Amazon.com (AMZN 0.78%) is a great place to learn about the immigration problem. In the past three years, the company brought in the most skilled foreign workers with H-1B work permits. If they were allowed to, they would probably hire many more people. Also, it always needs more warehouse workers. Since 2022, it has had a scheme to help refugees get jobs at the company.
But Amazon, like a lot of big businesses in the US, would almost certainly get in trouble if it pushed for more immigrants. People’s views on undocumented foreigners have become more negative. No matter who wins the election in November—Trump or Harris—there may be more restrictions on the future.
The results are important. Even though the work market is getting looser, there are still 1.2 job openings for every unemployed person. For lawmakers, immigration is one of the most important issues. Forecasts from both parties say that whether Trump or Harris handles immigration will have an effect on the economy, the job market, and the U.S. debt, but none of these effects will be good if immigration is limited.
It’s clear what a lot of business people in the US want: more work permits and visas for foreigners’ families. But because they don’t want to look bad, most businesses are speaking out against this through groups like the U.S. Chamber of Commerce, which has been pushing Congress for years to increase work permits. Amazon didn’t answer when asked to say what it thought about immigration laws.
Adding foreigners to the work force helps businesses because it gives them more options for workers and might even let them pay less. Studies have shown that workers with few skills are most affected by high immigration. Studies also show that workers who are new to the country are more likely to be affected by competition than workers who have lived in the country for a long time.
That doesn’t mean there isn’t pressure on wages to go down. Some experts have found that skilled workers who come to the U.S. on programs like H-1B visas are paid less than skilled workers who already work in the U.S. This is why tech companies keep hiring people from other countries even as they lay off other workers.
Only half of the picture is made up of the short-term bad things. Most analysts agree that immigration has positive effects on the economy as a whole. These effects tend to boost spending and growth while keeping wage inflation in check.
In the last few years, immigration has brought five million people to work in the U.S., including both legal and illegal workers. This trend has been clear. There were labour shortages during the boom because of the pandemic, and the economy got better quickly afterward. Moody’s Analytics chief economist Mark Zandi says that even though inflation rose, it would have been worse if immigration hadn’t slowed wage growth. He says that immigration “has been very costly to many communities across the country, but the timing of the surge…was very fortunate from a macroeconomic point of view.”
The nonpartisan Congressional Budget Office thinks that recent changes in immigration have led to net wins. The CBO thinks that 8.7 million more people will have come into the U.S. between 2021 and 2026 than they thought before. Of these, 65% will be “illegally present.” The extra money will add $8.9 trillion to the nominal GDP from 2024 to 2034. The CBO said in a July study that the rise in immigration will cause the real GDP to grow by 2.9% in 2034.
The CBO also thinks that the rise in immigration will cut debt by $900 billion by 2034. The net effect on the deficit is positive because many migrants are allowed to work, get jobs, and pay taxes. This is because they aren’t instantly eligible for some tax breaks and federal benefits.
Getting people out of work
It is expected that immigration will help the economy grow over the next ten years.
A lot will depend on how tight the border rules stay. In September, the White House made an executive order stricter, which makes it almost impossible for refugees to get asylum outside of official entry points. Since the beginning of 2023, the number of monthly encounters between border agents and people trying to cross the southern border without permission has dropped by more than 76%.
New policies from the Biden government may also force a lot of immigrants to leave. The president increased a “parole” program that lets people from some countries work in the U.S. for up to two years. This was done in part to ease the strain on the border. That has made it possible for hundreds of thousands of people from Haiti, Venezuela, and other places to stay. But in early October, the Department of Homeland Security said the program would not be continued. This could mean that many migrants have to leave.
Trump wants to crack down hard. He has also spread false rumours that Haitian immigrants are eating pets and blamed immigrants for higher living costs, even though there isn’t much evidence that this is true across the country and more evidence that building costs would be higher without workers coming from Latin America. He has said that he doesn’t like more organised ways for foreign workers to come to the U.S., such as the H-1B visa program, which lets skilled workers enter the country and possibly become permanent residents.
Trump has also said that he will start “the largest deportation in the history of our country.” When asked what that would mean for the business, Trump said, “I want a lot of people to come into our country, but I want them to come in legally.” He said this at an event on Tuesday at the Economic Club of Chicago.
A spokesman for the Republican National Committee, Taylor Rogers, said in a statement, “President Trump’s plan to deport a lot of illegal immigrants will not only make our communities safer, but it will also save Americans money for years to come.”
It’s possible that Harris’s immigration policies would stay the same as Biden’s. She criticised Trump for killing a deal between Democrats and Republicans on the border earlier this year and promised to bring it back. The bill limited the number of people who could get asylum while giving more resources to border and asylum police. It also made more visas available so that people could officially come to the U.S.
Barron’s was sent to a speech that Harris gave near the U.S.-Mexico border in which she promised to keep the border closed except at official ports of entry and make a “path to citizenship for hard-working immigrants who have been here for years and deserve to have a system that works.”
Business people are having a hard time. Immigration is becoming more and more important to businesses in fields like agriculture, building, and education. Still, a lot of these foreigners only have temporary work permits that could be taken away in the next few years.
Silicon Valley also has a problem. Some tech leaders, like Elon Musk, CEO of Tesla (TSLA -0.09%), back Trump. But his immigration policies would hurt most of the tech industry. Google (GOOGL) (0.30%), Microsoft (MSFT) (0.35%), Meta Platforms (META -0.08%), and Apple (AAPL) (1.23%) are some of the top 10 companies that support H-1B visas. New H-1B visas, which are a main way for foreign tech workers to come to the U.S., have been limited to 85,000 since 2005. However, thousands more are given to universities and other businesses.
During Trump’s first term, the number of H-1B visas denied rose sharply, hitting a high point of 24% in 2018. It was also told by the White House that immigration officials should stop a policy that relied on previous visa case decisions. This made it harder for workers to get extensions. Biden took back those orders, and last year the rejection rate dropped to 3.5%. More than 265,000 of these visas were given out by the U.S. in the last fiscal year, up from 180,000 in 2018.
Immigration lawyers say their clients are in a hurry to send in their visa applications because they are afraid that Trump will try to slow things down again if he wins again. Tahmina Watson, an immigration lawyer in Seattle, says, “During the last Trump administration, this invisible wall went up. It was made up of constant policy changes that made it harder to process applications.”
For their part, companies that support immigration run the chance of being punished by the government. Tyson Foods TSN 0.37% promised to hire 2,500 migrants through a charity called Tent Partnership for Refugees in 2022. That’s one reason why America First Legal, a group connected to Trump and led by Trump’s advisor Stephen Miller, filed federal job complaints against Tyson this year, saying he was “discriminating against American citizens.”
Tyson said in a statement, “It is not true at all that we would cut American jobs to hire immigrant workers.” The company also said that it doesn’t bias against American citizens and only hires immigrants who are legally allowed to work.
Amazon, Hilton Worldwide Holdings HLT 0.14%, and Blackstone are some of the other companies that work with Tent. The company has hired more than 1,000 refugees in the U.S. as part of a deal with Tent to hire 1,500 by 2025, according to Barron’s. Tent said in March that it was 70% of the way to its goal of hiring 22,725 refugees.
It looks like business efforts to increase immigrants are not working. Congress hasn’t changed the limits on H-1B visas or other visa standards and quotas for years. According to Ebbie Yazdani, head of federal policy at TechNet, our universities and domestic talent pipeline are not producing enough workers for the jobs of tomorrow. TechNet is an industry group that has pushed Congress to increase immigration limits and put more money into tech education.
It may be hard to get anything through Congress, as shown by the border bill that failed in February. The deal gave more money to border agents and people who handle asylum claims, which would have limited crossings and increased deportations. It also had parts that would speed up the process of getting work permits and add 50,000 more work and family-based visas each year. Even though business groups backed it, it didn’t work out because Trump said it wasn’t strong enough.
Now there is a race to set rules before Trump might run for a second term. The DHS under Biden is working on a rule that would make it easier for skilled workers to get visas and give them more options. A lobbying group called Compete America, which is made up of Amazon and Apple, is pushing Homeland Security Secretary Alejandro Mayorkas to finish it. In a September letter, they said that the rule, “if left unfinished, could serve as a vehicle for implementing policy changes other than those that were originally intended by this administration.”
It might be hard for Trump to keep his word to deport 11 million people who came to the U.S. illegally. Executive orders could take away protections that let many undocumented immigrants stay in the country, but Jack Malde, associate head of the Bipartisan Policy Centre, a think tank, says that Congress would have to pay for deporting so many people. “It’s very hard to do logistically without a lot of extra help,” he says.
People who support immigration hope that a consensus immigration deal will be brought back to life if Trump loses. The previous bill would have made limits official, but it would also raise limits on visas, especially for skilled workers, which is something that both Republicans and Democrats want.
There are lobbyists who think that the push from business will soon pay off. Vice President for Immigration Policy at the U.S. Chamber of Commerce Jon Baselice says, “We’re slowly getting to that point where the cost of doing nothing will be higher than the cost of doing something.” That’s when things will finally start to change.
It looks like even more rules will be put in place no matter who wins the next election. A study by Barclays found that if Biden’s current policies are kept up until 2025, job growth will slow by 60,000 per month and yearly GDP growth will drop from 2.6% to 2.1%. Barclays says that job growth would slow by 120,000 and GDP would drop to 1.7% if immigration went back to where it was during Trump’s first term, from 2017 to 2018. The industry could be hurt either way.
