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Dallas Fed Chief: Trump’s Immigration Crackdown Will Hurt Economy

 

Donald Trump’s immigration crackdown is hurting the economy, said Dallas Federal Reserve chief Robert Kaplanthis week while speaking at the Council on Foreign Relations. As he said:

[Millions of immigrants] are not going out and shopping, they are staying home, they are afraid if they go out they may not come home.

On the margin — and it’s too soon for the data to pick it up but you hear it anecdotally — I believe we are going to see it, I believe those people are more likely to save than to spend. And those two effects have some muting effect on consumer spending and therefore GDP growth…If we do things that limit sensible immigration, we’re likely to slow GDP.

A USA Today article covering Kaplan’s comments also quoted Moody’s Analytics chief economist Mark Zandi, who estimated that Trump’s crackdown on immigration could reduce net immigration by 250,000 annually, reducing total economic output by nearby $100 billion by 2021. Zandi noted that immigrants contribute to the workforce, are part of the economy, help boost consumption, and start businesses which create jobs.

Immigration policy and Trump’s economy

Trump himself takes advantage of immigrants in the economy when it suits him: his businesses have employed immigrants, Trump Winery (managed by Eric Trump) is seeking immigrant workers, and he’s taken credit for the relative health of the economy today (built in part by immigrants). But he continues to ignore how vital immigrants are to the economy. He’s deported business owners like Roberto Beristain, whose small business employed 20 workers. He’s encouraged policies like Texas’ SB 4, which was devastating to state economies when similar versions were enacted in Alabama and Arizona. And his mass deportations have made it harder for businesses to find much-needed workers.

Since Trump began his crackdown on immigrants, industries dependent on immigrant labor have made it clear that Trump’s hatred for immigrants is hurting their business, chasing away longtime workers, making it hard for them to find new employees, and damaging the economy. Dairy farmers in Wisconsin, chile farmers in New Mexico, growers in California, seasonal business owners in Cape Cod, and horse trainers in Kentucky have all said versions of what Kaplan did: immigrants contribute to the economy, and policies that chase them away are detrimental to all Americans. In contrast, immigration reform would have added $1.4 trillion to the economy over ten years.

Tourism is also facing severe economic impacts. Trump’s “policies are discouraging tourists and threatening the American travel business, experts say. One study forecasts a 10.6 million decline in visitors this year and next. The drop – nearly 7% of expected travelers – will cost the U.S. economy more than $18 billion and about 107,000 jobs, according to Tourism Economics, a forecasting firm used by the industry,” according to CNN.

Trump’s attacks on immigrants are insidious and dangerous. We’re seeing they’re literally very costly, too.