A recent report published by Bloomberg raised great concerns about the potential economic consequences of Donald Trump’s promise to deport millions of irregular immigrants from the United States if he wins the upcoming presidential elections in November.
The promise made by Trump is not new to his political agenda, but this time it comes in circumstances that may carry serious repercussions on the American economy, which is increasingly dependent on immigrant labor, especially after the Corona pandemic.
Deportation…lessons from history
Bloomberg says that economic analyses, especially those based on history, highlight the negative effects of these policies. The National Bureau of Economic Research report showed how similar policies in the late 19th century negatively affected the American economy.
During that period, the United States took strict measures to deport Chinese workers who contributed significantly to the construction of the Transcontinental Railroad, under the “Chinese Exclusion Act” passed in 1882.
This decision led to a reduction in the number of Chinese workers by 64%, which directly affected the country’s Western economy, according to Bloomberg.
The analysis showed that sectors that were primarily dependent on Chinese labor witnessed a decline in industrial production by 62%, and that the negative impact also affected white workers, as the percentage of white workers who were moving to the West to work decreased by about 28%.
Immigrant labor and the American economy
At present, the American economy relies heavily on immigrant labor, especially after the Corona pandemic, which witnessed a rise in the numbers of irregular immigrants.
According to a previous report published by Bloomberg, the Congressional Budget Office indicated that this massive influx of immigrants will contribute to strengthening the American economy by about $7 trillion over the next decade.
Reports also indicate that the increase in immigrant labor was behind the strong growth witnessed recently in the American labor market.
At a time when the world witnessed a cycle of tightening monetary policies by the Federal Reserve (the US central bank), the American labor market remained unexpectedly strong thanks to immigrants.
Unintended consequences
Although Trump’s promised mass deportation may be popular among some voters, history warns of its dire economic consequences. Mass deportation will lead to a reduction in the size of the workforce, which may negatively affect many industrial and agricultural sectors that rely heavily on migrant labor.
According to the report, implementing this promise will inflict huge losses on the American economy, as the country will have to finance massive deportations, in addition to bearing the consequences of declining productivity and slowing economic growth.
Moreover, the Bloomberg report indicated that illegal immigrants contribute to alleviating financial pressures on public resources, especially highly skilled immigrants who contribute to paying taxes and providing important support to the national economy.
