Trump immigration clampdown may threaten Americans’ jobs, wages, economists say

WASHINGTON (AFP) – The 20-year-old San Diego bakery Con Pane Rustic Breads & Cafe went out of business this month after an audit by United States (US) authorities found immigrants working there illegally.

In April 2019, a small Nebraska town lost a potato processing plant, and the local revenue it generated, in the wake of an immigration raid on its facilities. A restaurant in New York appears to have suffered similar fate last August.

Farmers said they are planting less, turning to automation, eliminating some crops, leaving them to rot in the field or contemplating selling out of the business altogether – all because they cannot find enough immigrant labour.

As the US birth rate is falling and a labour shortage is worsening, US President Donald Trump’s crackdown on immigrants could make the situation worse for businesses like these.

Trump and others who favour tighter immigration controls say low-skilled migrant workers compete for American jobs and drive down wages for all workers.

But a growing body of research suggests the contrary: that removing immigrant workers can be destructive, resulting in lost jobs, lower wages, cancelled investments and less affordable services – even for Americans.

About 7.6 million unauthorised migrants work in the US, amounting to 4.6 per cent of the labour force, according to the Pew Research Center, and the share is shrinking even as demand for workers is strong.

Honduran caravan members look through a fence at the US-Mexico border in San Ysidro, California in November 2018. PHOTO: AFP

Immigrants staff major industries like food processing, farming and hotels as well as small businesses such as restaurants and building contractors and provide sought-after services such as child care and cleaning. In 2016, an analysis by the National Academy of Sciences found there was “little evidence” that immigrants affected overall employment for the native-born. And Julie Hotchkiss, an economist at the Federal Reserve Bank of Atlanta, sifted through employer and wage records from the state of Georgia and found firms that hire unauthorised workers actually pay their legally authorised workers higher wages and stay in business longer.

“Paper after paper, I see a net positive impact from the presence of these workers,” she told AFP, stipulating that her views are her own.

Employment for US citizens actually fell by 0.7 per cent in communities where authorities deported a half million mainly Hispanic immigrants between 2008 and 2015, according to research published last December by economists at the Universities of Colorado and California.

Low-skilled immigrants often “complement” the skills of higher-skilled native-born and legally authorised workers – allowing businesses to thrive and employ more workers overall, they said.

An English-speaking restaurant host, for example, will lose her job if immigrant cooks and dishwashers flee and the restaurant closes.

A high-skilled construction contractor may be unable to complete a job without the low-skilled immigrant labour needed for preliminary demolition work. In Mexico, an ageing population and falling birthrates, among other factors, mean that US neighbour to the South country is no longer the largest source of migrants, Research Director at the Migration Policy Institute Randy Capps told AFP. Instead, new arrivals now come in large part from a smaller flow of Central Americans and include many asylum-seeking children and grandparents who are not of working age, he said.

“We’re not getting nearly the same labour supply from unauthorised migration that we got before the recession,” Capps said.

These changes in the migrant labor supply may be showing up in economic data.

For example, since 2018 the cost of gardening and lawn care – a service frequently performed by migrants – has risen between three and five times as fast as overall consumer inflation, according to Labor Department figures.

US employers frequently argue that Americans will not do some jobs that migrant workers will, like picking crabs or slaughtering animals in food plants.