For the past 20 years, American politicians have mostly debated illegal immigration to the United States. But inside the Donald Trump administration, there appear to be discussions that go much further. A draft memo is raising the idea of a broad crackdown on the legal employment of foreign-born workers.
Jeff Sessions, Trump’s nominee to serve as attorney general and guru on immigration policy, and senior adviser Steve Bannon have both been longtime restrictionists across all categories of migration, so this isn’t entirely surprising. And the possible moves being circulated in a draft memo reported by the Washington Post and published last week by Vox aren’t that extreme, for the simple reason that without an act of Congress there isn’t that much Trump can do to alter the legal immigration system. But Trump does have some discretion in this area, and he could use it to broadly crack down on the employment of foreign-born workers in the United States.
If Trump acts on these ideas, he is likely to encounter tension with segments of the business community, and overwhelmingly likely to harm economic growth and lower incomes for native-born Americans.
A broad crackdown on guest workers
The order, titled “Protecting American Jobs and Workers by Strengthening the Integrity of Foreign Worker Visa Programs,” proposes taking aim at a range of nonimmigrant visa programs that let foreign-born people live and work in the United States for a limited span of time.
- One provision would shorten the span of time a foreigner is allowed to work in the United States under the Optional Practical Training rule. OPT allows a foreigner who had a student visa to work for a limited amount of time in the United States after graduation. The Obama administration expanded the OPT window from 12 months to 17 months.
- Two provisions deal with H-1B visas that allow companies to hire foreign-born guest workers with technical skills. Obama acted to give the spouses of H-1B holders permission to work, thus de facto expanding the foreign-born skilled workforce through the back door. Trump will reverse that. The order would direct agencies to “consider ways” to alter the way the program works to “ensure that beneficiaries of the program are the best and the brightest.” This likely means trying to ensure that H-1Bs largely go to America’s best-known and highest paying tech companies, rather than, as is frequently the case today, serving to help companies that mostly do back-office outsourcing work.
- Another provision would call for a Department of Homeland Security crackdown on L-1 visas, featuring “site visits.” L-1s are designed to allow companies to transfer foreign-born managers to oversee US-based operations, but in a practical sense serve a similar role to H-1Bs in generally allowing for skilled temporary workers.
- Another provision targets the J-1 Summer Work Travel Program, which largely brings foreign workers to do seasonal retail work in beach towns and other communities that see a summertime influx. It’s not clear that Trump really can do much of anything here, but the order directs the State Department to “improve protections of US workers.”
- Other even vaguer provisions direct DHS to “improve monitoring of foreign students” and “clarify comprehensively” that visitors on tourist visas aren’t allowed to work in the United States.
It’s noteworthy that the draft does not target two of the largest guest-worker visa categories, neither the H-2A visa for seasonal agricultural workers or the H-2B visa for seasonal nonagricultural workers. Perhaps by coincidence, Trump uses H-2B workers at Mar-a-Lago and H-2A workers at Trump Vineyard.
This is bad news for the economy
Immigration is a hot-button political issue, so it’s easy to get the impression that economic research is sharply divided over the impact of immigration as well.
This is fairly misleading. As David Bier pointed out in a 2015 paper for the Niskanen Center, “a healthy debate exists over the effect of lesser-skilled immigration on lesser-skilled native workers, but the effects of immigration overall are positive, even according to estimates from economists who are most critical of lesser-skilled migration.” Thus, even Harvard economist George Borjas — a strong critic of immigration and far-and-away the economist most likely to be cited by immigration restrictionists — finds that immigration of unskilled workers has a small positive impact on the income of the average American worker.
Programs targeting skilled workers, like the ones identified in the memo, are even more clearly beneficial. Proponents of programs like H-1B claim virtually magic properties for them. Skeptics argue, plausibly, that this is overhyped. But their counterarguments involve arguing, as Ross Eikenberry does at the Economic Policy Institute, that “H-1B visas do not create jobs or improve conditions for US workers.” This criticism, based on careful, methodologically rigorous, firm-based analysis, shows that while companies that win H-1B lottery slots do hire more people, that’s because “new H-1Bs substantially and statistically significantly crowd out median employment of other workers.”
If you believe this study, however, you’re still left with the fact that H-1Bs don’t reduce the employment of native-born technology workers. But they do increase government tax revenue and raise the demand for skilled and unskilled labor in the larger community.
If he signs the memo, the overall scale of the Trump impact on legal work visa issuance is difficult to ascertain at this point. The order is vague in a number of ways, and, as we’ve learned over the past 10 days, the Trump administration is often open to interpreting and then reinterpreting its own orders after they’ve been issued. But directionally speaking, the evidence is overwhelming that making it harder for foreign-born people to obtain work visas will reduce average income for Americans.