Labor Market Collapse? What Trump's New Policies Mean For Jobs | Steven Camarota
Summary
Immigration Policy Impact: The podcast discusses the potential impact of changes to the H-1B visa program, including a proposed $100,000 fee, which could affect the tech industry by limiting the influx of foreign workers.
Labor Market Dynamics: There is a debate on whether reducing immigration, particularly of low-skilled workers, could lead to wage inflation and potentially draw more native-born Americans back into the labor force.
Economic Implications: The departure of illegal immigrants is expected to result in a tighter labor market, potentially increasing wages at the lower end of the job market without significantly impacting overall inflation.
STEM Workforce Concerns: The podcast challenges the notion that the U.S. lacks sufficient STEM graduates, arguing that American-born STEM workers perform well and that the H-1B program is not the primary driver of the STEM workforce.
Market Reaction: Despite policy changes, the tech sector has not shown significant market movement, suggesting that investors may not perceive a substantial impact on the industry.
Birthright Citizenship and Immigration Reform: The discussion touches on the complexities of birthright citizenship and the broader implications of immigration reform on U.S. society and economy.
AI and Future Immigration Trends: The potential impact of AI on job markets is considered, highlighting the challenges of balancing technological advancements with immigration policies.
Policy Recommendations: The guest advocates for a more measured approach to immigration, emphasizing the need for integration and the benefits of a lower immigration rate to enhance assimilation and job competition.
Transcript
Our guest today is Steven Camarada, director of research at the Center for Immigration Studies. The uh changing policies around immigration are to be discussed today. It's very important for how the labor market is going to evolve in the future and ultimately how our economy is going to evolve in the future. We'll start by talking about changes to the H1B visa program and then we'll get into Steven's research. Welcome to the show. Very good to see you, Stephen. Thank you for being here. >> Well, thanks for having me. This is from one of your research um reports uh that you've sent to me dated August 20th. Figure one, no evidence the foreignb born have suddenly stopped taking part in uh CPS current population survey. We'll talk about uh why this decline has been happening for quite some time even before Trump came into office and the implications of Trump's policies on this on this chart and what's next for this chart. Basically, what's next for immigration? But first, let me talk about uh the H-1B program, which has been taking up uh social media by storm over the weekend. Debates on both sides uh flaring up, and I'd like to get your take on where you stand on this debate and ultimately how this may impact the labor market and the tech industry in particular. So, let me just start by playing for you uh a brief clip of what was discussed at the Oval Office uh last week. Take a listen. >> The United States, >> we need workers. We need workers. We need great workers. And this pretty much ensures that that's what's going to happen. I think Sean, do you agree with that? >> Well, they're $100,000 per year. So, the whole idea is no more will these big tech companies or other big companies train foreign workers. >> Okay, I'll stop here and I'll play uh the rest of that uh in just a minute. Uh let me just let's just clarify what exactly it is though. Uh because Lutnik uh Howard Lutnik uh who we saw just now, Secretary of Commerce said $100,000 per year. Uh but according to the US Citizens Citizenship and Immigration Services uh website, it's a one-time payment. So, um did they backtrack or am I just getting confused here? What what exactly is it? >> Oh, I think there was just some confusion with the roll out. Um, as I understand it, as of this moment, subject to change, that it's a one-time fee of $100,000. Um, and that, um, you have to pay it to be able to use the visa. The presumably the employer is the one paying it. Um, that's the that's the expectation and it only one time. >> Let's just get your reaction to hearing this news. a big jump from I'm hearing well I'm seeing reports that the uh uh the old application costs anywhere between $2 to $5,000 now jumping up to $100,000 the employer has to pay for it like you said uh what is your reaction and then I'll get you to react to both sides the debate. >> Yeah. So the H-1B program has always been very popular with employers. It's always been oversubscribed or almost every year they run out of slots. Um and it's supposed to bring people with specialty skills. A large fraction are in computer and computer related fields and engineering but they're across the board. We get some people come in who are physical therapists. So you don't want to think of it as exclusively in one sector but it's heavily concentrated in that one sector. Um there are provisions that are supposed to protect workers um particularly so they don't pay these individuals less, they don't undercut people. Um there are a lot of complaints around it. We have had some pretty high-profile cases like Disney actually bringing in H1B workers at lower pay than the American workers they're replacing, forcing the Americans to train their replacements, laying off the Americans, and then using the H-1B workers. So, those incidents, it's always hard to tell how common that is, but it's technically if you do it right and you cross all your tees and dot all your eyes, you can do that. You can use it. It's not supposed to be used that way, but you can use it. So, that was one of the controversies that this is just a way of increasing the supply of workers in the technology fields primarily keeping down wages. And um there's other things that make employers like this program. It isn't just that they can sometimes pay less, though that's a whole debate. One of the main thing is the employee is tied to the employer technically. So, he can change jobs, but it's not easy. And this gives the um the employer a lot of power over the worker, which as you might guess, employers tend to like, but advocates for workers say is highly problematic. >> Okay, I'll play for you a few clips from both sides of the debate. Uh Howard Lutnick first, who's obviously for this. Uh he's part of the administration. So, take a listen to what he said. Um later on, >> they have to pay the government $100,000, then they have to pay the employee. So, it's just not economic. If you're going to train somebody, you're going to train one of the recent graduates from one of the great universities across our land. Train Americans. Stop bringing in people to take our jobs. That's the policy here. $100,000 a year for H1B visas and all of the big companies are on board. We've spoken to them about the gold card. >> They love it. They really love it. They need it. Go ahead, Chuck. >> Mr. President. >> Okay. Your reaction to what you just said. >> Right. So the I think he's touched on, it's not that systematic, but he's touched on one of the big complaints is that why do we need this program? If you're bringing in the very best and brightest, well, right, we'll charge you a fee of 100,000 and then obviously if the worker is really worth it. Um, by the way, remind your listeners, the program allows you to work in the United States for 3 years and then it can be renewed again for six years. But a huge fraction of the people who use this program are actually looking to stay permanently. So, they're using their three or six years to see if they can get an employer to sponsor them. Maybe they'll win the visa lottery, which is this program where we randomly select people if your country hasn't sent a lot of people. Maybe you'll fall in love and marry an American. There are various ways you could try to stay in the United States. And that's part of what people do when they get um an H-1B visa, a very large fraction. Many just go home and and that's that. But many don't. And so the idea here is look, if this really is the best and the brightest, if you really can't find anyone, charging you $100,000 is reasonable. That's to make sure that it's not just being used to hire people from, you know, a mid-level Indian or Chinese university. We've got tons of people who could do that here. So that's the idea anyway behind the $100,000 fee. >> Before we continue with the video, let me tell you about a very important topic. How to protect your privacy. Now, your private information doesn't just live in the inbox of your phone. It's being collected, packaged, and stored, and tracked by data broker websites all over the internet, even without you knowing. That's where today's sponsor comes in, Delete Me. I use Delete Me to protect my privacy. And here's how. It helps you. It's a platform that helps you remove your personal data, like your name, address, and contact info from hundreds of these data broker websites. When you sign up, you'll get a detailed privacy report showing where your data was found and what's already been removed. And Delete Me keeps working throughout the year, scanning and clearing your information regularly. It's an easy way to take back control of your digital footprint without trying to track everything down yourself. Go to joindeme.com/david Lin and use the promo code David Lynn at checkout to get 20% off of US plans. Link down below or scan the QR code to get started today. I uh I'll play for you some clips from the other side of the debate and then we can discuss some of the details. Um this is more philosophical. This is Mo Kako. He's a Nobel Prize winning physicist who said this many years ago um on what the H1B visa actually means for the talent pool overall of the United States. Keep in mind that Howard London in the clip I play for you just now said that it's going to be uneconomical for companies to now use the H-1B if this plan were to be implemented. So presumably uh we're going to see a phasing out of this on a wider scale. So this is what may happen. Take a listen. >> The United States has the worst educational system known to science. Our graduates compete regularly at the level of third world countries. So how come the scientific establishment of the United States doesn't collapse? If we're producing uh a generation of dummies, if the stupid index of America keeps rising every year, just watch network television and reality shows, right? How come the scientific establishment of the United States doesn't collapse? Let me tell you something. Some of you may not know this. America has a secret weapon. That secret weapon is the H1B. Without the H1B, the scientific establishment of this country would collapse. Forget about Google. Forget about Silicon Valley. There would be no Silicon Valley without without the H1B. And you know what the H-1B is? It's the Genius Visa. Okay. >> All right. All right, I'll just stop here and get you to respond to that. Uh, I think he himself is um, you know, Japanese by nationality or ethnicity, but he was born in the US, but I'll take uh, I'll take your response first. >> Yeah, he doesn't know much about the program. I think he's confusing it. We have another we have lots of other things, but we had give over 100,000 visas out uh, for employers, mostly non-skilled, I mean skilled people, and that brings in a lot of skilled people. The H-1B visa is referred to as a non-immigrant visa, which means that it doesn't give you a green card, permanent residency, and then citizenship. In addition, lots of people come on family based visas who end up working in science. H1B visas are significant, and there's several hundred,000 people with that visa, but relative to the overall size of the labor market or the um or even the scientific, we'll call them STEM workers, science, technology, engineering, math, H1B is not a huge share. That's not really what drives it. The other thing I think he doesn't quite understand is the average salary is of an H-1B visa holder isn't that different than the average salary of an American in that field. Now, there's lots of complicated wrinkles to that, but we don't find evidence that these are particularly highly productive, but the evidence that they work for less is not that strong in some places. Definitely happened. But um the the other problem I think is this whole idea that America's science education system stinks. Um remember STEM workers are only a few percentage points of the total labor force. If you look at Americans born here who are university grads in STEM fields, we have all kinds of surveys on this. They score just fine. They score as high or higher than their foreign counterparts. Yes, it's true that on average, American students score lower than students in many other countries on science and math, and that is a real problem. But it doesn't really affect the supply in the way that he seems to imagine of STEM workers overall because it's only a small percentage of the total labor force. And we seem to be producing a lot of people in that field who are US-born or at least permanent residents, not uh uh you know, not um not people who grew up here. You know, they came as kids and their parents have green cards, they become citizens, so they're foreign born and they go to American universities, too. But overall, we seem to produce very high quality STEM workers. And his discussion of that doesn't really appreciate that. It's only a small percentage. So it doesn't really the overall average in math and science isn't affected that much by our ability to produce high quality STEM people here. So there isn't actually. >> Yeah. >> So you're saying proportionately speaking there isn't actually a very high number of foreignb born uh students studying at top American schools who then end up graduating in the STEM field to work at tech tech companies. That that is >> no there yeah there is but most of them are not H-1B. Right. If there's if you're a foreign student in the United States and then go work at a tech company, you might have tried to then secured an H-1B visa. I see. But, you know, very often you found an employer to sponsor, you married an American, it's not the H1B program. In addition to that though, when we look at nativeorn Americans who still make up about 77% of all STEM workers in the United States, they score just fine on all the standardized tests, you know. So our US graduate chemists or physicists, mathematicians and so forth, we don't we don't find that they're not able to graduate and and and and do the work. Same with engineers. Usually what happens by the way is people move out of the STEM field because there's so much things that are so much more lucrative. So only about 23% of even foreign trained engineers who come to America stay work as engineers. They go out and work sometimes as supervisors. they work in financial services because they have quantitative skills. Um so a lot of people do move out of STEM fields but it has to do with the fact that they can just do better elsewhere because these are very these tend to be our most talented students. But the idea that America doesn't produce enough STEM students because our education system is lacking is not really supported by the data. The other thing that you have to keep in mind is we can look and we've done this a million times at my organization and many others at wage trends among the STEM fields whether it's engineering or mathematicians or physicists, chemists, whatever. And it doesn't show rapid wage growth. It shows their wage growth is very similar to other college graduates. If America was terribly short of STEM workers, we would expect rapid increase in their wages. We can even study their benefits packages. It doesn't show that either. So, um, there's just no evidence of a STEM shortage, and we do produce a lot domestically. Now, you still might want to get the best and the brightest from overseas. H-1B can sometimes give us that, but that's not really, it's much more for mundane sort of middle of the road people. Um, I'm looking at the stock market. The tech sector hasn't really moved on the news, so it doesn't seem like the markets believe that the tech sector is going to suffer tremendously because of this new announcement and change in policy. uh the the claim that um tech companies are on board uh which is what Trump said. Uh I'm not sure. Uh this is a tweet that Elon made in December 2024. Not exactly in response to this, but in response to something else. Uh the reason I'm in America along with so many critical people who built SpaceX, Tesla, hundreds of other companies that made America strong is because of H1B. My question is what will tech companies do uh now that uh the fee has gone up to 100k uh per applicant? This CNBC article claims that uh competing regions like the Middle East, Asia, and in places in Europe now stand to gain from a talent uh drain if this were to go on. Um can you comment on that? >> Well, we certainly always hear that, right? Um that well they'll just go elsewhere and there could be some truth to that. America remains extremely attractive because it's a very open society. It taxes higher income people at relatively lower rates than other places and it's one of the few places where you can come in on a temporary visa but eventually get a green card which many people like to do. Not everyone by any means. So it will remain attractive for immigrants but yeah I think it's going to make the program less attractive for employers. Um, it probably means that only the employers who really want to pay very high wages yet very productive people from overseas. But it probably does mean that if you have to have this 100,000 upfront cost that there will be fewer people coming in under the program and some of them may choose to go elsewhere. Uh especially well China has a lot of job opportunities but India maybe there'll be some of them who choose to go elsewhere. Um that that's a possibility but I think that's by design. The idea is um take the original point that the speaker that you showed um and I won't pronounce his name because I don't want to get it wrong but the Japanese American he was arguing look we have this weakness in our public education system but one response is yeah and part of the reason we don't fix it is we just keep bringing in foreign workers if American industry had to rely on what's here they'd be pressuring high schools and junior highs and and and American universities and graduate programs to educate better and to bring more people in uh you know bring more people along in in STEM fields. And if you want to correct the problem, the last thing in the world you want to do is keep wages lower, keep bringing in foreign workers. So one argument would be few let fewer people in, let wages rise, create the incentive to reform our education system if we think that's the problem. If we think there's a pipeline problem, if you never want the pipeline problem addressed, the argument goes, we'll just keep bringing in the foreign workers. >> The overall attempt to curb foreign workers from coming in, this is just part of that larger attempt. Is this going to cause wage inflation, especially among tech companies, Steve? >> Yeah, I mean, that is one question. Obviously, in a labor force of 165 million people, um, when you're talking about a few hundred,000 and if you take STEM work overall, you know, you're still talking about, depending on how you count STEM, at least 5 million. Um, it's not clear that it's going to have a huge impact on wages there, but it could have some. Uh, I think though that many people have said wages in those fields have not grown very fast, so that would be good, right? profits have been high. The CEOs make a lot more money, but the actual people who do a lot of tech work, their wages are kind of stagnant. Now, in terms of the larger question of lowering the level of immigration, the big impact that we may be seeing is that it looks like there's a big decline right now in workers more at the bottom end of the labor market because it looks like many of the people who are not showing up in the data anymore and presumably are leaving are uh illegal immigrants. We think that about 3/4 very very roughly of illegal immigrants have no education beyond high school. And there it looks like that's where the big fall off. But the good news is yeah, it could drive up wages. But the bottom even the bottom third of the US labor market accounts for such a small fraction of total economic output that even if those lower wage poorer workers got an increase in their salaries, it couldn't spike inflation because they only count for what? they account for less say the bottom third they account for like 15 18% of economic output so even if their wages went up like 10% it would be an it could be passed on to consumers as a low singledigit increase and many people and I think I count myself among would like to see people at the bottom end make more right one of the big problems we've all talked about in the last 40 years is people who have a high school degree or less or even just without a college degree haven't fared all that well in the US labor market. So if they did get a raise, we don't have to worry about inflation. And I think making lower income workers better off would be a sound public policy. I mean, if I could go on a little bit more on this because this is an area I do a lot of research on. The biggest problem in the US labor market is all the people not in the labor force. To be in the labor force, you have to work or say you're looking for work. And we have still a re a nearrecord number of people without a college degree who are of working age say 16 or 18 to 64 who don't work and they don't look for work. They are out of the labor force entirely and this is linked to huge social problems. The hope is with less immigration including illegal immigration we might see wages rise. We can draw some more of those people. It's primarily men, by the way. And the destructive behavior they engage in, everything from opioid addiction to crime that is linked to men out of the labor force is a super serious social problem. And and there's been a lot written on this, so I'm not and it's heavily concentrated among nativeborn men without a college degree. So, the hope is over time if illegal immigrants leave, then wages and benefits will rise, employers might become more patient, and we can at least draw a few million more of these guys back into the labor force. It's not going to be easy, but it could have a very uh cascading series of positive effects on American society. I mean, that's the hope. >> Okay. Tangential to the uh H1B uh visa issue is a new uh Trump gold card that promises to grant residency to people who pay up to a certain amount. I think it's a million dollars. Let's take a look at it. It's live now. Apply now. A $1 million contribution grants you the gold card. What is the legal status uh that you uh obtain? It's uh EB1 or EB2 visa holder status as soon as you get the gold card. So, what do you um what's your reaction? Yeah, it's supposed to be a modification in these investor visas, right? If you came and promised to invest X amount of dollars in the United States, then you could get a green card. And to remind your listeners again, the green card is permanent residency and after five years or so, you can become a citizen. So, this is essentially off auctioning off um American citizenship or permanent residency and citizenship. It used to be that you had to invest. they're sort of trying to change that to see that you um that you just pay the United States government a fee of a million dollars. And the criticism was with the EB5 is that there were all kinds of shenanigans and loopholes and you really didn't have to invest the money or it could be money that was already invested. And so this way uh it does have the virtue of being um simple and straightforward pay a fee. But the concern is or at least some concern. Well, there are two concern. One is has the program been modified in a legal fashion. Does the president, they have some legislation. We'll have to see what the courts say. I'll leave that to the courts. But the bigger question is, do you want to sell citizenship? And a lot of people say, "Darn right we should, right? We can make money for the public coffers." And other people say, "No, American citizenship shouldn't be about just uh selling it off to the highest bidder. We're a country. were not just a place to do business, right? So, you know, that'll be a debate. Um, but clearly this could be a new avenue in, but it's really just a modification of the existing green card program for investors, which isn't very large anyway. And most research suggests not that many people have the million dollars and want to come to the United States, but we'll see. >> Well, that brings my question to another um issue, and uh we'll go back to your research in just a minute. uh Trump wanting to end birthright citizenship since his inauguration. Where do you stand on this debate? >> Yeah. So, I think that most Americans would probably say, and I share it, there seems to be something wrong with the system that if a person is on a tourist visa and has a child here, that child is automatically a US citizen from birth. Um, most countries don't do that. If someone's illegally in the United States, has just come across the border and has a child here, the child is automatically a US citizen. This is kind of important because it it greatly complicates enforcement efforts. After all, if you want to send the parent home who's here illegally or you want the parent to honor the tourist visa, then you have a situation where it becomes more difficult or or what if the person goes home and now they have this child with very little tie to the United States. We see this with what's called birth tourism where people come have a child and then return. Russia is a big place where people do that. Some China, some India, but Russia t tends to be one of the biggest. And so now there's this person who didn't grow up in the United States, has no ties in the United States, no family in the United States, but has American citizenship and can return to the United States at any time as long as the parents, you know, register the birth properly. And I think that strikes people as odd. Most countries, but not all, in the world have moved away from such a system. Partly because the idea of birthright citizenship can make a lot of sense in an era where travel is difficult and you don't have a lot of tourism and you don't have a lot of illegal immigration. But that's not our situation today. And the idea is you would probably want to give the immigration status to the child that the parent have. However, there is a downside and you and that has to be thought about, which is that if you're not going to enforce your immigration laws, then you're going to have people who grow up here, right, and were born here and then you're going to try to send them back to a country they've never been, even if that country takes them. There's a certain unfairness to that. And that's another aspect. It's one of the consequences. If you tolerate large-scale illegal immigration for a long time, people worry about the exploitation of the illegal immigrant. They worry that they'll work for less and drive down wages. There are lots of things, but one of them is all the children. So, birth tourism plus illegal immigrants, you're looking at about 300,000 births a year. That's a lot. And it's worth thinking about. 7 8% of all births might fall into that category in the United States. So, not a trivial issue. And then, and over the years, it means you have millions of people who essentially join the United States. And the public didn't really consent to that. Our laws didn't really consent to that, but that's what happened. So, you can see the high level of dissatisfaction. But it would require reforming everything from how we let in the tourists to how much we enforce immigration laws cuz if you had fewer illegal immigrants, it wouldn't be as big a deal. >> All right, let's get to your research now. Center for Immigration Studies. Before we talk about uh the research itself, the tagline for the website I found quite interesting. Low immigration, pro-immigrant. Upon first glance, that might seem like an oxymoron. Can you just explain uh kind of the philosophy here? >> Yeah. Right. So, there was a commission in the 1990s by headed by Barbara Jordan, the first AfricanAmerican woman elected from the South. She was appointed by Clinton. And there was an immigration commission and they looked at immigration. And we share their perspective that the overall scale and size of immigration to the United States is too high, but that we also think it's important to work to integrate the immigrants. We haven't really favored things like cutting immigrants off from welfare or anything like that, legal immigrants. We think we should have every, you know, she said it this way, everybody who should get in should get in and everybody who shouldn't get in should be kept out and those who are here without authorization should be removed. And I think that essentially sums it up. And we think that so to help your listeners, the US gives about 1.1 maybe 1.2 million green cards a year. Um, it also allows in hundreds of thousand long-term temporary visas each year, visa holders, foreign students, guest workers, cultural exchange, that sort of thing. So, there are about 38 million of various kinds of legal immigrants, and that includes naturalized citizens in the United States. And then on top of that, you could debate this number. I would say most people agree it's between 14 and 16 million illegal immigrants. That doesn't count their children born here, but uh in the United States, so maybe 38 million legal, somewhere around 14, 15, 16 million illegal immigrants. And we think that is overwhelming the assimilation process. It's straining key social services. It's causing us, for example, to ignore serious social problems. As I mentioned, all those men out of the labor force um who uh we just don't have we don't care about because we just hire the immigrants instead. And I think we need to draw those folks in to help deal with those social problems. So overall I if we allow in say 11 12 million legal immigrants we think that number each decade we think each decade it should be more like 5 million. Uh and in terms of illegal immigration we need to do a lot more especially going after employers who hire illegal immigrants. So we need a work site verification an expansion of eerify system that we have right now. It's voluntary. So these are basically our position. But we don't think that um that we should do things like make it harder for people to become citizens. We don't we think we should help them become citizens and facilitate their acquisition of language. We think that we don't think it's a great idea to try to cut immigrants off from welfare programs and things like that. So that would be our more pro-immigrant um position. And we think that lower immigration would be good for all the immigrants here. It would mean less job competition. It would facilitate their assimilation. So, that's essentially our take. Um, a relatively unique take here in Washington. There's lots of groups arguing for more immigration, expansive immigration. There aren't many groups who think a more modest pace of immigration would make sense, but we're one of the few. >> Your research shows that the uh foreignb born population, both legal and illegal immigrants combined, declined by 2.2 million from January to this year to July. That's a huge number. >> What happened here? Was it just lower immigration or deportations or a combination of of the two? >> Yeah, it it means it probably means almost certainly that fewer people came in. >> It means that deportations were higher, but the main thing it means is illegal immigrants especially and immigrants generally. We we think about three4s of that decline seems to be among illegal immigrants. Um so it looks like the illegal immigrant population, some large fraction of it has gone home. Now, it's still, you know, that's not a huge fraction. 2.2 million is, you know, very roughly 10% maybe um, you know, something like that. Maybe a little more 12%. But, uh, so most of the 90% are still here presumably. But, um, because we think 1.2.2 is the total, 1.6, which is about 10% of the illegal population, uh, has gone home or got deported. So now it it it's a little complicated because people who are here illegally every year often also get legal status. So that's another way you can leave the illegal population. Um you can get asylum in some cases. You could marry an American. You could win the visa lottery. There are ways for illegal immigrants to become legal immigrants. Um those numbers are not trivial, but over such a short period of time, the main reason the numbers fell were illegal immigrants seem to have gone home. The big question which we can discuss is is it real? The data show it, but are they is it a illusion? Is it a statistical artifact if you will? It's not. They're still here. We're just not picking them up in the data anymore. And I you know >> Yeah. Go ahead. >> Yeah. Who are these 2.2 million people primarily and how will their departure or I guess lack of participation in this labor force now impact the labor force itself? >> Yeah. Right. So, we think they're mostly predominantly from Latin America. We think they're predominantly people without a college education. They're somewhat disproportionately men. Um, and that's who seems to have declined. And that is a population highly correlated with the illegal population. And when we dig a little deeper, it looks like it's very heavily people who are illegal immigrants mostly, but not entirely. People who've come in the last 10 years, the last 15 years. So, they're tend to be the newer ones. We have illegal immigrants who've been here a long time. these folks are are the newer. And what will it mean? Well, it'll reduce the supply of workers. And although we have, as I said, enormous numbers of people on the economic sidelines who are of working age, they're not even 65 yet, um, who are not working, not looking for work. So, it depends on how many of them we can draw back in, but it probably does mean higher wages. It means a tighter labor market for employers. Um, that can be good for if you're a worker, it could mean, especially at the bottom end where these people tend to be concentrated, it's good news for you, it means it increases your bargaining power. But if you're an employer, you may you may uh you may may not like it. If you're a consumer who's looking to hire someone at the bottom end market to fix your roof or to be a nanny, a maid, a bus boy, you're using those services. It could be bad if you're a taxpayer. The departure of lowincome immigrants who tend to be a fiscal drain is good. So, you know, you have to decide. Immigration is always about winners and losers. The big winner from immigration are the immigrants and employers. The big losers are workers who compete with them and taxpayers. This makes me this made me wonder, Stephen. Um, we know that the job growth numbers in America have slowed to the weakest pace since basically the pandemic. I wonder if the departure of some illegal immigrants um was not reported officially and so maybe employers are actually looking for more labor. They're just not officially posting uh you know wanted posters and ads, you know, shadow kind of labor market going on. Yeah, >> we have two sources of data. One is the one we've been talking about, the current population survey, which surveys people in their homes and says, "Hey, are you working? Are you here? Are you working?" And that's where we get the unemployment rate. It's all the people who say they're looking but haven't found something. The other source is what's called the um establishment survey where they go out and ask employers, hey, uh you know, how many people do you have in working? And that's the one that shows this big drop off in people in jobs. And um the uh the thing is the question here is uh is are we going to be seeing very little job growth in that survey of employers? And we probably are. Now that survey of employers only counts people who are covered by unemployment insurance. And a lot of illegal immigrants aren't. So they're not going to show up in that data. But a lot are illegal and most legal immigrants are vast majority. But it still looks like it looks like the immigrant workforce is down or immigrant workers is down by about a million. It looks like about 34 of that are illegal immigrants. A lot of those aren't paid off the books. They're not going to show up in those employer surveys. But the point is if illegal immigrants are leaving in the way that we think they are, then we are going to see much slower job growth employers because people are actually leaving jobs and we're actually seeing that in some other data as well. But the point is it's going to affect job growth numbers. But I said at the outset that doesn't mean the native born or legal immigrants are losing jobs. They could still be gaining jobs, but the net effect when you survey employers is little or no job growth. Even though the native born and the legal immigrants are doing just fine. Um so that is something you're going to have to keep an eye out for. It's also going to affect things like GDP numbers. Gross domestic product partly reflects labor. It's a key input. And if the immigrant illegal immigrants are leaving, it means a smaller GDP. They're they're they're leaving as consumers. They're leaving as workers. But it doesn't necessarily mean in any way a smaller per capita GDP, what each person has. And remember, it's really per capita, not aggregate GDP that matters. In the same way that we say that uh New Zealand is a lot richer than Bangladesh because it has a higher per capita income and Bangladesh does have a larger aggregate GDP. But that that doesn't really mean it's wealthier. And so the departure of people is going to probably cause a smaller GDP, but it won't necessarily be bad news unless what you want is bigger GDP in an aggregate not per capita sense. Does that make sense? >> Yeah. I'd like to respond to a uh research report um that basically argues for the other side saying that um fewer immigrants even illegally I I suppose though it doesn't specifically say illegal immigrants uh may adversely impact native born workers as well uh in the job market. Take a list listen to this report. It's from the um economic policy institute dated July of this year. Nearly six million jobs will be lost if the Trump administration carries out with its stated goal of deporting four million people over four years. The analysis finds uh every state will suffer job losses. California, Florida, New York, Texas and so on will have the highest number of job losses due to larger immigration population. This the uh logic here is because jobs held by US-born and immigrant workers are often complimentary and economically linked, the shrinking supply of immigrant labor can adversely affect employer demand for jobs held by both groups of workers. Uh if you open up the report itself, it says deportations sharply reduce the supply of labor, which we just talked about, threatening the ability of employers to generate revenue and pay for business expenses like rent, machinery, and even the labor of any remaining workers. immigrant labor supply will fall because immigrants tend to have high employment rates. So arresting, detaining, and removing immigrants from the country removes people from the workforce. I think the logic here, I think, is pretty self-explanatory. Remove part of the labor force, businesses start to slow, other people lose jobs, right? So you have to wonder, there's a couple things, right? Obviously, even in that report, it says most of the job growth, most of the job losses are are absorbed by the immigrants who leaves, which is the point, right? So you can't really criticize. You may not like mass deportations. You may not like immigration enforcement, but you have to at least accept that's the goal. So, uh, illegal immigrants leave and that means a lot of workers leave. So, that's the reality. The question is if illegal immigrants leave, can we fill any of those jobs with the USORN? So, we have millions of US-born people without a college degree on the economic sidelines. About 18 million men, for example, they're of working age, but they don't work. the it used to be the case it used to be the case that let me just even go back to 2000. If we could get the situation back to what it was in 2000 in labor force participation that is the share who work or at least look for a job we would add nearly 5 million men to the US labor market. If we could get it back to what it was in 1960 which probably is unrealistic it would add 9 or 10 million. But as I said at the outset this is a social disaster that these people are on the economic sidelines. By the way, this excludes people in prison and and if we could just get some of them back in. And now if you counted women, then you could add a few million more. Um their situation is somewhat more complicated and different. So the question here is what EPI who wrote that seems to be assuming is we can't raise wages. We can't draw more Americans back into the labor force. Uh and I very skeptical of that position. And the other thing they seem to be assuming is you can never substitute capital for labor. But for example, our agricultural sector is in some ways not as capitalized as those in other countries where they don't have illegal immigrant labor. So they use more machines and more labor saving devices and techniques. So I guess I would say there's a certain assumption of inflexibility in the US labor market. The US labor market I think is very flexible. It can absorb a lot of immigrants by reducing capital investment and by lowering wages or it could absorb fewer immigrants by making adjustments in wages and capital investment and drawing more people into the labor force. So I mean in some sense we are going to experience a social experiment here and see what happens. But I think it's worth it to drive up wages for the poor and the less educated in general and to try to draw more people back in the labor force. But I think there are a lot of businesses who would disagree and say I don't want to pay more. I can't pay more and we can't employ these people who are out of the labor force. Um I would say that's a very uh you know pessimistic view. I think I'm more hopeful that we will see higher wages. We will see more people in the labor force and we'll see more capital investment as well to increase productivity. So I mean really that's the core of the debate here. Can you know which is it you want? Do you want the biggest economy you can have with the most people, aggregate sense of working, biggest GDP, or do you want a higher paid economy and better labor force participation? I mean, I think that's some of, you know, the debate here. >> Okay. Ultimately, what is the direction that the economy is headed towards of the scenarios that you gave? >> Well, if I knew the answer to that, I wouldn't be working here, right? If I could um what did Yogi Bear say? It's tough to make predictions especially about the future. Well, I I wouldn't say. I think it's hard to say because we have this other variable, the the impact on on business confidence of the tariffs and I have no idea what that's going to be. I suspect you know way more about it than I do, but that's out there too. So, um the departure of immigrants will however mean lower GDP growth and lower job growth at least in the short term. It doesn't mean that the economy is worse off. American workers, American consumers are worse off. But it will mean that. So I think you got to look for that and accept that that's the case. But whether or not it means a bad economy, a rise in unemployment and all the other things, you know, stagnant or declining wages and all the other things that sometimes happen with the economy going south. I don't think that's going to happen. And I'm hopeful that what we're really going to see is increased wages, particularly at the bottom of the labor market, building, cleaning, and maintenance, construction, labor, maybe the farm sector. Um, these kinds of jobs, installation and moving jobs, these kinds of jobs where illegal immigrants have been heavily concentrated for a long time. I think we're going to see higher wages. And I would argue that that's a good thing. um not a bad thing, but it's a but obviously if I were an employer in that sector, I may think otherwise, but I think as an American, I think higher wages for the bottom end is good news. One final question, this came in from a producer, Dr. Matthew Milligan. He recently moved to Atlanta where um a large number of Latin American immigrants told him that they moved there initially in the mid 1990s to work on construction projects related to the um 1996 summer Olympic games. Many settled and stayed and they created their own little burrows within Atlanta. Does that story kind of match uh your research and data about how new immigration destinations are typically formed? >> Yeah, this is a great issue, right? We know sometimes refugee settlement agencies uh you know settle people. So that's a clear example and sometimes it's associated with a key employer whether it's a meat or poultry practicing plant or the furniture manufacturing industry that somehow begins to bring in a lot of immigrants. But how new areas of immigration get settled, right? How did Manasses uh Virginia in the 1990s become a huge area of immigrant settlement? I think that's not totally understood. It certainly follows patterns of the past. Immigration very much is partly at least uh you know based on what we call social networks. Some people call it uh you know um well social networks. And what it means is people go where their where their families are, where people from their home community, their home country are. And so that's one of the things that drives immigration to some areas and not others. But in general, immigrants tend to go, now it's my turn to cough. Um, into areas where job growth is good. We don't get a lot of immigrants in West Virginia because there's not We don't get a lot of job growth in Western Pennsylvania. Um, we don't get as many much immigrants in um in upstate New York. Again, job growth isn't that great. Even looking at the border, we get a lot of jobs, a lot of immigration to uh to Texas because a lot of jobs growth, but we don't get as many to New Mexico. although it too was right on the border, it too had a historical tie with Latin America because the economy of uh of New Mexico just never performed that well. And so I think that um that is something to think about. We would expect immigrants to go and they do where job growth is high but one of the things one of the consequences of that is it tends to shortcircuit the movement of nativeorn people. If the immigrants all come in, then the native born aren't going to be moving there. And what we've seen in the last two decades is a significant decline as immigration has increased a significant decline in native mobility within the United States. People don't leave New York State nativeorn people like they used to to go to Texas or California or Florida. As the immigrants arrive in an area, it tends to reduce the arrival of nativeorn people, which certainly suggests that there's job competition. In fact, we see evidence that when immigrants move into an area, the native born tend to move out. Now, they might move out for cultural reasons or impact on schools, but one of the assumptions or seems to be that they're worried about job competition, too. So this is another way that less immigration might benefit the country by restarting or increasing again that old geographic mobility as Americans move for greater uh you know economic opportunity that immigration kind of shortcircuited in recent decades. >> I do have one final question I'll let you go Stephen. How do you think AI is going to change immigration into the future? Presumably, if you think about it this way, if you if AI is to cut a lot of jobs, especially at the lower income tiers, uh across the world, not just across the US, across the world, wouldn't it be logical that a lot of countries would see a mass outflow of workers to the US or other parts of uh the developed world looking for jobs, but at the same time, these countries in the developed world will have fewer jobs to offer those same people, >> right? So, there's kind of a paradigm shift here. Yeah. So, let me answer it this way. I can't tell you what AI is going to do. Right now, it hasn't really eliminated a lot of jobs at the bottom end yet, but I think many people think it will. This highlights an important difference between trade and immigration. Sometimes people see them as the same thing. When you bring in any good or service, right, you are in effect importing the labor that made it and immigration imports labor. So, the idea is that they are very similar. But this points to something very different. If you import the labor through uh an import of a good or service, you can then next year import less of it. If you decide, look, we don't need as much, we don't want this as much, immigration more or less permanently or fund in a much more fundamental way changes the supply of labor. And if technology changes in the way that you're suggesting and you find you don't need that labor, well, now you have the very painful problem of trying to say, well, not only people can't come, but we have to make some of these people go home. And people are people and um they are entitled to be treated in certain ways as human beings. Whereas just importing fewer cars next year or radios or computer chips is easy. You could just say, "Okay, we're not going to take them." And this does suggest that although both immigration and trade offer uh you know um increase the effective supply of labor in your country, >> they are fundamentally different. Inanimate objects are not people and that's something to think about. The inanimate object doesn't reshape your culture. It doesn't um create fiscal demands on your hospitals and schools. Now also the immigrants pay taxes. So that's important. But in other words, that I think is sort of what you're getting at. What if we get a big technology change? Yeah. And um we've let so many people in and that means now you have to deal with the question, what do you do now? Whereas if you just had trade, you don't have to deal with that question. >> Yeah. All right. Thank you very much, Stephen. Where can we learn from you and read your work? >> Yes. CIS.org like center forimmigration studies.org. Everything's there for free for download. >> All right. We'll put the link down below. Make sure to check that out. Appreciate your time, Stephen. Good talk. We'll speak again soon. Take care for now. >> Thanks for having me. >> Thank you for watching. Don't forget to like and subscribe.
Labor Market Collapse? What Trump's New Policies Mean For Jobs | Steven Camarota
Summary
Transcript
Our guest today is Steven Camarada, director of research at the Center for Immigration Studies. The uh changing policies around immigration are to be discussed today. It's very important for how the labor market is going to evolve in the future and ultimately how our economy is going to evolve in the future. We'll start by talking about changes to the H1B visa program and then we'll get into Steven's research. Welcome to the show. Very good to see you, Stephen. Thank you for being here. >> Well, thanks for having me. This is from one of your research um reports uh that you've sent to me dated August 20th. Figure one, no evidence the foreignb born have suddenly stopped taking part in uh CPS current population survey. We'll talk about uh why this decline has been happening for quite some time even before Trump came into office and the implications of Trump's policies on this on this chart and what's next for this chart. Basically, what's next for immigration? But first, let me talk about uh the H-1B program, which has been taking up uh social media by storm over the weekend. Debates on both sides uh flaring up, and I'd like to get your take on where you stand on this debate and ultimately how this may impact the labor market and the tech industry in particular. So, let me just start by playing for you uh a brief clip of what was discussed at the Oval Office uh last week. Take a listen. >> The United States, >> we need workers. We need workers. We need great workers. And this pretty much ensures that that's what's going to happen. I think Sean, do you agree with that? >> Well, they're $100,000 per year. So, the whole idea is no more will these big tech companies or other big companies train foreign workers. >> Okay, I'll stop here and I'll play uh the rest of that uh in just a minute. Uh let me just let's just clarify what exactly it is though. Uh because Lutnik uh Howard Lutnik uh who we saw just now, Secretary of Commerce said $100,000 per year. Uh but according to the US Citizens Citizenship and Immigration Services uh website, it's a one-time payment. So, um did they backtrack or am I just getting confused here? What what exactly is it? >> Oh, I think there was just some confusion with the roll out. Um, as I understand it, as of this moment, subject to change, that it's a one-time fee of $100,000. Um, and that, um, you have to pay it to be able to use the visa. The presumably the employer is the one paying it. Um, that's the that's the expectation and it only one time. >> Let's just get your reaction to hearing this news. a big jump from I'm hearing well I'm seeing reports that the uh uh the old application costs anywhere between $2 to $5,000 now jumping up to $100,000 the employer has to pay for it like you said uh what is your reaction and then I'll get you to react to both sides the debate. >> Yeah. So the H-1B program has always been very popular with employers. It's always been oversubscribed or almost every year they run out of slots. Um and it's supposed to bring people with specialty skills. A large fraction are in computer and computer related fields and engineering but they're across the board. We get some people come in who are physical therapists. So you don't want to think of it as exclusively in one sector but it's heavily concentrated in that one sector. Um there are provisions that are supposed to protect workers um particularly so they don't pay these individuals less, they don't undercut people. Um there are a lot of complaints around it. We have had some pretty high-profile cases like Disney actually bringing in H1B workers at lower pay than the American workers they're replacing, forcing the Americans to train their replacements, laying off the Americans, and then using the H-1B workers. So, those incidents, it's always hard to tell how common that is, but it's technically if you do it right and you cross all your tees and dot all your eyes, you can do that. You can use it. It's not supposed to be used that way, but you can use it. So, that was one of the controversies that this is just a way of increasing the supply of workers in the technology fields primarily keeping down wages. And um there's other things that make employers like this program. It isn't just that they can sometimes pay less, though that's a whole debate. One of the main thing is the employee is tied to the employer technically. So, he can change jobs, but it's not easy. And this gives the um the employer a lot of power over the worker, which as you might guess, employers tend to like, but advocates for workers say is highly problematic. >> Okay, I'll play for you a few clips from both sides of the debate. Uh Howard Lutnick first, who's obviously for this. Uh he's part of the administration. So, take a listen to what he said. Um later on, >> they have to pay the government $100,000, then they have to pay the employee. So, it's just not economic. If you're going to train somebody, you're going to train one of the recent graduates from one of the great universities across our land. Train Americans. Stop bringing in people to take our jobs. That's the policy here. $100,000 a year for H1B visas and all of the big companies are on board. We've spoken to them about the gold card. >> They love it. They really love it. They need it. Go ahead, Chuck. >> Mr. President. >> Okay. Your reaction to what you just said. >> Right. So the I think he's touched on, it's not that systematic, but he's touched on one of the big complaints is that why do we need this program? If you're bringing in the very best and brightest, well, right, we'll charge you a fee of 100,000 and then obviously if the worker is really worth it. Um, by the way, remind your listeners, the program allows you to work in the United States for 3 years and then it can be renewed again for six years. But a huge fraction of the people who use this program are actually looking to stay permanently. So, they're using their three or six years to see if they can get an employer to sponsor them. Maybe they'll win the visa lottery, which is this program where we randomly select people if your country hasn't sent a lot of people. Maybe you'll fall in love and marry an American. There are various ways you could try to stay in the United States. And that's part of what people do when they get um an H-1B visa, a very large fraction. Many just go home and and that's that. But many don't. And so the idea here is look, if this really is the best and the brightest, if you really can't find anyone, charging you $100,000 is reasonable. That's to make sure that it's not just being used to hire people from, you know, a mid-level Indian or Chinese university. We've got tons of people who could do that here. So that's the idea anyway behind the $100,000 fee. >> Before we continue with the video, let me tell you about a very important topic. How to protect your privacy. Now, your private information doesn't just live in the inbox of your phone. It's being collected, packaged, and stored, and tracked by data broker websites all over the internet, even without you knowing. That's where today's sponsor comes in, Delete Me. I use Delete Me to protect my privacy. And here's how. It helps you. It's a platform that helps you remove your personal data, like your name, address, and contact info from hundreds of these data broker websites. When you sign up, you'll get a detailed privacy report showing where your data was found and what's already been removed. And Delete Me keeps working throughout the year, scanning and clearing your information regularly. It's an easy way to take back control of your digital footprint without trying to track everything down yourself. Go to joindeme.com/david Lin and use the promo code David Lynn at checkout to get 20% off of US plans. Link down below or scan the QR code to get started today. I uh I'll play for you some clips from the other side of the debate and then we can discuss some of the details. Um this is more philosophical. This is Mo Kako. He's a Nobel Prize winning physicist who said this many years ago um on what the H1B visa actually means for the talent pool overall of the United States. Keep in mind that Howard London in the clip I play for you just now said that it's going to be uneconomical for companies to now use the H-1B if this plan were to be implemented. So presumably uh we're going to see a phasing out of this on a wider scale. So this is what may happen. Take a listen. >> The United States has the worst educational system known to science. Our graduates compete regularly at the level of third world countries. So how come the scientific establishment of the United States doesn't collapse? If we're producing uh a generation of dummies, if the stupid index of America keeps rising every year, just watch network television and reality shows, right? How come the scientific establishment of the United States doesn't collapse? Let me tell you something. Some of you may not know this. America has a secret weapon. That secret weapon is the H1B. Without the H1B, the scientific establishment of this country would collapse. Forget about Google. Forget about Silicon Valley. There would be no Silicon Valley without without the H1B. And you know what the H-1B is? It's the Genius Visa. Okay. >> All right. All right, I'll just stop here and get you to respond to that. Uh, I think he himself is um, you know, Japanese by nationality or ethnicity, but he was born in the US, but I'll take uh, I'll take your response first. >> Yeah, he doesn't know much about the program. I think he's confusing it. We have another we have lots of other things, but we had give over 100,000 visas out uh, for employers, mostly non-skilled, I mean skilled people, and that brings in a lot of skilled people. The H-1B visa is referred to as a non-immigrant visa, which means that it doesn't give you a green card, permanent residency, and then citizenship. In addition, lots of people come on family based visas who end up working in science. H1B visas are significant, and there's several hundred,000 people with that visa, but relative to the overall size of the labor market or the um or even the scientific, we'll call them STEM workers, science, technology, engineering, math, H1B is not a huge share. That's not really what drives it. The other thing I think he doesn't quite understand is the average salary is of an H-1B visa holder isn't that different than the average salary of an American in that field. Now, there's lots of complicated wrinkles to that, but we don't find evidence that these are particularly highly productive, but the evidence that they work for less is not that strong in some places. Definitely happened. But um the the other problem I think is this whole idea that America's science education system stinks. Um remember STEM workers are only a few percentage points of the total labor force. If you look at Americans born here who are university grads in STEM fields, we have all kinds of surveys on this. They score just fine. They score as high or higher than their foreign counterparts. Yes, it's true that on average, American students score lower than students in many other countries on science and math, and that is a real problem. But it doesn't really affect the supply in the way that he seems to imagine of STEM workers overall because it's only a small percentage of the total labor force. And we seem to be producing a lot of people in that field who are US-born or at least permanent residents, not uh uh you know, not um not people who grew up here. You know, they came as kids and their parents have green cards, they become citizens, so they're foreign born and they go to American universities, too. But overall, we seem to produce very high quality STEM workers. And his discussion of that doesn't really appreciate that. It's only a small percentage. So it doesn't really the overall average in math and science isn't affected that much by our ability to produce high quality STEM people here. So there isn't actually. >> Yeah. >> So you're saying proportionately speaking there isn't actually a very high number of foreignb born uh students studying at top American schools who then end up graduating in the STEM field to work at tech tech companies. That that is >> no there yeah there is but most of them are not H-1B. Right. If there's if you're a foreign student in the United States and then go work at a tech company, you might have tried to then secured an H-1B visa. I see. But, you know, very often you found an employer to sponsor, you married an American, it's not the H1B program. In addition to that though, when we look at nativeorn Americans who still make up about 77% of all STEM workers in the United States, they score just fine on all the standardized tests, you know. So our US graduate chemists or physicists, mathematicians and so forth, we don't we don't find that they're not able to graduate and and and and do the work. Same with engineers. Usually what happens by the way is people move out of the STEM field because there's so much things that are so much more lucrative. So only about 23% of even foreign trained engineers who come to America stay work as engineers. They go out and work sometimes as supervisors. they work in financial services because they have quantitative skills. Um so a lot of people do move out of STEM fields but it has to do with the fact that they can just do better elsewhere because these are very these tend to be our most talented students. But the idea that America doesn't produce enough STEM students because our education system is lacking is not really supported by the data. The other thing that you have to keep in mind is we can look and we've done this a million times at my organization and many others at wage trends among the STEM fields whether it's engineering or mathematicians or physicists, chemists, whatever. And it doesn't show rapid wage growth. It shows their wage growth is very similar to other college graduates. If America was terribly short of STEM workers, we would expect rapid increase in their wages. We can even study their benefits packages. It doesn't show that either. So, um, there's just no evidence of a STEM shortage, and we do produce a lot domestically. Now, you still might want to get the best and the brightest from overseas. H-1B can sometimes give us that, but that's not really, it's much more for mundane sort of middle of the road people. Um, I'm looking at the stock market. The tech sector hasn't really moved on the news, so it doesn't seem like the markets believe that the tech sector is going to suffer tremendously because of this new announcement and change in policy. uh the the claim that um tech companies are on board uh which is what Trump said. Uh I'm not sure. Uh this is a tweet that Elon made in December 2024. Not exactly in response to this, but in response to something else. Uh the reason I'm in America along with so many critical people who built SpaceX, Tesla, hundreds of other companies that made America strong is because of H1B. My question is what will tech companies do uh now that uh the fee has gone up to 100k uh per applicant? This CNBC article claims that uh competing regions like the Middle East, Asia, and in places in Europe now stand to gain from a talent uh drain if this were to go on. Um can you comment on that? >> Well, we certainly always hear that, right? Um that well they'll just go elsewhere and there could be some truth to that. America remains extremely attractive because it's a very open society. It taxes higher income people at relatively lower rates than other places and it's one of the few places where you can come in on a temporary visa but eventually get a green card which many people like to do. Not everyone by any means. So it will remain attractive for immigrants but yeah I think it's going to make the program less attractive for employers. Um, it probably means that only the employers who really want to pay very high wages yet very productive people from overseas. But it probably does mean that if you have to have this 100,000 upfront cost that there will be fewer people coming in under the program and some of them may choose to go elsewhere. Uh especially well China has a lot of job opportunities but India maybe there'll be some of them who choose to go elsewhere. Um that that's a possibility but I think that's by design. The idea is um take the original point that the speaker that you showed um and I won't pronounce his name because I don't want to get it wrong but the Japanese American he was arguing look we have this weakness in our public education system but one response is yeah and part of the reason we don't fix it is we just keep bringing in foreign workers if American industry had to rely on what's here they'd be pressuring high schools and junior highs and and and American universities and graduate programs to educate better and to bring more people in uh you know bring more people along in in STEM fields. And if you want to correct the problem, the last thing in the world you want to do is keep wages lower, keep bringing in foreign workers. So one argument would be few let fewer people in, let wages rise, create the incentive to reform our education system if we think that's the problem. If we think there's a pipeline problem, if you never want the pipeline problem addressed, the argument goes, we'll just keep bringing in the foreign workers. >> The overall attempt to curb foreign workers from coming in, this is just part of that larger attempt. Is this going to cause wage inflation, especially among tech companies, Steve? >> Yeah, I mean, that is one question. Obviously, in a labor force of 165 million people, um, when you're talking about a few hundred,000 and if you take STEM work overall, you know, you're still talking about, depending on how you count STEM, at least 5 million. Um, it's not clear that it's going to have a huge impact on wages there, but it could have some. Uh, I think though that many people have said wages in those fields have not grown very fast, so that would be good, right? profits have been high. The CEOs make a lot more money, but the actual people who do a lot of tech work, their wages are kind of stagnant. Now, in terms of the larger question of lowering the level of immigration, the big impact that we may be seeing is that it looks like there's a big decline right now in workers more at the bottom end of the labor market because it looks like many of the people who are not showing up in the data anymore and presumably are leaving are uh illegal immigrants. We think that about 3/4 very very roughly of illegal immigrants have no education beyond high school. And there it looks like that's where the big fall off. But the good news is yeah, it could drive up wages. But the bottom even the bottom third of the US labor market accounts for such a small fraction of total economic output that even if those lower wage poorer workers got an increase in their salaries, it couldn't spike inflation because they only count for what? they account for less say the bottom third they account for like 15 18% of economic output so even if their wages went up like 10% it would be an it could be passed on to consumers as a low singledigit increase and many people and I think I count myself among would like to see people at the bottom end make more right one of the big problems we've all talked about in the last 40 years is people who have a high school degree or less or even just without a college degree haven't fared all that well in the US labor market. So if they did get a raise, we don't have to worry about inflation. And I think making lower income workers better off would be a sound public policy. I mean, if I could go on a little bit more on this because this is an area I do a lot of research on. The biggest problem in the US labor market is all the people not in the labor force. To be in the labor force, you have to work or say you're looking for work. And we have still a re a nearrecord number of people without a college degree who are of working age say 16 or 18 to 64 who don't work and they don't look for work. They are out of the labor force entirely and this is linked to huge social problems. The hope is with less immigration including illegal immigration we might see wages rise. We can draw some more of those people. It's primarily men, by the way. And the destructive behavior they engage in, everything from opioid addiction to crime that is linked to men out of the labor force is a super serious social problem. And and there's been a lot written on this, so I'm not and it's heavily concentrated among nativeborn men without a college degree. So, the hope is over time if illegal immigrants leave, then wages and benefits will rise, employers might become more patient, and we can at least draw a few million more of these guys back into the labor force. It's not going to be easy, but it could have a very uh cascading series of positive effects on American society. I mean, that's the hope. >> Okay. Tangential to the uh H1B uh visa issue is a new uh Trump gold card that promises to grant residency to people who pay up to a certain amount. I think it's a million dollars. Let's take a look at it. It's live now. Apply now. A $1 million contribution grants you the gold card. What is the legal status uh that you uh obtain? It's uh EB1 or EB2 visa holder status as soon as you get the gold card. So, what do you um what's your reaction? Yeah, it's supposed to be a modification in these investor visas, right? If you came and promised to invest X amount of dollars in the United States, then you could get a green card. And to remind your listeners again, the green card is permanent residency and after five years or so, you can become a citizen. So, this is essentially off auctioning off um American citizenship or permanent residency and citizenship. It used to be that you had to invest. they're sort of trying to change that to see that you um that you just pay the United States government a fee of a million dollars. And the criticism was with the EB5 is that there were all kinds of shenanigans and loopholes and you really didn't have to invest the money or it could be money that was already invested. And so this way uh it does have the virtue of being um simple and straightforward pay a fee. But the concern is or at least some concern. Well, there are two concern. One is has the program been modified in a legal fashion. Does the president, they have some legislation. We'll have to see what the courts say. I'll leave that to the courts. But the bigger question is, do you want to sell citizenship? And a lot of people say, "Darn right we should, right? We can make money for the public coffers." And other people say, "No, American citizenship shouldn't be about just uh selling it off to the highest bidder. We're a country. were not just a place to do business, right? So, you know, that'll be a debate. Um, but clearly this could be a new avenue in, but it's really just a modification of the existing green card program for investors, which isn't very large anyway. And most research suggests not that many people have the million dollars and want to come to the United States, but we'll see. >> Well, that brings my question to another um issue, and uh we'll go back to your research in just a minute. uh Trump wanting to end birthright citizenship since his inauguration. Where do you stand on this debate? >> Yeah. So, I think that most Americans would probably say, and I share it, there seems to be something wrong with the system that if a person is on a tourist visa and has a child here, that child is automatically a US citizen from birth. Um, most countries don't do that. If someone's illegally in the United States, has just come across the border and has a child here, the child is automatically a US citizen. This is kind of important because it it greatly complicates enforcement efforts. After all, if you want to send the parent home who's here illegally or you want the parent to honor the tourist visa, then you have a situation where it becomes more difficult or or what if the person goes home and now they have this child with very little tie to the United States. We see this with what's called birth tourism where people come have a child and then return. Russia is a big place where people do that. Some China, some India, but Russia t tends to be one of the biggest. And so now there's this person who didn't grow up in the United States, has no ties in the United States, no family in the United States, but has American citizenship and can return to the United States at any time as long as the parents, you know, register the birth properly. And I think that strikes people as odd. Most countries, but not all, in the world have moved away from such a system. Partly because the idea of birthright citizenship can make a lot of sense in an era where travel is difficult and you don't have a lot of tourism and you don't have a lot of illegal immigration. But that's not our situation today. And the idea is you would probably want to give the immigration status to the child that the parent have. However, there is a downside and you and that has to be thought about, which is that if you're not going to enforce your immigration laws, then you're going to have people who grow up here, right, and were born here and then you're going to try to send them back to a country they've never been, even if that country takes them. There's a certain unfairness to that. And that's another aspect. It's one of the consequences. If you tolerate large-scale illegal immigration for a long time, people worry about the exploitation of the illegal immigrant. They worry that they'll work for less and drive down wages. There are lots of things, but one of them is all the children. So, birth tourism plus illegal immigrants, you're looking at about 300,000 births a year. That's a lot. And it's worth thinking about. 7 8% of all births might fall into that category in the United States. So, not a trivial issue. And then, and over the years, it means you have millions of people who essentially join the United States. And the public didn't really consent to that. Our laws didn't really consent to that, but that's what happened. So, you can see the high level of dissatisfaction. But it would require reforming everything from how we let in the tourists to how much we enforce immigration laws cuz if you had fewer illegal immigrants, it wouldn't be as big a deal. >> All right, let's get to your research now. Center for Immigration Studies. Before we talk about uh the research itself, the tagline for the website I found quite interesting. Low immigration, pro-immigrant. Upon first glance, that might seem like an oxymoron. Can you just explain uh kind of the philosophy here? >> Yeah. Right. So, there was a commission in the 1990s by headed by Barbara Jordan, the first AfricanAmerican woman elected from the South. She was appointed by Clinton. And there was an immigration commission and they looked at immigration. And we share their perspective that the overall scale and size of immigration to the United States is too high, but that we also think it's important to work to integrate the immigrants. We haven't really favored things like cutting immigrants off from welfare or anything like that, legal immigrants. We think we should have every, you know, she said it this way, everybody who should get in should get in and everybody who shouldn't get in should be kept out and those who are here without authorization should be removed. And I think that essentially sums it up. And we think that so to help your listeners, the US gives about 1.1 maybe 1.2 million green cards a year. Um, it also allows in hundreds of thousand long-term temporary visas each year, visa holders, foreign students, guest workers, cultural exchange, that sort of thing. So, there are about 38 million of various kinds of legal immigrants, and that includes naturalized citizens in the United States. And then on top of that, you could debate this number. I would say most people agree it's between 14 and 16 million illegal immigrants. That doesn't count their children born here, but uh in the United States, so maybe 38 million legal, somewhere around 14, 15, 16 million illegal immigrants. And we think that is overwhelming the assimilation process. It's straining key social services. It's causing us, for example, to ignore serious social problems. As I mentioned, all those men out of the labor force um who uh we just don't have we don't care about because we just hire the immigrants instead. And I think we need to draw those folks in to help deal with those social problems. So overall I if we allow in say 11 12 million legal immigrants we think that number each decade we think each decade it should be more like 5 million. Uh and in terms of illegal immigration we need to do a lot more especially going after employers who hire illegal immigrants. So we need a work site verification an expansion of eerify system that we have right now. It's voluntary. So these are basically our position. But we don't think that um that we should do things like make it harder for people to become citizens. We don't we think we should help them become citizens and facilitate their acquisition of language. We think that we don't think it's a great idea to try to cut immigrants off from welfare programs and things like that. So that would be our more pro-immigrant um position. And we think that lower immigration would be good for all the immigrants here. It would mean less job competition. It would facilitate their assimilation. So, that's essentially our take. Um, a relatively unique take here in Washington. There's lots of groups arguing for more immigration, expansive immigration. There aren't many groups who think a more modest pace of immigration would make sense, but we're one of the few. >> Your research shows that the uh foreignb born population, both legal and illegal immigrants combined, declined by 2.2 million from January to this year to July. That's a huge number. >> What happened here? Was it just lower immigration or deportations or a combination of of the two? >> Yeah, it it means it probably means almost certainly that fewer people came in. >> It means that deportations were higher, but the main thing it means is illegal immigrants especially and immigrants generally. We we think about three4s of that decline seems to be among illegal immigrants. Um so it looks like the illegal immigrant population, some large fraction of it has gone home. Now, it's still, you know, that's not a huge fraction. 2.2 million is, you know, very roughly 10% maybe um, you know, something like that. Maybe a little more 12%. But, uh, so most of the 90% are still here presumably. But, um, because we think 1.2.2 is the total, 1.6, which is about 10% of the illegal population, uh, has gone home or got deported. So now it it it's a little complicated because people who are here illegally every year often also get legal status. So that's another way you can leave the illegal population. Um you can get asylum in some cases. You could marry an American. You could win the visa lottery. There are ways for illegal immigrants to become legal immigrants. Um those numbers are not trivial, but over such a short period of time, the main reason the numbers fell were illegal immigrants seem to have gone home. The big question which we can discuss is is it real? The data show it, but are they is it a illusion? Is it a statistical artifact if you will? It's not. They're still here. We're just not picking them up in the data anymore. And I you know >> Yeah. Go ahead. >> Yeah. Who are these 2.2 million people primarily and how will their departure or I guess lack of participation in this labor force now impact the labor force itself? >> Yeah. Right. So, we think they're mostly predominantly from Latin America. We think they're predominantly people without a college education. They're somewhat disproportionately men. Um, and that's who seems to have declined. And that is a population highly correlated with the illegal population. And when we dig a little deeper, it looks like it's very heavily people who are illegal immigrants mostly, but not entirely. People who've come in the last 10 years, the last 15 years. So, they're tend to be the newer ones. We have illegal immigrants who've been here a long time. these folks are are the newer. And what will it mean? Well, it'll reduce the supply of workers. And although we have, as I said, enormous numbers of people on the economic sidelines who are of working age, they're not even 65 yet, um, who are not working, not looking for work. So, it depends on how many of them we can draw back in, but it probably does mean higher wages. It means a tighter labor market for employers. Um, that can be good for if you're a worker, it could mean, especially at the bottom end where these people tend to be concentrated, it's good news for you, it means it increases your bargaining power. But if you're an employer, you may you may uh you may may not like it. If you're a consumer who's looking to hire someone at the bottom end market to fix your roof or to be a nanny, a maid, a bus boy, you're using those services. It could be bad if you're a taxpayer. The departure of lowincome immigrants who tend to be a fiscal drain is good. So, you know, you have to decide. Immigration is always about winners and losers. The big winner from immigration are the immigrants and employers. The big losers are workers who compete with them and taxpayers. This makes me this made me wonder, Stephen. Um, we know that the job growth numbers in America have slowed to the weakest pace since basically the pandemic. I wonder if the departure of some illegal immigrants um was not reported officially and so maybe employers are actually looking for more labor. They're just not officially posting uh you know wanted posters and ads, you know, shadow kind of labor market going on. Yeah, >> we have two sources of data. One is the one we've been talking about, the current population survey, which surveys people in their homes and says, "Hey, are you working? Are you here? Are you working?" And that's where we get the unemployment rate. It's all the people who say they're looking but haven't found something. The other source is what's called the um establishment survey where they go out and ask employers, hey, uh you know, how many people do you have in working? And that's the one that shows this big drop off in people in jobs. And um the uh the thing is the question here is uh is are we going to be seeing very little job growth in that survey of employers? And we probably are. Now that survey of employers only counts people who are covered by unemployment insurance. And a lot of illegal immigrants aren't. So they're not going to show up in that data. But a lot are illegal and most legal immigrants are vast majority. But it still looks like it looks like the immigrant workforce is down or immigrant workers is down by about a million. It looks like about 34 of that are illegal immigrants. A lot of those aren't paid off the books. They're not going to show up in those employer surveys. But the point is if illegal immigrants are leaving in the way that we think they are, then we are going to see much slower job growth employers because people are actually leaving jobs and we're actually seeing that in some other data as well. But the point is it's going to affect job growth numbers. But I said at the outset that doesn't mean the native born or legal immigrants are losing jobs. They could still be gaining jobs, but the net effect when you survey employers is little or no job growth. Even though the native born and the legal immigrants are doing just fine. Um so that is something you're going to have to keep an eye out for. It's also going to affect things like GDP numbers. Gross domestic product partly reflects labor. It's a key input. And if the immigrant illegal immigrants are leaving, it means a smaller GDP. They're they're they're leaving as consumers. They're leaving as workers. But it doesn't necessarily mean in any way a smaller per capita GDP, what each person has. And remember, it's really per capita, not aggregate GDP that matters. In the same way that we say that uh New Zealand is a lot richer than Bangladesh because it has a higher per capita income and Bangladesh does have a larger aggregate GDP. But that that doesn't really mean it's wealthier. And so the departure of people is going to probably cause a smaller GDP, but it won't necessarily be bad news unless what you want is bigger GDP in an aggregate not per capita sense. Does that make sense? >> Yeah. I'd like to respond to a uh research report um that basically argues for the other side saying that um fewer immigrants even illegally I I suppose though it doesn't specifically say illegal immigrants uh may adversely impact native born workers as well uh in the job market. Take a list listen to this report. It's from the um economic policy institute dated July of this year. Nearly six million jobs will be lost if the Trump administration carries out with its stated goal of deporting four million people over four years. The analysis finds uh every state will suffer job losses. California, Florida, New York, Texas and so on will have the highest number of job losses due to larger immigration population. This the uh logic here is because jobs held by US-born and immigrant workers are often complimentary and economically linked, the shrinking supply of immigrant labor can adversely affect employer demand for jobs held by both groups of workers. Uh if you open up the report itself, it says deportations sharply reduce the supply of labor, which we just talked about, threatening the ability of employers to generate revenue and pay for business expenses like rent, machinery, and even the labor of any remaining workers. immigrant labor supply will fall because immigrants tend to have high employment rates. So arresting, detaining, and removing immigrants from the country removes people from the workforce. I think the logic here, I think, is pretty self-explanatory. Remove part of the labor force, businesses start to slow, other people lose jobs, right? So you have to wonder, there's a couple things, right? Obviously, even in that report, it says most of the job growth, most of the job losses are are absorbed by the immigrants who leaves, which is the point, right? So you can't really criticize. You may not like mass deportations. You may not like immigration enforcement, but you have to at least accept that's the goal. So, uh, illegal immigrants leave and that means a lot of workers leave. So, that's the reality. The question is if illegal immigrants leave, can we fill any of those jobs with the USORN? So, we have millions of US-born people without a college degree on the economic sidelines. About 18 million men, for example, they're of working age, but they don't work. the it used to be the case it used to be the case that let me just even go back to 2000. If we could get the situation back to what it was in 2000 in labor force participation that is the share who work or at least look for a job we would add nearly 5 million men to the US labor market. If we could get it back to what it was in 1960 which probably is unrealistic it would add 9 or 10 million. But as I said at the outset this is a social disaster that these people are on the economic sidelines. By the way, this excludes people in prison and and if we could just get some of them back in. And now if you counted women, then you could add a few million more. Um their situation is somewhat more complicated and different. So the question here is what EPI who wrote that seems to be assuming is we can't raise wages. We can't draw more Americans back into the labor force. Uh and I very skeptical of that position. And the other thing they seem to be assuming is you can never substitute capital for labor. But for example, our agricultural sector is in some ways not as capitalized as those in other countries where they don't have illegal immigrant labor. So they use more machines and more labor saving devices and techniques. So I guess I would say there's a certain assumption of inflexibility in the US labor market. The US labor market I think is very flexible. It can absorb a lot of immigrants by reducing capital investment and by lowering wages or it could absorb fewer immigrants by making adjustments in wages and capital investment and drawing more people into the labor force. So I mean in some sense we are going to experience a social experiment here and see what happens. But I think it's worth it to drive up wages for the poor and the less educated in general and to try to draw more people back in the labor force. But I think there are a lot of businesses who would disagree and say I don't want to pay more. I can't pay more and we can't employ these people who are out of the labor force. Um I would say that's a very uh you know pessimistic view. I think I'm more hopeful that we will see higher wages. We will see more people in the labor force and we'll see more capital investment as well to increase productivity. So I mean really that's the core of the debate here. Can you know which is it you want? Do you want the biggest economy you can have with the most people, aggregate sense of working, biggest GDP, or do you want a higher paid economy and better labor force participation? I mean, I think that's some of, you know, the debate here. >> Okay. Ultimately, what is the direction that the economy is headed towards of the scenarios that you gave? >> Well, if I knew the answer to that, I wouldn't be working here, right? If I could um what did Yogi Bear say? It's tough to make predictions especially about the future. Well, I I wouldn't say. I think it's hard to say because we have this other variable, the the impact on on business confidence of the tariffs and I have no idea what that's going to be. I suspect you know way more about it than I do, but that's out there too. So, um the departure of immigrants will however mean lower GDP growth and lower job growth at least in the short term. It doesn't mean that the economy is worse off. American workers, American consumers are worse off. But it will mean that. So I think you got to look for that and accept that that's the case. But whether or not it means a bad economy, a rise in unemployment and all the other things, you know, stagnant or declining wages and all the other things that sometimes happen with the economy going south. I don't think that's going to happen. And I'm hopeful that what we're really going to see is increased wages, particularly at the bottom of the labor market, building, cleaning, and maintenance, construction, labor, maybe the farm sector. Um, these kinds of jobs, installation and moving jobs, these kinds of jobs where illegal immigrants have been heavily concentrated for a long time. I think we're going to see higher wages. And I would argue that that's a good thing. um not a bad thing, but it's a but obviously if I were an employer in that sector, I may think otherwise, but I think as an American, I think higher wages for the bottom end is good news. One final question, this came in from a producer, Dr. Matthew Milligan. He recently moved to Atlanta where um a large number of Latin American immigrants told him that they moved there initially in the mid 1990s to work on construction projects related to the um 1996 summer Olympic games. Many settled and stayed and they created their own little burrows within Atlanta. Does that story kind of match uh your research and data about how new immigration destinations are typically formed? >> Yeah, this is a great issue, right? We know sometimes refugee settlement agencies uh you know settle people. So that's a clear example and sometimes it's associated with a key employer whether it's a meat or poultry practicing plant or the furniture manufacturing industry that somehow begins to bring in a lot of immigrants. But how new areas of immigration get settled, right? How did Manasses uh Virginia in the 1990s become a huge area of immigrant settlement? I think that's not totally understood. It certainly follows patterns of the past. Immigration very much is partly at least uh you know based on what we call social networks. Some people call it uh you know um well social networks. And what it means is people go where their where their families are, where people from their home community, their home country are. And so that's one of the things that drives immigration to some areas and not others. But in general, immigrants tend to go, now it's my turn to cough. Um, into areas where job growth is good. We don't get a lot of immigrants in West Virginia because there's not We don't get a lot of job growth in Western Pennsylvania. Um, we don't get as many much immigrants in um in upstate New York. Again, job growth isn't that great. Even looking at the border, we get a lot of jobs, a lot of immigration to uh to Texas because a lot of jobs growth, but we don't get as many to New Mexico. although it too was right on the border, it too had a historical tie with Latin America because the economy of uh of New Mexico just never performed that well. And so I think that um that is something to think about. We would expect immigrants to go and they do where job growth is high but one of the things one of the consequences of that is it tends to shortcircuit the movement of nativeorn people. If the immigrants all come in, then the native born aren't going to be moving there. And what we've seen in the last two decades is a significant decline as immigration has increased a significant decline in native mobility within the United States. People don't leave New York State nativeorn people like they used to to go to Texas or California or Florida. As the immigrants arrive in an area, it tends to reduce the arrival of nativeorn people, which certainly suggests that there's job competition. In fact, we see evidence that when immigrants move into an area, the native born tend to move out. Now, they might move out for cultural reasons or impact on schools, but one of the assumptions or seems to be that they're worried about job competition, too. So this is another way that less immigration might benefit the country by restarting or increasing again that old geographic mobility as Americans move for greater uh you know economic opportunity that immigration kind of shortcircuited in recent decades. >> I do have one final question I'll let you go Stephen. How do you think AI is going to change immigration into the future? Presumably, if you think about it this way, if you if AI is to cut a lot of jobs, especially at the lower income tiers, uh across the world, not just across the US, across the world, wouldn't it be logical that a lot of countries would see a mass outflow of workers to the US or other parts of uh the developed world looking for jobs, but at the same time, these countries in the developed world will have fewer jobs to offer those same people, >> right? So, there's kind of a paradigm shift here. Yeah. So, let me answer it this way. I can't tell you what AI is going to do. Right now, it hasn't really eliminated a lot of jobs at the bottom end yet, but I think many people think it will. This highlights an important difference between trade and immigration. Sometimes people see them as the same thing. When you bring in any good or service, right, you are in effect importing the labor that made it and immigration imports labor. So, the idea is that they are very similar. But this points to something very different. If you import the labor through uh an import of a good or service, you can then next year import less of it. If you decide, look, we don't need as much, we don't want this as much, immigration more or less permanently or fund in a much more fundamental way changes the supply of labor. And if technology changes in the way that you're suggesting and you find you don't need that labor, well, now you have the very painful problem of trying to say, well, not only people can't come, but we have to make some of these people go home. And people are people and um they are entitled to be treated in certain ways as human beings. Whereas just importing fewer cars next year or radios or computer chips is easy. You could just say, "Okay, we're not going to take them." And this does suggest that although both immigration and trade offer uh you know um increase the effective supply of labor in your country, >> they are fundamentally different. Inanimate objects are not people and that's something to think about. The inanimate object doesn't reshape your culture. It doesn't um create fiscal demands on your hospitals and schools. Now also the immigrants pay taxes. So that's important. But in other words, that I think is sort of what you're getting at. What if we get a big technology change? Yeah. And um we've let so many people in and that means now you have to deal with the question, what do you do now? Whereas if you just had trade, you don't have to deal with that question. >> Yeah. All right. Thank you very much, Stephen. Where can we learn from you and read your work? >> Yes. CIS.org like center forimmigration studies.org. Everything's there for free for download. >> All right. We'll put the link down below. Make sure to check that out. Appreciate your time, Stephen. Good talk. We'll speak again soon. Take care for now. >> Thanks for having me. >> Thank you for watching. Don't forget to like and subscribe.