southern Europe, mainly arguing that people from these areas were genetically inferior. That inferiority argument had a tricky twist in the case of Jews who, in big numbers, enrolled into major American universities, which was not liked by the WASP elites. This led to the Immigration Act of 1924, which, besides limited exemptions, practically blocked the legal ability to immigrate to the U.S. by most of the foreigners who might be interested in doing so.
Despite changes later on, the core concept of the Immigration Act of 1924, the idea of government controlling immigration, still remains. The reasoning behind it is still the same: America-first policy. Hence, it is worthwhile to look how this almost 100-year-old act (it was preceded by the provisional immigration acts of 1917 and 1921) came into existence and what were its consequences.
One needs to see the Immigration Act of 1924 in the context of its time, when socialistic ideas were seen as a wave of progress. It was commonly agreed that government should use its powers to address important social issues. It is worth remembering that many of the same people who voted for the Immigration Act of 1924, in 1917 passed the Eighteenth Amendment to the United States Constitution, establishing Prohibition. At the same time, the Soviet Union came into existence, and many saw it as a valid alternative for the cruelty of free-market capitalism. Prohibition was repealed, the Soviet Union collapsed, but the purely socialistic concept of the Immigration Act of 1924 is still upheld.
The very intention of our current immigration law is to protect American workers from the competition of foreigners. Let us see how it worked after 1924. New immigrants were a big part of the labor force, particularly in construction, traditionally one of the driving forces of the economy. When after 1924 the inflow of new immigrants dwindled, and the demand for new housing diminished, the construction industry shrunk. It was one of the contributing factors of the Great Depression, deepening its destructive effect on the nation. One can see an analogy to the great recession of 2008. If Congress had passed President Bush’s immigration reform bill of 2006, allowing legalization of then about 12 million illegal immigrants, then we can estimate that within the next few years at least two million of them would have been buying their first house. As they would have been buying mostly houses in low-income neighborhoods, they would have helped maintain higher market prices. As a result, fewer Americans would have gone under on their mortgages, would have qualified for refinancing, and would have been able to keep their houses. It takes a business approach to realize that many Americans, who likely voted for Trump, lost their houses as a direct result of their support of the tough policy against illegal immigrants.
The idea that limiting immigration can bring more jobs to Americans is based on the assumption that the economy is a zero-sum game, that whatever one person gains needs to be taken from someone else. In reality, the more people work, the more wealth is created, benefiting everyone. However, the most vicious opponents of increased immigration argue that only the richest benefit from the labor of immigrants; Americans stay unemployed. Again, a person understanding business knows that this cannot be true, as when immigrants might take some jobs, they expand the economy. Without them a given factory might not be open at all, depriving many Americans of mostly well-paid jobs. Also, immigrants need to pay for food, housing and other necessities as much as everybody else, supporting many local businesses.
Since 1924 the federal government has been in charge of limiting immigration in order to execute an America-first policy. Trump the novice politician bought the argument that this way government protects American workers from malicious foreigners trying to take their jobs. Trump the businessman will eventually realize that the actual conflict is between economic interests of American workers and economic interests of American employers, who simply often prefer hiring foreigners over their American-born compatriots. If we take seriously the promise that in the United States everyone should have the freedom to pursue happiness, and that government should not use its powers to help some at the cost of others, then the very concept of our immigration policy should be questioned. Trump the businessman will see it clearly that, being deprived free access to foreign labor, American businesses are restricted in their ability to prosper. Consequently, they hire fewer Americans and the economic growth of the nation is constrained. Everybody is losing. In particular, the federal government has less tax revenue; hence, President Trump will have less cash on hand to deliver on his election campaign promises. The businessman Trump knows that cash is king. Getting this cash into government coffers is the key to his success as President.
From studies done by Charles Murray, published in the book “Coming Apart,” and data from the Bureau of Labor Statistics, one can conclude that about 10%, maybe as much as 15%, of productive-age Americans do not have any usable skills to be employed at all in the 21st century economy. Even for basic manual labor they lack discipline and the ability to follow directions, not to mention a plague of substance abuse and obesity. They lose in competition with immigrants, who are often barely literate, speaking no English but willing to work hard and learn. Many of these immigrants are illegally here. Trump the politician wants to deport them all. By doing so, Trump the businessman needs to convince American employers to hire people they considered as unemployable in the first place.
Despite the lofty intentions, in reality the logic of our current immigration policy boils down to government limiting the freedom of enterprise of the most entrepreneurial and most industrious among us in order to accommodate the unearned demands of the laziest among us. Helping the most disadvantaged might sound noble for some politicians, but a businessman can see clearly that the more the ability to prosper is limited for the most entrepreneurial among us, the fewer resources are available to provide help to those who might need it.
It should be mentioned that the immigration policy established in 1924 was modified in 1965. The arbitrary quotas were replaced by the family sponsoring system. The logic behind this approach was that immigration to the U.S. is a gift that a wealthy nation can offer only to the very few in the world. Politicians in Washington decided that those very few should be family members of the U.S. citizens and residents. Mr. Trump will notice eventually that the Trump Organization would quickly go bankrupt if it would hire people just because their family members already work there. The job at the Trump Organization is not a gift, and the right to come to the U.S. should not be a gift either. This should be earned by being a productive member of the team, be it the Trump Organization or the American nation.
It is worth mentioning that eventually the family-based immigration system was questioned as unfair to those foreigners who have no family members in the U.S. In response, bureaucrats in Washington invented a green card lottery, which we have had since 1990. This is a pinnacle of the nonsense accumulated in the current immigration system.
In order to sustain this system the government needs to expand its apparatus of oppression so American employers can be coerced to act against their best economic interest and do not hire people they want. As the current immigration policy disturbs the personal lives of millions of people trapped in this byzantine system, many Americans oppose it on moral grounds, helping illegal immigrants as a result. In order to overcome this, the government would need to establish a massive Stasi-style surveillance system spying on all citizens; encouraging all of us to snitch on each other. In other words, in order to consequently enforce our current immigration policy we need a Soviet-style totalitarian political system. The sole reason why our immigration policy as we have it is not enforced so far is that we do not have a totalitarian government, yet.
The pet project of Mr. Trump the novice politician, the wall on the Mexican border is a special case in this landscape. If President Trump forgets what businessman Trump learned and he stays ensnared by fanatic anti-immigration ideologues, the economy will shrink. It may not take long before the American economy will collapse to the point that no one would be interested in coming here legally or illegally, but many might be willing to leave. The wall will not be needed, except for one unexpected reason. With the economy shrinking, the center of technological progress will move from the U.S. to somewhere in Asia. Many top scientists, engineers and entrepreneurs will start relocating outside of the U.S. as well. This might deprive the U.S. technological and scientific capabilities critical for the national security. The government, believing that it has the right to control migration according to its supreme ideas, will do the same as what is does now with our immigration policy; it will issue a law forbidding certain people from going where they want to go – leaving the country in this instance. Then, the freshly new and well-staffed wall on the Mexican border might come in handy to catch American engineers and scientists trying to escape the country illegally.
On immigration, President Trump will need to define where the swamp is. Is it in our current immigration policy, as clever in its concept as Prohibition was and as easy to implement? Or is it in our political establishment being incapable so far to implement it?