President Donald Trump should abandon his merit immigration reform and simply let employers import cheap workers to ensure profitability, the Wall Street Journal recommends.
The newspaper’s Editorial Board declared August 4:
Senators Tom Cotton of Arkansas and David Perdue of Georgia have introduced legislation that would eliminate the green-card preferences for parents, adult children and siblings of U.S. citizens, which in effect would reduce legal immigration by 40%. Foreigners could also apply for up to 140,000 green cards via a government admissions process that awards points based on education, language ability, age, educational attainment and job skills …
[But] any point system is also arbitrary and reflects the biases of politicians—namely, Messrs. Cotton and Perdue—rather than the needs of employers … Employers have a better idea of the skills they need than does the Labor Department bureaucracy …
Every economist knows that employers can only raise wages as fast as productivity and profitability allow. If the cost of labor rises too much for a specific job, employers will simply cease providing the service or move production overseas. That means fewer jobs for Americans too …
The solution, as ever, is a legal immigration system that is generous with visas and flexible enough to meet the demands of a growing U.S. economy. If the White House is serious about passing something in Congress, it needs to recognize that reality.
Read it all here.
The editorial does not mention the increased demand by Wall Street, investors, and business for more imported consumers.
Trump’s very popular reform would halve low-skilled immigration, while also inviting a smaller inflow of very skilled immigrants to help Americans grow the nation’s productivity and per-person wealth.
Under pre-Trump policies, the federal government annually imports 1 million legal immigrants into the United States, just as 4 million young Americans turn 18. The annual inflow has kept Americans’ wages down, and has now created a country-sized population of roughly 40 million consumers.
The federal government also annually awards roughly 1.5 million temporary work permits to foreigners, grants temporary work visas to roughly 500,000 new contract workers, such as H-1B workers, and also largely ignores the resident population of eight million employed illegal immigrants.
The current annual flood of foreign labor spikes profits and Wall Street values by cutting salaries for manual and skilled labor offered by blue-collar and white-collar employees. It also drives up real estate prices, widens wealth-gaps, reduces high-tech investment, increases state and local tax burdens, hurts kids’ schools and college education, and sidelines at least 5 million marginalized Americans and their families.