In exploring the prospects of another Trump tenure and its implications for this illustrious economy, particularly regarding immigration, allow me to say a few words. President-elect Trump has, indeed, declared his intention to embark on the most extensive deportation programme in American history from the very first day of his potential second term. This programme aims to address the estimated 11 million unauthorised immigrants residing within the United States. Moreover, there are rumours that certain influential Trump advisors are drafting strategies to curtail legal immigration.
Permit me the liberty of reminding you of past promises by Trump that did not quite materialise, such as the famous border wall, with assurances that Mexico would bear the cost. However, should this deportation agenda transpire, distinguished economist Stan Veuger of the American Enterprise Institute projects a rather stark consequence. He foresees a reduction in GDP growth by nearly half a percentage point, which, believe it or not, is quite significant.
Now, regarding the labour market, the expulsion of such a cohort inevitably results in a shrunken workforce. Consequently, displaced workers cease to contribute to the economic tapestry. Veuger eloquently encapsulates this by stating, “People don’t earn money, they don’t produce, they don’t generate capital income for others.”
Adding to the mix, fewer immigrants in employment could elevate prices. This is especially so in industries heavily reliant on undocumented labour, such as agriculture. Enter economist Tarek Hassan from Boston University, who asserts that the Federal Reserve recently curbed inflation due, in part, to an influx of foreign-born labour. He opines that removing migrants might elevate prices, “for everything from produce in the supermarket to Uber rides.”
## Economic Impact on Prices and Wages
- Higher prices for goods and services.
- Potential slight wage increases in low-skill sectors.
- Efficiency pressures on industries to automate.
An amusing wrinkle in this narrative is the economic debate on whether the expulsion of undocumented workers nudges wages upward for low-skilled employees. Economists from both sides of the aisle generally agree that the effect is modest. Nevertheless, Duncan Braid from the pro-Trump bastion, American Compass, argues that decreased immigration might prompt industries to innovate. He states, “The agricultural sector’s access to an unending stream of low-wage workers has hindered automation’s impetus.”
## National Sentiment on Immigration
According to a Gallup poll, a sizeable 55% of American adults favour reducing immigration, whether legal or illicit. Quite telling, isn’t it?
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