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Donald Trump’s Immigration Plan Boosts Wages, Cuts Unemployment, Says Hillary Clinton’s Wall Street Donor

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Donald Trump’s immigration and labor reform policies would force down unemployment, pressure companies to raise Americans’ wages and salaries, and even make housing cheaper for young families, according to a supposedly critical report by Moody’s Analytics now being cited by Trump’s critics, including Hillary Clinton.

“As the immigrants leave, the already-tight labor market will get tighter, pushing up labor costs as employers struggle to fill the open job positions,” the report acknowledged. “Mr. Trump’s immigration policies will thus result in … potentially severe labor shortages, and higher labor costs,” the critical report promises.

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The formal unemployment rate would immediately drop by a third, from 5 percent in 2016 to 3.5 percent in 2017, the report predicts. Housing prices would drop by almost 4 percent in 2018 and 2019, says the Moody’s report.

The prediction complements Trump’s repeated populist argument on the campaign trail that large-scale immigration slashes Americans’ salaries.

Similarly, Trump’s immigration and labor reform plan repeated the charge;

Real immigration reform puts the needs of working people first – not wealthy globetrotting donors. We are the only country in the world whose immigration system puts the needs of other nations ahead of our own. That must change. Here are the three core principles of real immigration reform

Despite Moody’s good news for working-class and middle-class Americans  — whose income and wages have been flat for decades — the report is actually being used by Democrats to slash at Trump.

For example, the New York Times reported Tuesday that “Hillary Clinton’s speech attacking Donald Trump’s economic proposals on Tuesday mentioned a new analysis that says his ideas — if enacted in full — would bring about a ‘lengthy recession’ by the end of his first term.”

The report likely gets the attention of top-level Democrats because it suggests Trump’s reforms would shift wealth from Clinton’s backers on Wall Street to Trump’s backers in Main street. For example, the report claims stock prices would tumble by almost 30 percent by the end of 2019, partly because the departure of the illegal migrants would force up salaries and also reduce the number of taxpayer-supported consumers.

If the market drops, the temporary loss of paper wealth among Clinton’s Wall Street donors would be huge.  But the Moody’s report also shows the stock market rocketing upwards after 2018, by roughly 40 percent from 2019 to 2021.

Much of Moody’s predicted harm, however, seems to come from Moody’s assessment of Trump’s plans for a huge income-tax cut. That would likely boost the deficit and sharply raise interest rates from less than one percent up to 6.3 percent in 2018, the report says.

The report was prepared by Mark Zandi, a long-standing, self-declared Democrat and an advocate for Democratic policies. In June 2015, for example, he donated the legal maximum of $2,700 to Clinton’s campaign.

In 2009, Zandi predicted Obama’s financial stimulus would produce 5.6 million extra jobs by 2012. That goal was not reached until 2015, five years after the GOP regained their House majority and began slowing Obama’s big-government priorities.

Trump’s tax plans include an increased tax on capital gains, up to 20 percent, which would directly hit Wall Street ‘s short-term investors and bankers.

The report undermines itself by saying that Trump’s promised 2017 reform of the labor market — also known as the repatriation of perhaps 11 million foreign migrants — would mimic the results of Arizona’s 2004 and 2008 reforms, which were analyzed in a 2016 Moody’s report.

But that earlier Moody’s report presented nothing but good news for the state’s labor reformers and for the blue-collar and white-collar Americans whose salaries shot up after the reform.

Arizona’s labor and immigration reforms began in 2004, and the state’s population of roughly 450,000 illegals gradually dropped by roughly 180,000 people from 2007 to 2012, the WSJ reported in February.

Because of the 40 percent drop in illegal labor, the wages earned by Americans rose significantly, said the analysis by Moody’s Analytics. According to the Wall Street Journal:

The median income of low-skilled whites who did manage to get jobs rose about 6% during that period, the economists estimate … wages rose about 15% for Arizona farmworkers and about 10% for construction between 2010 and 2014 … Some employers say their need for workers has increased since then, leading them to boost wages more rapidly and crimping their ability to expand … graduates [at a federal job-training center] now often mull two or three jobs offers from construction firms and occasionally start at $14.65 an hour instead of $10 …  At DTR Landscape Development LLC, the firm’s president, Dick Roberts, says he has increased his starting wage by 60% to $14.50 an hour because he is having trouble finding reliable workers.

The departure of foreign migrants also cut the state government’s welfare costs by roughly $430 million per year, the WSJ reported.

The number of students enrolled in intensive English courses in Arizona public schools fell from 150,000 in 2008 to 70,000 in 2012 and has remained constant since. Schooling 80,000 fewer students would save the state roughly $350 million a year, by one measure … annual emergency-room spending on noncitizens fell 37% to $106 million, from $167 million. And between 2010 and 2014, the annual cost to state prisons of incarcerating noncitizens convicted of felonies fell 11% to $180 million, from $202 million.

Housing costs also dropped, making it much easier for better-paid young Americans to marry, have children and launch themselves into a middle-class life. That’s likely a long-term boon for the local GOP, because family homeowners are much more likely to vote GOP.

“It was like, ‘Where did everybody go?’ ” says Teresa Acuna, a Phoenix real-estate agent who works in Latino neighborhoods. Real-estate agent Patti Gorski says her sales records show that prices of homes owned by Spanish-speaking customers fell by 63% between 2007 and 2010, compared with a 44% drop for English-speaking customers, a difference she attributes partly to financial pressure on owners who had been renting homes to immigrants who departed.

The rising wages and loss of cheap labor also forced local companies to invent or buy new machinery that will boost productivity and allow farms to beat their low-wage, labor-intensive, foreign competition.

After Arizona passed a series of tough anti-immigration laws, Rob Knorr couldn’t find enough Mexican field hands to pick his jalapeño peppers. He sharply reduced his acreage and invested $2 million developing a machine to remove pepper stems. His goal was to cut the number of laborers he needed by 90% and to hire higher-paid U.S. machinists instead …

He says mechanization is his future. He continues to pour time and money into a laser-guided device to remove stems from peppers, which pickers now do by hand in the field. Another farmer in the area developed a mechanical carrot harvester.

Mr. Knorr says he is willing to pay $20 an hour to operators of harvesters and other machines, compared with about $13 an hour for field hands. He says he can hire skilled machinists at community colleges, so he can rely less on migrant labor.

All those economic, social and technological benefits emerged from only a 40 percent drop in illegal population caused by the state’s modest reforms that Trump is now pitching to all Americans.

Trump has also called for a one-year or two-year pause in legal immigration. That would cut the supply of new labor in those years by roughly 20 percent, further forcing up wages and high-tech investment. Currently, the federal government allows 1 million foreign wage-cutting migrants to enter the United States each year, even though 4 million young Americans enter the weak job market each year.

Trump has also called for reforms to the white-collar guest-worker programs, which would also increase salaries for American college-grads.

Moody’s report echoes the 2013, report by the Congressional Budget Office, which predicted that the much-touted “comprehensive immigration reform plan” would shift national income from wage-earners and from salary-earners over to Wall Street investors. That plan is a mirror image of Trump’s pro-American labor reforms, because the 2013 plan sharply increased immigration and the use of cheap guest-workers.

The 2013 cheap-labor plan was strongly supported by GOP House Speaker Paul Ryan, who is now opposing Trump and his labor reform plans.


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