Trump should ignore the business lobby and stick to immigration promises

As President Trump fulfills his campaign promises to crack down on illegal immigration and consider cuts in legal immigration, his critics responded that his policies will frustrate his promised goal of 3 percent economic growth. In just the last few weeks, establishment media organs have inundated us with headlines like “Opposition to immigration is at odds with economic growth” (Washington Post), “Tighter immigration controls could hurt Trump growth plans” (Atlanta Journal Constitution) and “Hardline on immigration threatens growth” (Wall Street Journal).

It is impossible to overstate how important growth is to economic and political stability in the industrial age in which we live, affecting the economy, in jobs, housing, wages and incomes. If growth required mass immigration, only extreme national security, environmental or cultural concerns would justify restriction.

{mosads}However, the conventional wisdom is wrong. Increasing population can indeed increase economic growth, but so does raising productivity to generate more goods and services within a given population. Furthermore, immigration is not the only way to increase population. For a few decades after World War II, U.S. population grew rapidly thanks to the “Baby Boom.” But the Boom eventually ended, and Americans began to limit the size of their families. The result was a decline in the native birthrate that, given time, would have meant a leveling off of the U.S. population.

That impending demographic slowdown set off alarm bells in corporate boardrooms across the country. With population growth slowing, the rising tide that had done so much to raise U.S. corporate growth and profits to record heights was projected to ebb.

The answer was obvious to corporate CEOs: mass immigration. A 1997 Wall Street Journal editorial bewailed the looming shortage of “warm bodies,” pointedly noting that “a drop in births can be compensated by immigration.” The Journal did its part by excoriating people like former Sen. Alan Simpson (R-Wyo.), who dared to suggest that immigration needed to be controlled, as “nativists” and “xenophobes.” The Journal’s editors declared repeatedly that “there should be open borders.” The national Chamber of Commerce and other big business lobbies began pressuring their GOP allies in Congress and collaborating with left-wing groups to undermine immigration law enforcement, pass amnesty for illegal aliens and increase immigration by all possible means.

But big business was hardly alone in being alarmed and energized by the looming shortage of workers and consumers. Big government was equally horrified. Why? Slowing economic growth would mean slowing tax revenues, less money for expanding government programs and favored interest groups, and even more importantly, less money to pay the growing cost of a fast-rising national debt. The Wall Street Journal noted that a 0.5 percent reduction in GDP growth reduces federal revenues by a staggering $1.36 trillion over a decade. As former Treasury Secretary  Lawrence Summers pointed out, “If we get the growth rate up, the debt problem will stay in control.”

Former President Clinton, campaigning for the Senate’s “Gang of Eight” amnesty bill in 2013, picked up the theme, saying that if Congress understood what the economic impact of the country’s declining fertility rate would be, they would pass the bill “because it’s the only way to keep our country growing.” In another post-Trump scare piece, the Journal laments that “an aging population, the physically demanding nature of many blue-collar jobs and the trend toward pursuing college degrees compound the labor shortage.” However, as Sen. Tom Cotton (R-Ark.) responded, “Higher wages for Americans are a feature, not a bug, of reducing levels of legal immigration!”

In addition to boosting wages, immigration restriction will lead to lower housing prices, safer neighborhoods and better schools. Trump also promised to reduce taxes and extend maternity leave for working mothers. All these policies will encourage Americans to have more children. 

Corporate America’s demand for growth through mass immigration is misguided. If Trump ignores the business lobby and sticks to his campaign promises, he can boost productivity to spur real economic growth, even with lower immigration.

Tom Tancredo served Colorado’s 6th congressional district from 1999 to 2009, where he chaired the bipartisan 100+ member Immigration Reform Caucus. KC McAlpin serves as the president of U.S. Inc, a conservative group working for immigration reform.

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