One of the most important issues that the new administrations faces concerns immigration policy. In his first month in office, President Trump signed an executive order that calls for much of what he had promised during his campaign. The order fulfills what many anti-immigration advocates have been wanting to see from the government, including the call for construction of a physical wall, greater border patrolling and mass deportation of undocumented immigrants, arguing that it would be the best thing for America’s safety and economy. But does such a strong anti-immigration policy benefit the United States economy? The answer might just be a big no.
It is unlikely that the construction of a wall should build up much support from anyone but the most extreme advocates. The reason being that the costs would simply outweigh the benefits. Constructing a wall, which has been talked about for years now, could reach up to $25 billion of expenditures by the US government. Each dollar that would go into purchasing the cement, the concrete, and the labor would come straight out of the pockets of the American people via taxes as well as through an increase in the national debt.
Assuming the construction of the wall is justified – that it would appropriately halt undocumented crossings – it may not necessarily have a significant impact on overall illegal immigration. After all there are substitutes to land transportation, such as by water via the Pacific or the Gulf, and via air. If foreigners are willing to face life-threatening dangers to cross the border by land now, it seems too simplistic to say a wall worth billions would stop them from finding their way in.
Instead of spending billions on a wall that may or may not be knocked down one day, a better long run move for the US might just be to invest in its relationship with the countries where most undocumented immigrants originate. If relationships can be built, the US could set itself up as an ally to support economic growth in those countries, ultimately keeping their citizens happy and increasing the opportunity cost of immigrating to the US. There is less incentive to leave a country when it has a higher standard of living.
Whether the US builds a wall or not, anti-immigration advocates will continue to argue for mass deportations and tougher border controls. However, the mission to remove all undocumented immigrants is difficult and almost seems like a pointless game when foreigners keep entering regardless of the probability of getting caught. It is a game that cost tax payers over $6 million last year, and will cost more the future.
If the US does manage to remove all the undocumented immigrants from the US, the American people will surely be better off with all the job availability and the drop in welfare costs, right? Possibly not. Though it is widely perceived that immigrants are a heavy cost to American tax payers due to their consumption of welfare, they actually are not. Undocumented immigrants are generally illegible to receive public benefits, and even when/if they do receive their residency most are less likely to receive such benefits compared to native-born citizens “even when they are at comparable levels of economic need for assistance”. The cost of a wall or greater deportations would hit American pockets harder than these costs.
The removal of all undocumented immigrants would hit America’s productivity hard as well. Yes, immigration, including unauthorized immigration, does lower wages for low-skill labor because its increases the supply of labor. However, removing these unauthorized immigrates from the country might increase wages, but the increase in wages will cause employers to shift their demand of labor and cut the number of jobs available. Moreover, increased wages would cause the price of goods to increase. Removal of undocumented immigrants would also hurt consumption. In 2014, the purchasing power of Latino and Asian consumers reached up to $1.3 trillion and $770 billion dollars, respectively. If there is no significant difference in the economic contributions between documented low-income immigrants and undocumented immigrants, removal of all undocumented immigrants would put a large dip in the overall demand of goods and in the supply of cheap labor in the country, hurting a lot of businesses, big and small.
Rather than deport all undocumented immigrants from the country, the US government should allow those who have already rooted themselves in the US to remain and allow them to obtain their residency. However, because they did unlawfully enter the country, the government should require undocumented immigrants to wait a longer period than what is required now before obtaining eligibility for citizenship. This way, these undocumented immigrants can be appropriately accounted for and fully pay their taxes. Moreover, removing the uncertainty of being deported would allow them to contribute to the economy as those who are native-born or documented can now. Many Latin American and Central American economies function because of small business, just as the United States economy. If unauthorized immigrants can open their own small businesses or enter competitive labor markets, they will increase the competition that drives this economy. Again, the higher labor supply may decrease wages, but in certain competitive fields, such as in the health care sector where costs are significantly higher than in other countries, this may not be a bad thing for the American people. Furthermore, to stand out, the higher supply of labor would incentives others to be creative, innovate, invent, and push the economy forward. It may also redistribute labor to other high-wage fields with less competition. All of this will benefit the US in the long term.
Immigration policy is undoubtedly an important and complicated issue, and the concerns of those who are anti-immigration are real. Anyone who comes to this country should be accounted for, for tax purposes and because information regarding all those who live in the country is valuable – both for the security of the country and for the greater precision in economic data. However, to build a wall or deport thousands of immigrants could hurt the US, not only by limiting its potential growth, but by hurting its relationships with other countries and by setting us back as leaders of innovation.