President-elect Donald Trump has promised to impose mass deportations and new restrictions on immigration once he’s in office. Those policies could impact the U.S. economy in a number of ways next year.
Marketplace reporter Elizabeth Trovall covers immigration and energy. She caught up with “Marketplace Morning Report” host David Brancaccio to discuss some of the less-than-obvious effects of a crackdown. The following is an edited transcript of their conversation.
David Brancaccio: Let’s start by talking about who could lose out if the Trump administration gets stricter in a hurry on borders.
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Elizabeth Trovall: Well, U.S. consumers could lose out. Many economists believe heavy restrictions on immigration and mass deportations would cause more inflation. Depending on which immigrants are targeted by policy changes, we could see employers have a harder time finding labor. If temporary protected status goes away for hundreds of thousands of workers who get work permits from that designation, that could impact fields like construction, food service and landscaping. Julia Gelatt with the Migration Policy Institute says we could even see U.S.-born workers lose jobs if there’s significant limits on immigration.
Julia Gelatt: U.S. workers and immigrant workers tend to be complements in the workplace. So if an employer can’t find the immigrant workers that they need to fill certain niches, they may have to contract their operations overall and lay off some of their U.S.-born workers.
Brancaccio: But Elizabeth, this is a bet by the Trump administration that they’ll be economic winners in this. Give me a sense of how that could play out.
Trovall: You know, it’s certainly possible that deportations and immigration restrictions could benefit certain U.S.-born workers in lower-paid industries. Though I do have to point out that economists have found immigration increases wages for U.S.-born workers overall, right? Also, it’s likely we’ll see more money flow to support government jobs that support immigrant detention and border security. Another winner will be private prison companies, right? CoreCivic and Geo Group have lucrative contracts with the government to have a certain number of beds available to detain immigrants. Their stocks shot up after Trump was elected. In an earnings call after the election, Geo Group Executive Chairman George Zoley called Trump’s presidency an “unprecedented opportunity” for the company.
George Zoley: We’re looking at a theoretical potential doubling of all of our services, whether it’s in the detention segment, in the transportation segment, as well as the ISAP program.
Trovall: And the [intensive supervision and appearance program] is a program that electronically monitors immigrants.
Brancaccio: If the new administration does move forward to dramatically limit unauthorized immigration to the U.S., what kinds of hurdles would it face when it comes to what are the economic drivers of migration?
Trovall: Hard-line crackdowns at the border will be butting up against the economic reality that the U.S. continues to be an economic superpower and the labor market continues to be tight. And economic conditions in the countries that tend to send migrants have not drastically improved. So if someone can increase their wages many times by coming to the U.S. and they’re going through a hard time, they may opt to immigrate through underground channels, even under harsher restrictions at the border. And when they get to the U.S., it’s not uncommon that people find jobs quickly. In other words, U.S. employers are and will be willing to hire them.
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