Republicans: Ignoring the Economic Consequences of Immigration Enforcement
By: Dave Nalle
Tags: Politics, Immigration Reform, Immigration, Employment, Economy

A popular talking point for “conservative” Trump supporters is that we need to step up prosecution of companies that hire illegals. This has been an ongoing theme for the nativist right since they managed to pass E-Verify as a pilot program in 1997. It shows how far Republicans have moved away from their traditional values that they think a good strategy for controlling immigration is to burden businesses with additional paperwork, restrict who they can hire, and hit them with crippling fines if they don’t comply.

According to a study by the Pew Center these illegal workers are concentrated in construction, farming and food production and in domestic service. They are employed overwhelmingly by small and mid-size businesses, the type of businesses which have low profit margins and can be forced out of business by additional expense — the type of businesses which are the backbone of the entrepreneurial middle class.

The rhetoric on this issue has become increasingly heated, with many pundits contending that it is a good thing for the nation if these small businesses are forced to shut their doors for hiring undocumented workers. As is often the case with such emotional rhetoric it fails to take into account the full implications of the actions being advocated. Policies which limit access to workers and raise costs have a ripple effect which many proponents of this sort of policy do not anticipate or just don’t care about.

The consequences of stepped up immigration enforcement that targets companies are serious and represent a very un-republican failure to prioritize the interests of business and the national economy.

The goal of all of this enforcement is to get companies to stop hiring illegal workers. The assumption is that if companies stop hiring illegal workers they will start hiring legal workers, but this seems not to be a realistic outcome. As demonstrated by recent round-ups of undocumented workers in Florida, Georgia and Alabama, when the illegal workers disappear it creates a real problem for fruit producers. Even paying $24 an hour was not enough to convince the available legal workers to pick fruit. They would come out, work half a day and go home, never to return. Raising wages doesn’t solve this problem because there comes a point where that increases production costs and causes price inflation that makes it cheaper to import fruit than to buy it domestically. Similar effects have been observed with meat packing in the midwest and even with bakers and food service jobs in Texas. These are the types of consequences that are not considered by short-sighted immigration restrictionists.

The secondary consequences are also overlooked. When companies cannot operate competitively they either go out of business, or if they are large enough to do it, they move overseas. This doesn’t just hurt the low level workers the immigration restrictionists are targeting. When a company closes its doors or offshores it also puts management level native workers out of their jobs and reduces revenue for all of their secondary suppliers and service providers. Bankers, accountants, printers, trucking companies and myriad other companies lose revenue, lay off workers and even go out of business.

The Republican Party has been criticized as being the party of business and I think that has been one of its strengths in the past, but that tradition runs directly counter to the goals of their nativist constituency, and under Trump the nativists clearly have the upper hand. They would rather see people out of work and businesses close than allow foreign workers to access jobs that are waiting for them here in the United States, even if that does irreparable harm to the economy of the nation and further shrinks our essential middle class.