1 00:00:02,360 --> 00:00:06,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:08,360 --> 00:00:10,920 Speaker 2: I'm Stephen Carol and this is Here is Why, where 3 00:00:10,960 --> 00:00:13,280 Speaker 2: we take one news story and explain it in just 4 00:00:13,320 --> 00:00:15,840 Speaker 2: a few minutes with our experts here at Bloomberg. 5 00:00:18,920 --> 00:00:23,080 Speaker 1: His claims for the mass deportations to me seem almost 6 00:00:23,120 --> 00:00:29,000 Speaker 1: logistically impossible, so we'll see what he actually accomplishes. Obviously, 7 00:00:29,360 --> 00:00:31,160 Speaker 1: getting rid of a lot of people will create a 8 00:00:31,200 --> 00:00:33,720 Speaker 1: lot more chaos than economic chaos. 9 00:00:33,760 --> 00:00:34,720 Speaker 2: If the breaks go on. 10 00:00:34,880 --> 00:00:38,280 Speaker 3: In terms of inward immigration, the break even employment growth 11 00:00:38,280 --> 00:00:40,360 Speaker 3: that keeps unemployment unchanged is. 12 00:00:40,360 --> 00:00:43,280 Speaker 2: Only one hundred thousand. So add that to your listen 13 00:00:43,320 --> 00:00:44,120 Speaker 2: of uncertainties. 14 00:00:44,240 --> 00:00:46,840 Speaker 3: And I think there's real concerns about being too strict 15 00:00:46,840 --> 00:00:49,720 Speaker 3: on immigration policy and possibly seeing net out migration, which 16 00:00:49,800 --> 00:00:51,479 Speaker 3: is something we haven't seen in my lifetime. 17 00:00:51,600 --> 00:00:55,280 Speaker 2: Immigrants have long been part of the economic success story 18 00:00:55,360 --> 00:00:58,880 Speaker 2: of the United States. Many economists and business leaders credit 19 00:00:59,040 --> 00:01:03,240 Speaker 2: immigration for filling vacancies across the economy, but Donald Trump 20 00:01:03,320 --> 00:01:06,360 Speaker 2: and many of his allies accuse immigrants of lowering wages 21 00:01:06,440 --> 00:01:10,480 Speaker 2: and taking jobs from native born Americans. He's begged to 22 00:01:10,480 --> 00:01:13,520 Speaker 2: crack down on illegal immigration and carry out the biggest 23 00:01:13,520 --> 00:01:18,640 Speaker 2: deportation plan in US history. What would that mean for growth, inflation, 24 00:01:19,000 --> 00:01:23,840 Speaker 2: and employment. Here's why immigration policy matters so much for 25 00:01:23,920 --> 00:01:30,280 Speaker 2: the US economy. Our senior editor, Derek Wallbank joins me 26 00:01:30,360 --> 00:01:33,320 Speaker 2: now for more. Derek, first of all, what does the 27 00:01:33,440 --> 00:01:37,080 Speaker 2: data tell us about the economic effect that immigration has 28 00:01:37,120 --> 00:01:38,399 Speaker 2: had on the US economy. 29 00:01:38,560 --> 00:01:42,520 Speaker 3: Immigration has a profound effect on the United States economy. 30 00:01:43,040 --> 00:01:45,399 Speaker 3: Just to put into context, is about one in five 31 00:01:45,560 --> 00:01:48,920 Speaker 3: US workers as an immigrant. And immigrants lead some of 32 00:01:48,960 --> 00:01:51,280 Speaker 3: the biggest companies in the United States, Right if you 33 00:01:51,280 --> 00:01:53,840 Speaker 3: think of Microsoft and such in Adela. If you think 34 00:01:53,880 --> 00:01:57,640 Speaker 3: of Nvidia and Jensen Huang, I mean the most famous 35 00:01:57,640 --> 00:02:01,760 Speaker 3: one obviously, right Elon musk Esla and SpaceX and many 36 00:02:01,800 --> 00:02:05,800 Speaker 3: other things. So immigrants have a very very profound effect 37 00:02:05,800 --> 00:02:11,359 Speaker 3: on the economy. Generally speaking, economists cy immigration as economically 38 00:02:11,400 --> 00:02:14,760 Speaker 3: positive in the US. The FED has cited immigration as 39 00:02:14,840 --> 00:02:18,080 Speaker 3: part of the reason the US economy has beat expectations. 40 00:02:18,520 --> 00:02:22,480 Speaker 3: The Congressional Budget officees immigration is increasing federal revenue more 41 00:02:22,520 --> 00:02:25,400 Speaker 3: than it increased costs, so it's a net benefit there. 42 00:02:25,720 --> 00:02:28,639 Speaker 3: And if you're looking sort of on a fully macro level. 43 00:02:29,000 --> 00:02:32,080 Speaker 3: The late Singaporean leader Le Kwan Yu used to say 44 00:02:32,160 --> 00:02:36,520 Speaker 3: that immigration is one of the United States's secret weapons economically, 45 00:02:36,639 --> 00:02:40,000 Speaker 3: because it could attract the best from all over the 46 00:02:40,040 --> 00:02:44,000 Speaker 3: world and instantly make them Americans and have them contribute 47 00:02:44,040 --> 00:02:45,160 Speaker 3: to the American economy. 48 00:02:45,560 --> 00:02:49,040 Speaker 2: Of course, there's distinction here too, between legal immigration and 49 00:02:49,080 --> 00:02:51,160 Speaker 2: some of those that you mentioned there who made their 50 00:02:51,200 --> 00:02:54,880 Speaker 2: path to the US via llegal means an illegal immigration, 51 00:02:54,960 --> 00:02:57,440 Speaker 2: which was talked about in a very different way during 52 00:02:57,480 --> 00:02:59,880 Speaker 2: the election campaign. What do we know about the effects 53 00:03:00,160 --> 00:03:01,799 Speaker 2: illegal immigration has. 54 00:03:02,040 --> 00:03:05,760 Speaker 3: It's a subject of let's say some considerable dispute. Let 55 00:03:05,800 --> 00:03:08,480 Speaker 3: me back up a quick second and put illegal immigration 56 00:03:08,600 --> 00:03:12,040 Speaker 3: into two camps. The first one is those people who 57 00:03:12,280 --> 00:03:16,560 Speaker 3: entered illegally, you know, come through the southern border. Another way, though, 58 00:03:16,960 --> 00:03:19,640 Speaker 3: is to come in on a fully legal and operational 59 00:03:19,720 --> 00:03:24,080 Speaker 3: visa and then overstay the visa, simply just not go home. 60 00:03:24,200 --> 00:03:27,399 Speaker 3: Both of those are present when we're talking there. It's 61 00:03:27,600 --> 00:03:31,120 Speaker 3: a lot easier to stop the first than the second. 62 00:03:31,400 --> 00:03:34,600 Speaker 3: It's hard to know about how many people were talking here. 63 00:03:34,639 --> 00:03:38,440 Speaker 3: There was an estimate pegging at about eleven million individuals 64 00:03:38,480 --> 00:03:42,160 Speaker 3: as of twenty twenty two. Of those, though, about eight 65 00:03:42,360 --> 00:03:44,840 Speaker 3: million are in the labor force and have a job 66 00:03:45,000 --> 00:03:47,960 Speaker 3: of some kind. Now, that number may actually be low 67 00:03:48,120 --> 00:03:51,720 Speaker 3: because it may have increased in the recent post COVID 68 00:03:51,800 --> 00:03:55,040 Speaker 3: spikes in terms of encounters at the US southern border. 69 00:03:55,080 --> 00:03:57,320 Speaker 3: You know, there's been a documented increase of people trying 70 00:03:57,320 --> 00:03:59,400 Speaker 3: to come in over the last couple of years, So 71 00:03:59,440 --> 00:04:01,240 Speaker 3: that number actually be low. 72 00:04:01,840 --> 00:04:04,840 Speaker 2: If Donald Trump were to carry out his promise of 73 00:04:05,200 --> 00:04:08,840 Speaker 2: mass deportation, what would that mean for growth or for 74 00:04:09,120 --> 00:04:10,360 Speaker 2: inflation in the US? 75 00:04:10,760 --> 00:04:13,320 Speaker 3: Well, look, I think a lot of that is down 76 00:04:13,400 --> 00:04:16,680 Speaker 3: to how much there might actually be in terms of 77 00:04:16,720 --> 00:04:19,440 Speaker 3: an action. If you were to try and take this 78 00:04:19,560 --> 00:04:22,240 Speaker 3: at the most maximal level, and you said I'm going 79 00:04:22,279 --> 00:04:25,680 Speaker 3: to try and deport all eleven million or more people 80 00:04:25,760 --> 00:04:29,159 Speaker 3: in one swift action, you know, just do those numbers 81 00:04:29,240 --> 00:04:32,600 Speaker 3: in reverse. Imagine eight million or more people out of 82 00:04:32,600 --> 00:04:36,880 Speaker 3: the labor force immediately, Jobs lost. Even if the argument 83 00:04:37,080 --> 00:04:40,480 Speaker 3: is that removing illegal immigration is going to allow more 84 00:04:40,520 --> 00:04:43,159 Speaker 3: Americans to take jobs that other people are taking. Even 85 00:04:43,200 --> 00:04:46,240 Speaker 3: if that's the argument, there's simply not quite a way 86 00:04:46,320 --> 00:04:50,760 Speaker 3: to replace eight million people or more in the labor force. 87 00:04:51,040 --> 00:04:54,599 Speaker 3: So that's one part. Even though a smaller retraction in 88 00:04:54,600 --> 00:04:59,039 Speaker 3: the job force would have meaningful effects. That having been said, though, 89 00:04:59,080 --> 00:05:01,640 Speaker 3: we are hearing from a fair number of Trump supporting 90 00:05:01,640 --> 00:05:05,120 Speaker 3: Republicans who have suggested that anything would go in a 91 00:05:05,160 --> 00:05:07,960 Speaker 3: certain amount of phases, and that you would start off 92 00:05:08,400 --> 00:05:12,680 Speaker 3: with most obvious candidates people who have had criminal offenses, 93 00:05:13,040 --> 00:05:15,960 Speaker 3: so more limited action like that wouldn't have such a 94 00:05:16,000 --> 00:05:19,080 Speaker 3: mass effect, and indeed proponents would argue that deporting those 95 00:05:19,120 --> 00:05:23,719 Speaker 3: individuals would have a benefit both economically and also societally. 96 00:05:24,160 --> 00:05:27,440 Speaker 2: What do businesses want on this issue. 97 00:05:27,000 --> 00:05:29,440 Speaker 3: Well, this is an interesting one. If you take a 98 00:05:29,560 --> 00:05:34,120 Speaker 3: chamber of commerce view. Chambers of commerce representing the largest 99 00:05:34,160 --> 00:05:38,040 Speaker 3: businesses across the US, tend to want to have a 100 00:05:38,160 --> 00:05:42,480 Speaker 3: full pool of immigrant labor from which to pick from. Indeed, 101 00:05:42,800 --> 00:05:46,120 Speaker 3: many of them would like a lot more easing to 102 00:05:46,200 --> 00:05:49,560 Speaker 3: be able to have more individuals. This is actually, though, 103 00:05:49,600 --> 00:05:54,479 Speaker 3: playing out as a debate within Republican circles. So Elon 104 00:05:54,640 --> 00:05:58,320 Speaker 3: Musk is one who thinks that there are great benefit 105 00:05:58,400 --> 00:06:03,240 Speaker 3: to having H one B visas available in good abundant numbers. 106 00:06:03,279 --> 00:06:06,080 Speaker 3: These are the ones that are used by highly educated, 107 00:06:06,160 --> 00:06:10,160 Speaker 3: often tech workers, many from Indias and from China. At 108 00:06:10,160 --> 00:06:13,000 Speaker 3: the same time, you have people who have been with 109 00:06:13,120 --> 00:06:15,920 Speaker 3: Donald Trump for a very long time. Steve Bannon is 110 00:06:15,960 --> 00:06:19,480 Speaker 3: one immigration hawks who think that this is a program 111 00:06:19,520 --> 00:06:22,719 Speaker 3: that needs to be pulled down and that Musk's views 112 00:06:22,720 --> 00:06:25,520 Speaker 3: on this are indeed dangerous. So there is a big 113 00:06:25,600 --> 00:06:29,720 Speaker 3: split within Trump's own orbit. Trump right now is leaning 114 00:06:29,839 --> 00:06:33,159 Speaker 3: a little bit toward Musk on some of the skilled 115 00:06:33,240 --> 00:06:37,880 Speaker 3: immigration stuff, even as he's talking about big deportation plans. 116 00:06:37,920 --> 00:06:40,919 Speaker 3: On skilled immigration, he has talked about the need to 117 00:06:41,000 --> 00:06:44,800 Speaker 3: attract the best and brightest and bemoaned the idea that 118 00:06:44,839 --> 00:06:48,600 Speaker 3: there are a large number of international students to American 119 00:06:48,720 --> 00:06:51,640 Speaker 3: universities who will get an American education and then not 120 00:06:51,720 --> 00:06:54,479 Speaker 3: be able to stay. Trump would like to find ways 121 00:06:54,520 --> 00:06:55,479 Speaker 3: to have them stay. 122 00:06:55,720 --> 00:06:57,960 Speaker 2: Immigration is a big postical issue in many parts of 123 00:06:58,000 --> 00:07:01,160 Speaker 2: the world. Is the same sort of debate playing out 124 00:07:01,200 --> 00:07:02,200 Speaker 2: in other countries? 125 00:07:02,600 --> 00:07:05,479 Speaker 3: You know, that's a great question, it is, and indeed 126 00:07:05,800 --> 00:07:09,840 Speaker 3: we see this playing out in pretty much every advanced 127 00:07:09,880 --> 00:07:14,480 Speaker 3: economy that is a reception zone for immigration at scale, 128 00:07:15,000 --> 00:07:17,960 Speaker 3: famously the United Kingdom and Brexit. What more needs to 129 00:07:17,960 --> 00:07:20,480 Speaker 3: be said, immigration was at the absolute heart of that. 130 00:07:21,160 --> 00:07:24,480 Speaker 3: Even here in Singapore, though I mentioned, it's become a 131 00:07:24,520 --> 00:07:30,200 Speaker 3: flashpoint politically, very well educated city state that had received 132 00:07:30,280 --> 00:07:33,560 Speaker 3: a lot of immigrants coming in who had been working 133 00:07:33,600 --> 00:07:37,120 Speaker 3: in Hong Kong when that city was having difficulties after COVID. 134 00:07:37,560 --> 00:07:40,880 Speaker 3: But Singapore is in a position where it doesn't feel 135 00:07:40,920 --> 00:07:42,760 Speaker 3: like it could take in all of those Even if 136 00:07:42,800 --> 00:07:46,360 Speaker 3: you said the five hundred thousand or the million best 137 00:07:46,400 --> 00:07:50,960 Speaker 3: people from Hong Kong economically would come to Singapore, Singapore 138 00:07:51,280 --> 00:07:53,840 Speaker 3: is a city state of six million people, doesn't have 139 00:07:53,960 --> 00:07:56,400 Speaker 3: enough space to house them, doesn't have enough schools to 140 00:07:56,560 --> 00:07:59,960 Speaker 3: educate them. The transportation system wouldn't be able to handle 141 00:08:00,240 --> 00:08:03,240 Speaker 3: the load all of these sorts of things. So I 142 00:08:03,360 --> 00:08:06,920 Speaker 3: do think that anywhere that you go, you do find 143 00:08:06,960 --> 00:08:11,040 Speaker 3: these questions about immigration that are percolating. And look, it 144 00:08:11,240 --> 00:08:15,400 Speaker 3: is an issue in elections all over the world. It's 145 00:08:15,440 --> 00:08:18,720 Speaker 3: going to be an issue in the upcoming Singaporean election. 146 00:08:18,960 --> 00:08:21,560 Speaker 3: It's going to be an issue when Australian voters go 147 00:08:21,560 --> 00:08:23,760 Speaker 3: to the polls. It'll be an issue in Canada when 148 00:08:23,800 --> 00:08:27,239 Speaker 3: those voters go to the polls. So the United States 149 00:08:27,360 --> 00:08:30,600 Speaker 3: is very much not alone. The issues you're seeing in 150 00:08:30,640 --> 00:08:35,760 Speaker 3: the US around immigration are at play in every single 151 00:08:35,880 --> 00:08:38,000 Speaker 3: major economy around the world. 152 00:08:38,160 --> 00:08:40,800 Speaker 2: Okay, dark Well, bind Karsenior editor, thank you very much 153 00:08:41,920 --> 00:08:44,480 Speaker 2: for more explanations like this from our team of twenty 154 00:08:44,559 --> 00:08:47,559 Speaker 2: nine hundred journalists and analysts around the world search for 155 00:08:47,640 --> 00:08:50,840 Speaker 2: quick take on the Bloomberg website or Bloomberg Business App. 156 00:08:52,520 --> 00:08:55,400 Speaker 2: I'm Stephen Carol. This is here's why. I'll be back 157 00:08:55,440 --> 00:08:57,280 Speaker 2: next week with more. Thanks for listening.