Big Businesses Warn: Trump’s Immigration Reforms Will Hurt Food Stamp, Medicaid Enrollment

SANTIAGO NILTEPEC, MEXICO - OCTOBER 29: Some of the thousands of Central American migrants look at a map after arriving into the small town of Santiago Niltepec on October 29, 2018 in Santiago Niltepec, Mexico. Following a break on Sunday, the migrants, many of them fleeing violence in their home …
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Investors are asking judges to block President Donald Trump’s “Public Charge” immigration reform because it will reduce their revenues from imported poor, unhealthy, and unskilled customers.

The likely rejection of poor and unhealthy migrants required by the Public Charge rule will hurt business revenues, says the January 16 plea to federal judges by numerous companies, investor groups such as Mark Zuckerberg’s, and advocacy coalitions, such as the blue-chip Compete America coalition:

Because [green-card applicants] will receive fewer public benefits under the Rule, they will cut back their consumption of goods and services, depressing demand throughout the economy …

The New American Economy Research Fund calculates that, on top of the $48 billion in income that is earned by individuals who will be affected by the Rule—and that will likely be removed from the U.S. economy—the Rule will cause an indirect economic loss of more than $33.9 billion … Indeed, the Fiscal Policy Institute has estimated that the decrease in SNAP and Medicaid enrollment under the Rule could, by itself, lead to economic ripple effects of anywhere between $14.5 and $33.8 billion, with between approximately 100,000 and 230,000 jobs lost … Health centers alone would be forced to drop as many as 6,100 full-time medical staff.

Trump’s “public charge” regulatory reform is intended to deny green cards to the poor, unhealthy, or unskilled migrants who may depend on taxpayer-funded welfare, aid, and medical care.

For example, it would likely deny green cards to many aging parents of new immigrants, such as the parents of many Indian H-1B workers who were sponsored for green cards by the technology companies who are represented by The regulation would also deny green cards to many unskilled migrants who would compete for the jobs sought by unskilled Americans, such as blue-collar employees who were not able to graduate from college.

The corporate “amici” plea does not declare that investors have a right to a government-delivered inflow of foreign workers and consumers. But it does encourage judges to reject Trump’s Public Charge rule because it will disadvantage employers and investors:

By hindering immigration—including the movement of highly-skilled immigrants—the Rule will slow economic growth, prevent businesses from expanding, and break faith with core American values. This is bad policy for American businesses and American taxpayers, and amici have a vital interest in ensuring that the Rule is properly held unlawful.

The brief ignores the flip side of the claim that immigration boosts investors — which is that immigration reductions can raise employees’ wages and reduce their housing costs. The brief also ignores the evidence that immigration transfers wealth and political power from young employees to older, wealthier investors, and from heartland states to coastal cities.

But the regulation has been blocked by judges, prompting the administration to ask the Supreme Court to remove the block until the lawsuit has been finally decided.

The legal brief is entirely clear about the economic interests of the business groups:

The net effect of this Rule is a very substantial restriction on most forms of legal immigration … This will be extraordinarily harmful for America: Employers will be unable to hire the talent they need, resources will be wasted complying with these onerous new regulatory requirements, and public health and economic growth will suffer.

The administration’s rule will reduce the payoff from hiring foreign visa workers via programs such as the H-1B, L-1, and Optional Practical Training programs, according to the legal brief. The programs allow companies to hire more than one million foreigners who will accept low wages from their employers because they expect to get extremely valuable green cards from American citizens:

American businesses depend upon an efficient immigration system to ensure that they have access to the talent that they need to grow and succeed … The Rule, however, would restrict American businesses’ ability to hire foreign-born workers, because, under the Rule, many skilled workers who would otherwise have been eligible for permanent residency would now be barred from receiving it.

the talent pool— of both citizens and noncitizens—available to American employers is likely to be drastically reduced, with far-reaching consequences for American competitiveness

The inflow of foreign graduates is also at the center of the S.386 debate in Congress, partly because the imported graduates are being put into many good jobs that are sought by American graduates. The proposed S.386 law would dramatically expand the inflow of Indian graduates into a wide range of white-collar jobs.

The legal brief also argues that the public charge machine will slow the nation’s economic growth. Reduced growth would be a loss to investors who make money by lending the money used to create or expand businesses, regardless of how many extra Americans get better-paying jobs:

 If admitted to the United States and allowed to remain as permanent residents, those individuals [who may be excluded] would pay taxes, contribute the value of their labor to the workforce, and purchase goods and services from American businesses— thereby boosting economic growth.

The magnitude of this effect is enormous: One study calculates that “for every 1 percent increase in [the] U.S. population made of immigrants, GDP rises 1.15 percent.”

Taxpayers’ near-term welfare costs are illusory because the costs are eventually recovered by tax collectors, the legal brief says:

But any reduction in benefits payments to noncitizens under the Rule is a “solution” to a problem that does not exist. Study after study has found that immigrants provide more in tax revenue to federal, state, and local governments than they use in benefits. For example, a leading study by a panel of experts at the National Academy of Sciences examined two decades of data and concluded that immigration produces net economic and fiscal benefits to the United States. The study found that the average immigrant has a positive long-run fiscal impact of approximately $53,000, using a 75-year timespan and the future path of taxes and spending projected by the Congressional Budget Office.

But the academies‘ report also says on page 433 that unskilled migrants cost Americans at least $219,000 over 75 years, while foreign graduates pay $318,000 more in taxes than benefits during a 75-year period.

The brief also complains that the Public Charge rule will exclude many poor and unskilled migrant workers:

These effects are not speculative: The restrictions in the Rule will bar large numbers of workers from permanent residency. The Migration Policy Institute has calculated that some 56 percent of legally present immigrants who arrived in the last five years have incomes below 250 percent of the Federal Poverty Guidelines and thus could be denied permanent residency under the Rule.

The legal brief wraps this self-serving economic agenda in the Cold War’s notion of a “Nation of Immigrants” theme:

Most troublingly of all, the Rule would spell an end to a bedrock principle of America’s immigration system—that immigrants should not be shut out of the opportunities available in America because they have not already achieved a certain level of wealth. By closing the door to immigrants who are not deemed to be sufficiently well off, the Rule all but ensures that the next Alexander Hamilton, Andrew Carnegie, or Indra Nooyi will not become an American. The Court should reject this arbitrary, capricious, and unconscionable regulation.


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