A Debate Worth Having

Tuesday night’s event was unlike any presidential debate any of us have ever seen, but in at least one aspect, it was also familiar: immigration policy in general, and the question of limits in particular, were given short shrift. In fact, they were not debated at all.
Saagar Enjeti says the absence of a substantive immigration exchange was particularly harmful to Trump, whose huge margins with immigration voters helped him pick up “disenfranchised new Republicans” (including Democrats) in 2016:

Enjeti argues the political lessons of 2016 were forgotten by both parties almost as soon as the votes were counted. Here he is on his show Rising a few weeks ago:
(Starts at 4:20)
For a brief shining moment, people actually paid attention. But Trump, for all his insight, basically just handed over much of his power to the GOP establishment. The Democrats decided their support for mass immigration and Chinese offshoring had a lot less to do with [Trump’s] victory than Russia or James Comey, and the lesson was forgotten by both parties. Today we see the consequences of that.
Federal immigration policy has mostly remained on auto-pilot for decades. The Department of Homeland Security tracks the number of permanent work permits (green cards) issued to immigrants every year. As the chart below shows, more than 1 million permanent work permits have been issued since 2005, regardless of unemployment, wage stagnation, or labor force participation (the lone exception was 2013 when immigration officers were pulled away from their regular duties to process DACA applications).

The government also authorizes roughly a million temporary “guest” workers every year.
How has the immigration system stayed on auto-pilot for so long? The economist Jeff Rubin says it’s simple if you follow the money:
Andrew Carnegie referred to [immigration] as “a stream of gold.” Most [corporate interests] – from a German employers Association, to the Business Council on National issues in Canada, to the Koch brothers – have always been huge advocates of increased immigration and open borders. Is it the desire to basically help people in impoverished countries with the promise of a better life here, or are there perhaps less altruistic motivations, like obtaining a source of cheap labor?

American industries see themselves as being responsible first and foremost to their shareholders, and when it comes to what’s best for the value of their shares, a greater supply of workers is always going to be viewed as better than a greater demand for workers. Here’s Michael Lind on how mass immigration helps American industries keep their labor costs low:

Firms also practice labor arbitrage by importing legal and illegal immigrants or guest workers as substitutes for American workers with labor rights, including the right to organize. Employers in low-wage sectors like agriculture, construction, meat-packing, hotel maid service, and fast-food restaurants, as well as some high-wage sectors in Silicon Valley, have used illegal immigrants or legally authorized guest workers to evade U.S. labor laws and weaken unionization.

Short of industry titans suddenly deciding to put the interests of wage-earning Americans above the investment class, American workers have the right to appeal to their government for an immigration policy that better serves their interests. But might there be something in there for industry as well? Micah Meadowcroft thinks so. Because a well-paid America, he argues, will be a more innovative America:

If we want to live in space-age America, we must force capital both to invest in the research and development of true labor-saving technology and to pay American workers enough to have the leisure time in which to tinker. It is in this combination – of meeting clear needs with sufficient funding (i.e. time), and the thoughts that come in an unhurried stroll outdoors or a conversation with a friend–that we see breakthroughs of human ingenuity. If you’ll recall your introduction to economics, a decrease in supply paired with an inflexible demand drives up the price of something. To make American labor more expensive, we must restrict the supply of labor. If we want to live in space-age America, we need renewed private-sector unions, enforced immigration laws, and preferential trade and industrial policy. Surely you don’t mean we need to restrict high-skilled labor, too? Even setting aside the obvious negative dynamics of H-1Bs and American software development, yes.

Meadowcroft’s commentary couldn’t be more timely. Just this morning, The New York Times reports that a federal judge has blocked the Trump administration’s temporary pause on foreign-worker visas, clearing the way for “major companies like Microsoft, Goodyear Tire and Exxon Mobil to resume bringing employees from abroad.”

A majority of Americans support suspending foreign-worker visas during the pandemic, but the judge ruled in favor of the coalition of plaintiffs, including the National Association of Manufacturers, the National Retail Federation, and Microsoft and Amazon, saying in his judgment that the Trump administration failed to consider “the impact on American firms and their business planning.”

Is our immigration system addressing the needs of the moment? Is it preparing us to meet the challenges of the future? How much impact should immigration have on the supply of labor during a pandemic and economic recovery? With the labor force participation rate steadily circling the drain over the last 25 years, it is hard to accept to that any part of our auto-pilot immigration system hasn’t redounded to the benefit of American firms over the last several decades. Even the plaintiffs in this case appear to be wary of public blowback. The comments printed in The Timesfrom the senior vice president of the manufacturers association don’t say anything about why these firms need hundreds of thousands of foreign workers when millions of Americans are out of work. Instead, she says it is about “innovation”:

“We are competing with the rest of the world to find and develop top talent to support innovation in our industry,” said Linda Kelly, a senior vice president and general counsel at the manufacturers’ association. “Today’s decision is a temporary win for manufacturers committed to building that innovation in the United States.”

Which is better for innovation, a loose labor market or a tight one? Should immigration policy maximize the options for American firms or American workers? Is the system of stockpiling unemployment and sifting for the next genius worth keeping on autopilot, or is it time to test drive Meadowcroft’s theory?

These are debates worth having.
JEREMY BECK is the Director of the Sustainability Initiative for NumbersUSA