The elephant in the room: will Trump fulfill his immigration policy in its totality? According to his website, this is a big ‘YES’. Of course, there is always room for speculation, and Trump’s recent speeches have been mired in ambiguity. I suppose, in part, this is part of the Trump strategy. Make it fun, make it easy, make it controversial.
Most of us intellectuals thought it was political suicide. Moody’s economic model made a clear prediction that Clinton would win 332 electoral votes. Trump’s uncanny ability to manipulate the media, control social discourse, and, as of recently, coerce companies to take ‘favorable’ actions remains ideological blasphemy to free marketers. Protectionism is the new trend. Welcome to 2016.
To be fair to Trump’s advocacy, the infrastructure is present to initiate such tasks. Between 2009 and 2015, the Obama administration deported over 2.5 million undocumented immigrants. And while Obama has assured the American public that these deportations have only affected criminals, nearly 41% of the deportations in 2015 were attributed to non-criminal immigration violators. Furthermore, Obama’s programs, such as Deferred Action for Childhood Arrivals Program (DACA) could be unilaterally overturned by a single executive order. In fact, most of the policies instituted by President Obama, such as the Federal waiver system, could be used by President Trump to locate and deport undocumented immigrants, without the express permission of Congress.
The question now lies not in the political feasible (that argument died with Clinton in the election), but in the economic impact. There are two key sides to this story.
The Free Marketers
In theory, and in application, free market theory has dominated the Republican Party since the Reagan era, and in rhetoric, continues to do so. As such, most free marketers would make a point that deporting illegal immigrants would contract the economy, as the labour force would significantly shrink --- this is empirically predicted, as reports indicate that reducing illegal immigration by about a third would decrease the GDP by 0.14%. Of course, there are questions in the modeling of such predictions --- does the model account for shifts in market supply? Does this model accurately assume that Americans would not take these lower end jobs? Simply put, there is little direct empirical evidence proving that illegal immigrants drastically affect the economy, in any meaningful way --- especially considering Trump’s new policy is only to deport 3 million, not 11 million. However, if in theory this does contract the labour market the consequences could be more dire than evidence suggests --- while initial studies only show the decrease in GDP by 0.14% as a result of deportations, if Trump were to both eliminate America’s cheap labor force AND institute trade tariffs, a combination of a reduced disposable income, decreased exports, and reduced productivity could cripple American economic growth, causing a 10% increase in unemployment in the manufacturing and construction sectors. Worse, if Trump were to combine these ideas with a default on treasury bonds to reduce debt, the US could face the worst economic crisis since the Great Depression.
In contrast to neoliberal theory, protectionism seeks to maintain the status of labour, i.e. the already prevalent workforce. For immigration, protectionists point out that illegal immigrants cost the US, on net, over $113 billion per year in maintaining a strained social safety net. While conflict reports have been published, protectionists would be correct in claiming that most academia supports their conclusion; a meta-analysis on 29 reports from the Congressional Budget Office did show that undocumented immigrants yield a net expense to the American economy. Protectionists would further point out that the traditional policy of amnesty would cost a total of $6.3 trillion over the course of one generation, largely because of the burden of the social safety net.
We have yet to see.
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