By Joe Light
To get a sense of the immigration crisis, look no further than Amazon.com. The company was the largest sponsor of H-1B work permits for skilled foreign workers over the past three years, and would likely hire far more if allowed. It's also chronically short of warehouse workers, and since 2022 has run a program to help refugees get work at the company.
Yet Amazon, like much of corporate America, would almost certainly face a backlash if it pushed for more immigration. Public opinion has hardened on undocumented immigrants. And more restrictions may be coming, regardless of whether Donald Trump or Kamala Harris prevail in the November election.
The consequences matter. The labor market, while softening, remains tight, with 1.2 job openings per unemployed person. Immigration, meanwhile, ranks as a top issue for voters. How it's handled by Trump or Harris, along with the next Congress, will impact the country's economic growth, labor markets, and the U.S. fiscal deficit -- none of it positively if immigration is curbed, according to nonpartisan forecasts.
What much of corporate America wants is clear: more work permits for immigrants and visas for their families. Wary of the optics, however, most companies are expressing this view through groups like the U.S. Chamber of Commerce, which has lobbied Congress to increase work permits for years. Amazon didn't respond to requests for comment about its stance on immigration policies.
Expanding the labor pool with immigrants helps companies because it gives them more choices of employees and allows them potentially to pay less. Academic studies have found that high immigration has the biggest impact on low-skilled workers. Studies also find that other immigrants bear the brunt of competition more than workers who are already well established in the country.
That's not to say there isn't downward wage pressure. Some economists have found that skilled workers brought in under programs like H-1B visas get paid less than peers already working in the country, leading tech firms to keep hiring workers from abroad even as they lay off other employees.
The short-term negatives are only half the picture. The broader macroeconomic effects of immigration tend to fuel consumption and economic growth and keep a lid on wage inflation, according to many economists.
That dynamic was evident over the past few years as the U.S. added five million people to the workforce through immigration, counting both documented and undocumented workers. The surge coincided with pandemic-induced labor shortages and a big economic rebound afterward. Inflation surged, but it would have been worse without immigration helping push down wage growth, according to Moody's Analytics chief economist Mark Zandi. Immigration "has been very costly to many communities across the country, but the timing of the surge...was very fortuitous from a macroeconomic perspective," he says.
The nonpartisan Congressional Budget Office sees net gains from recent immigration trends. The CBO estimates that from 2021 to 2026, 8.7 million more people will have entered the U.S. than it previously expected, with 65% of them "unlawfully present." The influx will boost nominal gross domestic product by $8.9 trillion from 2024 to 2034. And in 2034, real GDP will be 2.9% greater "because of the immigration surge, " the CBO said in a July report.
The CBO also estimates that the immigration surge will reduce deficits by $900 billion by 2034. Many migrants receive authorization to work, get jobs, and pay taxes; but in part because they aren't immediately eligible for some tax deductions and federal benefits, the net effect on the deficit is positive.
Much will depend on whether border policies keep tightening. The White House in September toughened an executive order that has made it nearly impossible for migrants to receive asylum outside of official ports of entry. The number of monthly encounters between border officials and migrants attempting to cross the southern border without authorization is down more than 76% since early 2023.
Scores of immigrants may also be forced to leave under some recent Biden administration policies. Partly to ease border pressures, the president expanded a humanitarian "parole" program that lets migrants from some countries work in the U.S. for up to two years. That has allowed hundreds of thousands of migrants from Haiti, Venezuela, and other countries to stay. However, the Department of Homeland Security in early October said the program won't be extended, potentially forcing many migrants to leave.
Trump wants a major crackdown. Along with spreading false rumors that Haitian migrants are eating pets, he has blamed immigrants for higher housing costs despite scant evidence that's the case nationally, and more evidence that building costs would be higher without influxes of workers from Latin America. He has said he dislikes more orderly pathways for foreign workers, like the H-1B visa program, which allows high-skilled workers to enter the country and potentially pursue permanent residency.
Trump has also promised to embark on "the largest deportation in the history of our country." Asked about the impact that would have on the economy, Trump said "I want a lot of people to come into our country but I want them to come in legally," speaking an event at the Economic Club of Chicago on Tuesday.
"President Trump's mass deportation of illegal immigrants will not only make our communities safer but will save Americans from footing the bill for years to come," said Republican National Committee spokesperson Taylor Rogers in a statement.
Harris' immigration policies would likely be a continuation of Biden's. She has lambasted Trump for killing a bipartisan border deal earlier this year and promised to revive it. The bill made fewer people eligible for asylum while increasing resources for asylum officers and border agents. It also increased the number of visas available for people to immigrate legally.
The Harris campaign referred Barron's to a speech the vice president made near the U.S.-Mexico border in which she vowed to keep the border closed outside of official ports of entry while creating a "path to citizenship for hardworking immigrants who have been here for years and deserve to have a system that works."
Companies are in a tough spot. Employers in sectors such as agriculture, construction, and education rely on immigrants for a growing percentage of their workforce. Yet many of these immigrants have temporary work permits that could be revoked over the coming years.
Silicon Valley is in a bind, too. While some tech leaders support Trump -- notably Tesla CEO Elon Musk -- much of the industry would be hurt by his immigration policies. Amazon, Alphabet, Microsoft, Meta Platforms, and Apple are among the top 10 sponsors of H-1B visas. Since 2005, the number of new H-1B visas, a main conduit for foreign tech workers, has been capped at 85,000 (though thousands more are granted in other industries and to universities).
In Trump's first term, denial rates for H-1Bs soared, reaching a peak of 24% in 2018. The White House also told immigration officials to end a policy that gave deference to the findings of previous visa petitions, making it harder for workers to get extensions. Biden revoked those orders, and the denial rate fell to 3.5% last year. In the last fiscal year, the U.S. issued more than 265,000 such visas, up from 180,000 in 2018.
Immigration attorneys say clients are rushing to get visa applications in, worried that Trump would seek another slowdown if re-elected. "The last Trump administration saw this invisible wall go up -- just constant policy changes that hindered the processing of applications," says Seattle immigration attorney Tahmina Watson.
Companies, meanwhile, risk political reprisals if they come out in favor of immigration. Tyson Foods, for instance, committed in 2022 to hire 2,500 migrants through a nonprofit called Tent Partnership for Refugees. That, in part, prompted America First Legal -- a Trump-affiliated group run by his advisor Stephen Miller -- to file federal employment complaints this year against Tyson, alleging "discrimination against American citizens."
Tyson said in a statement, "Any insinuation that we would cut American jobs to hire immigrant workers is completely false." The company added that it only hires immigrants legally authorized to work and doesn't discriminate against American citizens.
Other companies working with Tent include Amazon, Hilton Worldwide Holdings, and Blackstone. Marriott International tells Barron's it has hired more than 1,000 refugees in the U.S. toward a commitment with Tent to hire 1,500 by 2025. Tent said in March that it was 70% of the way to a goal of getting 22,725 refugees hired.
Corporate lobbying to expand immigration seems to be failing. For years, Congress hasn't budged on H-1B caps or loosened other visa quotas and requirements. "Our universities and domestic talent pipeline are not producing enough workers for the jobs of tomorrow," says Ebbie Yazdani, director of federal policy at TechNet, an industry group that has pushed Congress to raise immigration quotas and invest more in tech education.
The failure of the border bill in February illustrates how tough it may be to get anything through Congress. The deal increased resources for border agents and asylum processors -- measures that would have restricted crossings and ramped up deportations. It also included provisions to give faster work authorizations and 50,000 more employment- and family-based visas per year. Despite backing from business groups, it fizzled after Trump said it wasn't strong enough.
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October 16, 2024 00:01 ET (04:01 GMT)
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