Business to Supreme Court: Ending DACA Amnesty Will Boost Americans’ Wages

Amnesty for DACA
Eric Baradat/AFP/Getty Images
Neil Munro

Business groups asked the U.S. Supreme Court to uphold the DACA amnesty for 650,000 illegals — but their plea to the court cites two studies that predict Americans’ wages will rise if the DACA illegals are sent home.

“History confirms that forcing Dreamers out of the workforce will reduce job growth and harm the U.S. economy,” says the legal plea submitted to the court on October 4 by 143 business associations and companies:

After Arizona passed the Legal Arizona Workers Act (LAWA) in 2007, which targeted the use of unauthorized workers, economic growth fell, reducing job opportunities. The State’s total employment was 2.5 percent less than what it would have been without the law, and its GDP was reduced by an average of 2 percent a year between 2008 and 2015.

The legal brief attributes the  data to a 2016 article in the Wall Street Journal, which was titled, “The Thorny Economics of Illegal Immigration.” But the business groups hid the article’s main conclusion: Fewer illegals ensure more pay for Americans:

Economists of opposing political views agree the state’s economy took a hit when large numbers of illegal immigrants left for Mexico and other border states, following a broad crackdown. But they also say the reduced competition for low-skilled jobs was a boon for some native-born construction and agricultural workers who got jobs or raises, and that the departures also saved the state money on education and health care. Whether those gains are worth the economic pain is the crux of the [political] debate.

Donald Trump won that political debate in 2016 when he was elected on a promise to cut illegal immigration and raise wages.

The 2016 WSJ article showed the pay gains for Americans in Arizona:

a worker shortage began surfacing in industries relying on immigrants, documented or not. Wages rose about 15% for Arizona farmworkers and about 10% for construction between 2010 and 2014, according to the Bureau of Labor Statistics. Some employers say their need for workers has increased since then, leading them to boost wages more rapidly and crimping their ability to expand.

…

Carlos Avelar, a placement officer at Phoenix Job Corps, a federal job-training center, says graduates 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.

…

[Farmer Rob Knorr] 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.

“I can find skilled labor in the U.S.,” he says. “I don’t have to go to bed and worry about whether harvesting crews will show up.”

The Supreme Court’s judges will host a brief public debate on the legal arguments on November 12.

The legal plea by business also claims that “studies have found that DACA has not had any significant effect on the wages of U.S.-born workers.” That claim cites a 2018 report sponsored by a German group, which admits that DACA does cut Americans’ salaries, although by a small margin:

The largest effects entail a 0.04% reduction in the wages of high school graduates (age group 2) and a 0.02 percent reduction in the wages of workers with some college (age groups 1 and 2). Column 3 aggregates these figures by education group, weighting each age-education group by their age shares by education (from column 2). The resulting figures show 0.01% drops in the wages of high-school graduates and individuals with some college, and practically zero effects on the wages of workers at the top and bottom of the education distribution.

The business groups want to block the higher pay that would be delivered by ending DACA. So their legal brief offers billions of dollars to governments if they agree to shortchange Americans, saying:

… tax revenues will be reduced by approximately $90 billion, over the next decade … Dreamers and their households pay $5.7 billion in federal taxes and $3.1 billion in state and local taxes annually.24 In 41 states and the District of Columbia, the state and local tax contributions of Dreamers’ households total more than $1 million annually; in 35 states, their contributions are more than $10 million; and in 12 states, they are more than $50 million.

But the WSJ article also showed how fewer illegals generate huge savings for taxpayers and governments;:

…government spending on immigrants fell. State and local officials don’t track total spending on undocumented migrants or how many of their children attend public schools. But 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.

During that same period, 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.

The legal brief also claims that companies actually need the roughly 650,000 DACA illegal workers because employers simply cannot find Americans for unfilled jobs.

This ‘can’t-find-workers’ claim is an example of “Frozen Labor Fallacy.”

The unspoken idea pretends that companies are somehow unable to hire any of the 160 million Americans who are already employed by other companies, even with offers of higher wages, more training, and better benefits. The legal plea claims:

DACA recipients are filling vacancies at companies that otherwise would not be able to attract workers for open positions.

…

U.S. job creation has been outpacing supply. As a result, the U.S. unemployment rate is currently quite low, and the number of job openings is high. In June 2019, the U.S. had 7.4 million job openings, but only 6 million people looking for work. Sixty-four percent of small business owners reported hiring or trying to hire workers, but of those, 89 percent reported having “few or no ‘qualified’ applicants.”

The 2016 Wall Street Journal article is based on an economic study by a Wall Street analyst, Mark Zandi. In 2016, he touted Hillary Clinton while warning that Donald Trump’s policies would produce an economic nightmare of rising wages and cheaper houses:

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 … Mr. Trump’s immigration policies will thus result in … potentially severe labor shortages, and higher labor costs.

Numerous establishment companies and groups signed the legal plea:

The Business Software Alliance, the U.S. Chamber of Commerce, the American Hotel & Lodging Association, the Information Technology Industry Council, the National Association of Manufacturers, the National Retail Foundation, Amazon.com, Best Buy, Cisco Systems, Door Dash, Facebook, Google, IBM, Intel, Lyft, Marriott International, the Niskanen Center, Starbucks, Target, Uber, Verizon

The plea says:

At least 72 percent of the top 25 Fortune 500 companies employ DACA recipients—including IBM, Walmart, Apple, General Motors, Amazon, JPMorgan Chase, Home Depot, and Wells Fargo, among others—as do many others, including Uber and Lyft.

The business plea does offer a few legal reasons to support the DACA amnesty:

The rescission of DACA—like all agency action— is subject to review under the APA unless it falls within one of two narrow exceptions: “(1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law.” 5 U.S.C. § 701(a).

…

The decision to rescind DACA rested on a legal determination: DHS’s conclusion that the program exceeded the agency’s statutory authority. Because that conclusion constituted a change in position—the government had previously stated that DACA was lawful—DHS was required to provide “a reasoned explanation for the change” in position.

But the vast majority of the plea is the demand by business that the judges supply them with more and cheaper workers:

At least 72 percent of the top 25 Fortune 500 companies employ DACA recipients—including IBM, Walmart, Apple, General Motors, Amazon, JPMorgan Chase, Home Depot, and Wells Fargo, among others—as do many others, including Uber and Lyft.9 Those

Dreamers also consume the goods produced and services provided by U.S. companies—contributing to the growth of those companies and the economy as a whole.

…

If this Court permits the DACA rescission to take effect and thereby end Dreamers’ work authorization, companies will face an estimated $6.3 billion in costs to replace Dreamers—if they can even find new employees to fill the empty positions

The case is Department of Homeland Security v. Regents of the University of California, No. 18-587. The judges may announce their decision by the end of June.

Immigration Numbers:

Each year, roughly four million young Americans join the workforce after graduating from high school or a university. This total includes about 800,000 Americans who graduate with skilled degrees in business or health care, engineering or science, software, or statistics.

But the federal government then imports about 1.1 million legal immigrants and refreshes a resident population of about 1.5 million white-collar visa workers — including approximately one million H-1B workers and spouses — and about 500,000 blue-collar visa workers. The government also prints more than one million work permits for new foreigners, and rarely punishes companies for employing illegal migrants.

This policy of inflating the labor supply boosts economic growth and stock values for investors. The stimulus happens because the extra labor ensures that employers do not have to compete for American workers by offering higher wages and better working conditions.

The federal policy of flooding the market with cheap, foreign, white-collar graduates and blue-collar labor shifts wealth from young employees toward older investors. It also widens wealth gaps, reduces high-tech investment, increases state and local tax burdens, reduces marriage rates, and hurts children’s schools and college educations.

The cheap-labor economic strategy also pushes Americans away from high-tech careers, and it sidelines millions of marginalized Americans, including many who are now struggling with drug addictions.

The labor policy also moves business investment and wealth from the Heartland to the coastal cities, explodes rents and housing costs, undermines suburbia, shrivels real estate values in the Midwest, and rewards investors for creating low-tech, labor-intensive workplaces.

But President Donald Trump’s “Hire American” policy is boosting wages by capping immigration within a growing economy. The Census Bureau said September 10 that men who work full-time and year-round got an average earnings increase of 3.4 percent in 2018, pushing their median salaries up to $55,291. Women gained 3.3 percent in wages, to bring their median wages to $45,097 for full time, year-round work.

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