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Speaker 2: I'm Stephen Carol and this is Here is Why, where
Speaker 2: we take one news story and explain it in just
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Speaker 1: His claims for the mass deportations to me seem almost
Speaker 1: logistically impossible, so we'll see what he actually accomplishes. Obviously,
Speaker 1: getting rid of a lot of people will create a
Speaker 1: lot more chaos than economic chaos.
Speaker 2: If the breaks go on.
Speaker 3: In terms of inward immigration, the break even employment growth
Speaker 3: that keeps unemployment unchanged is.
Speaker 2: Only one hundred thousand. So add that to your listen
Speaker 2: of uncertainties.
Speaker 3: And I think there's real concerns about being too strict
Speaker 3: on immigration policy and possibly seeing net out migration, which
Speaker 3: is something we haven't seen in my lifetime.
Speaker 2: Immigrants have long been part of the economic success story
Speaker 2: of the United States. Many economists and business leaders credit
Speaker 2: immigration for filling vacancies across the economy, but Donald Trump
Speaker 2: and many of his allies accuse immigrants of lowering wages
Speaker 2: and taking jobs from native born Americans. He's begged to
Speaker 2: crack down on illegal immigration and carry out the biggest
Speaker 2: deportation plan in US history. What would that mean for growth, inflation,
Speaker 2: and employment. Here's why immigration policy matters so much for
Speaker 2: the US economy. Our senior editor, Derek Wallbank joins me
Speaker 2: now for more. Derek, first of all, what does the
Speaker 2: data tell us about the economic effect that immigration has
Speaker 2: had on the US economy.
Speaker 3: Immigration has a profound effect on the United States economy.
Speaker 3: Just to put into context, is about one in five
Speaker 3: US workers as an immigrant. And immigrants lead some of
Speaker 3: the biggest companies in the United States, Right if you
Speaker 3: think of Microsoft and such in Adela. If you think
Speaker 3: of Nvidia and Jensen Huang, I mean the most famous
Speaker 3: one obviously, right Elon musk Esla and SpaceX and many
Speaker 3: other things. So immigrants have a very very profound effect
Speaker 3: on the economy. Generally speaking, economists cy immigration as economically
Speaker 3: positive in the US. The FED has cited immigration as
Speaker 3: part of the reason the US economy has beat expectations.
Speaker 3: The Congressional Budget officees immigration is increasing federal revenue more
Speaker 3: than it increased costs, so it's a net benefit there.
Speaker 3: And if you're looking sort of on a fully macro level.
Speaker 3: The late Singaporean leader Le Kwan Yu used to say
Speaker 3: that immigration is one of the United States's secret weapons economically,
Speaker 3: because it could attract the best from all over the
Speaker 3: world and instantly make them Americans and have them contribute
Speaker 3: to the American economy.
Speaker 2: Of course, there's distinction here too, between legal immigration and
Speaker 2: some of those that you mentioned there who made their
Speaker 2: path to the US via llegal means an illegal immigration,
Speaker 2: which was talked about in a very different way during
Speaker 2: the election campaign. What do we know about the effects
Speaker 2: illegal immigration has.
Speaker 3: It's a subject of let's say some considerable dispute. Let
Speaker 3: me back up a quick second and put illegal immigration
Speaker 3: into two camps. The first one is those people who
Speaker 3: entered illegally, you know, come through the southern border. Another way, though,
Speaker 3: is to come in on a fully legal and operational
Speaker 3: visa and then overstay the visa, simply just not go home.
Speaker 3: Both of those are present when we're talking there. It's
Speaker 3: a lot easier to stop the first than the second.
Speaker 3: It's hard to know about how many people were talking here.
Speaker 3: There was an estimate pegging at about eleven million individuals
Speaker 3: as of twenty twenty two. Of those, though, about eight
Speaker 3: million are in the labor force and have a job
Speaker 3: of some kind. Now, that number may actually be low
Speaker 3: because it may have increased in the recent post COVID
Speaker 3: spikes in terms of encounters at the US southern border.
Speaker 3: You know, there's been a documented increase of people trying
Speaker 3: to come in over the last couple of years, So
Speaker 3: that number actually be low.
Speaker 2: If Donald Trump were to carry out his promise of
Speaker 2: mass deportation, what would that mean for growth or for
Speaker 2: inflation in the US?
Speaker 3: Well, look, I think a lot of that is down
Speaker 3: to how much there might actually be in terms of
Speaker 3: an action. If you were to try and take this
Speaker 3: at the most maximal level, and you said I'm going
Speaker 3: to try and deport all eleven million or more people
Speaker 3: in one swift action, you know, just do those numbers
Speaker 3: in reverse. Imagine eight million or more people out of
Speaker 3: the labor force immediately, Jobs lost. Even if the argument
Speaker 3: is that removing illegal immigration is going to allow more
Speaker 3: Americans to take jobs that other people are taking. Even
Speaker 3: if that's the argument, there's simply not quite a way
Speaker 3: to replace eight million people or more in the labor force.
Speaker 3: So that's one part. Even though a smaller retraction in
Speaker 3: the job force would have meaningful effects. That having been said, though,
Speaker 3: we are hearing from a fair number of Trump supporting
Speaker 3: Republicans who have suggested that anything would go in a
Speaker 3: certain amount of phases, and that you would start off
Speaker 3: with most obvious candidates people who have had criminal offenses,
Speaker 3: so more limited action like that wouldn't have such a
Speaker 3: mass effect, and indeed proponents would argue that deporting those
Speaker 3: individuals would have a benefit both economically and also societally.
Speaker 2: What do businesses want on this issue.
Speaker 3: Well, this is an interesting one. If you take a
Speaker 3: chamber of commerce view. Chambers of commerce representing the largest
Speaker 3: businesses across the US, tend to want to have a
Speaker 3: full pool of immigrant labor from which to pick from. Indeed,
Speaker 3: many of them would like a lot more easing to
Speaker 3: be able to have more individuals. This is actually, though,
Speaker 3: playing out as a debate within Republican circles. So Elon
Speaker 3: Musk is one who thinks that there are great benefit
Speaker 3: to having H one B visas available in good abundant numbers.
Speaker 3: These are the ones that are used by highly educated,
Speaker 3: often tech workers, many from Indias and from China. At
Speaker 3: the same time, you have people who have been with
Speaker 3: Donald Trump for a very long time. Steve Bannon is
Speaker 3: one immigration hawks who think that this is a program
Speaker 3: that needs to be pulled down and that Musk's views
Speaker 3: on this are indeed dangerous. So there is a big
Speaker 3: split within Trump's own orbit. Trump right now is leaning
Speaker 3: a little bit toward Musk on some of the skilled
Speaker 3: immigration stuff, even as he's talking about big deportation plans.
Speaker 3: On skilled immigration, he has talked about the need to
Speaker 3: attract the best and brightest and bemoaned the idea that
Speaker 3: there are a large number of international students to American
Speaker 3: universities who will get an American education and then not
Speaker 3: be able to stay. Trump would like to find ways
Speaker 3: to have them stay.
Speaker 2: Immigration is a big postical issue in many parts of
Speaker 2: the world. Is the same sort of debate playing out
Speaker 2: in other countries?
Speaker 3: You know, that's a great question, it is, and indeed
Speaker 3: we see this playing out in pretty much every advanced
Speaker 3: economy that is a reception zone for immigration at scale,
Speaker 3: famously the United Kingdom and Brexit. What more needs to
Speaker 3: be said, immigration was at the absolute heart of that.
Speaker 3: Even here in Singapore, though I mentioned, it's become a
Speaker 3: flashpoint politically, very well educated city state that had received
Speaker 3: a lot of immigrants coming in who had been working
Speaker 3: in Hong Kong when that city was having difficulties after COVID.
Speaker 3: But Singapore is in a position where it doesn't feel
Speaker 3: like it could take in all of those Even if
Speaker 3: you said the five hundred thousand or the million best
Speaker 3: people from Hong Kong economically would come to Singapore, Singapore
Speaker 3: is a city state of six million people, doesn't have
Speaker 3: enough space to house them, doesn't have enough schools to
Speaker 3: educate them. The transportation system wouldn't be able to handle
Speaker 3: the load all of these sorts of things. So I
Speaker 3: do think that anywhere that you go, you do find
Speaker 3: these questions about immigration that are percolating. And look, it
Speaker 3: is an issue in elections all over the world. It's
Speaker 3: going to be an issue in the upcoming Singaporean election.
Speaker 3: It's going to be an issue when Australian voters go
Speaker 3: to the polls. It'll be an issue in Canada when
Speaker 3: those voters go to the polls. So the United States
Speaker 3: is very much not alone. The issues you're seeing in
Speaker 3: the US around immigration are at play in every single
Speaker 3: major economy around the world.
Speaker 2: Okay, dark Well, bind Karsenior editor, thank you very much
Speaker 2: for more explanations like this from our team of twenty
Speaker 2: nine hundred journalists and analysts around the world search for
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Speaker 2: I'm Stephen Carol. This is here's why. I'll be back
Speaker 2: next week with more. Thanks for listening.