by It’s obvious enough by now that support for Trumpism in the US and elsewhere is motivated primarily by racial and cultural animus, and not (or at least not in any direct way) by economic concerns. Still, to the extent that Trumpism has any economic policy content it’s the idea that a package of immigration restrictions and corporate tax cuts[1] will make workers better off by reducing competition from migrants and increasing labor demand from corporations. The second part of this claim has been pretty thoroughly demolished, so I want to look mainly at the first. However, as we will see, the corporate tax cuts remain central to the argument. For this purpose, I’m going to start with estimates presented to the US Senate by the restrictionist Centre for Immigration Studies, which draw
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It’s obvious enough by now that support for Trumpism in the US and elsewhere is motivated primarily by racial and cultural animus, and not (or at least not in any direct way) by economic concerns. Still, to the extent that Trumpism has any economic policy content it’s the idea that a package of immigration restrictions and corporate tax cuts[1] will make workers better off by reducing competition from migrants and increasing labor demand from corporations. The second part of this claim has been pretty thoroughly demolished, so I want to look mainly at the first. However, as we will see, the corporate tax cuts remain central to the argument.
For this purpose, I’m going to start with estimates presented to the US Senate by the restrictionist Centre for Immigration Studies, which draw mainly on the work of George Borjas at Harvard. These estimates have been the subject of vigorous criticism, but, AFAIK, no-one has suggested that they overstate the benefits of migration. So, for the sake of argument, it makes sense to start here.
The CIS estimates that the effect of migration is ” In short, the winners from immigration gain $594 billion and the losers lose $531 billion, for a net gain for $63 billion.” The winners in this estimate are business while the losers are native-born workers. The losses in the estimate are concentrated on low income workers, while some of the benefits probably go to high income workers like finance professionals (whose incomes will generally be correlated with profits). All gains and losses are in terms of annual income.
As would be expected, the CIS calculation disregards benefits to non-native born workers and their families, whether they are naturalized US citizens, legal residents or undocumented. In the CIS view, if you weren’t born in the US, you don’t count for anything.
To understand what’s going on here, it’s critical to observe that the discussion isn’t about migration flows but about the cumulative effect of migration, represented by the entire non-native population. That is, up to a first approximation[fn1], the CIS is comparing the current situation to one in which immigration had been held to zero throughout the lifetime of the current workforce (say, since the 1950s).
Now let’s look at the Trump corporate tax cuts. They benefit companies and high income earners to the tune of $2.3 trillion over 10 years or about $230 billion a year. That’s nearly half the amount transferred from workers to capital from all the immigration in living memory, as estimated by the CIS. And, of course, Trump’s tax cuts come on top of a string of tax cuts and other policies all of which have harmed labour and helped capital.
On the other side of the coin, suppose that Trump succeeded in deporting all undocumented workers and banning new immigration altogether. The estimates I’ve seen suggest that about 20 per cent of non-native workers are undocumented and that legal immigration (around one million per year) is equal to about 1.3 per cent of the current non-native population (around 60 million). Relying on the CIS estimates, it would take 20 years of such draconian policies just to offset the Trump tax cuts.
In practice, nothing like that is likely to happen. Anyone who voted for Trump on the basis of economic concerns about migration, or globalization more generally, has been taken for a ride. The same is true of voters for Brexit and for the anti-migrant forces that are now taking over, or marginalizing, old-style hard neoliberal parties on the political right around the world.
Turning the argument around, the CIS estimates suggest that immigration is hugely beneficial to corporations operating in the US. That implies that a combination of expanded immigration and higher corporate tax rates, along with higher minimum wages, would leave corporations better off, while also benefiting workers and allowing for higher public expenditure. The usual arguments about capital mobility don’t apply here. The only way corporations can benefit from migration to the US is to operate in the US.
I don’t suppose arguments of this kind will make a lot of difference given the prevalence of overt racism on the right. But, to the extent that racial appeals are being used to divide the working class, it’s important to be clear about the fact that, economically, the common interests of native-born and immigrant workers far outweigh the potential competition between them. This is an argument that the left has had to make repeatedly throughout the history of capitalism, and that we will probably have to make again in the future.
1. This doesn’t take account of the US-born children of immigrants. However, given that US immigration peaked around 2000, most children of immigrants are still too young to be in the workforce, while representing sources of demand for goods and services produced by US workers.