Mark Zuckerberg’s amnesty advocates report that the pending reconciliation amnesty will deliver a huge windfall to the wealthy coastal states — but will offer little to midwestern states, small northeastern states, and the southern states.
The report, inadvertently, also spotlights the painful reality that migration skews regional wealth in the United States by minimizing incentives for coastal investors to create jobs outside their home states. With plenty of job-seeking legal and illegal migrants clustering on the coasts, investors in New York and California have little or no incentive to hire people in the middle of the nation.
The report by Zuckerberg’s FWD.us advocacy group for investors said:
FWD.us estimates that the U.S. economy would increase by $121 billion annually if Dreamers, TPS holders, farmworkers, and undocumented essential workers were U.S. citizens, including multi-billion expansions in a dozen state economies.
The promised windfall is based on the claim that the four-sided amnesty allows millions of illegal migrants to earn higher wages. With higher wages, they would spend more in local shops and create additional jobs in retail and other sectors. “The numbers are clear: creating a pathway to citizenship for undocumented immigrants will grow the economy,” says the July 26 post, titled “Including immigration in the budget reconciliation process could expand the economy by billions of dollars.”
Breitbart News examined the ten-year forecast by FWD.us. The forecast is missing some data, and the wage gains for some states are too small to count. But the promised gains seem to be based on the weak claim by pro-migration activists that four categories of amnestied workers will see wage gains of up to 15 percent.
Zuckerberg’s deputies posted the data even though it shows the promised windfall gains will overwhelmingly go to a few coastal states where employers and investors have already hired millions of illegal migrants.
Half of all the promised annual windfall, or $62 billion, would go to the top four states — California and New York, Texas and Florida — according to the FWD.us data.
Ten midwest states — not including Illinois — will get roughly $3.8 billion extra in annual payroll if the FWD.us data is correct. But that windfall is less than one-quarter the per-capita windfall for the three West Coast states of California, Oregon, and Washington.
Nine southern states — not including Texas or Florida — with a population of 58 million, would get about $15 billion in extra payroll. That would be less than half of the per-capita windfall for New York and California.
Roughly $45 billion in wage gains would flow to the 22 GOP states with two Senators, according to the data. But two-thirds of the promised spending gain in GOP states would go to Florida and Texas, leaving 20 other GOP states with just about $15.7 billion in promised extra spending per year for a population of 70 million. So the 20 GOP-run states would get just perhaps 39 percent of the promised benefit, per capita, as the big four states, according to the FWD.us data.
Roughly $66 billion in wage gains would flow to the 22 Democratic states with two Senators, according to FWD.us prediction. But half would go to New York and California. So the other 20 Democratic-run states would get just half the promised windfall per capita as New York and California, according to the FWD.us data.
NEW: Several states would make significant economic gains if undocumented immigrants—including Dreamers, TPS holders, farmworkers, and essential workers—were U.S. citizens, w/ multi-billion dollar increases being made to the economies in TX, CO, AZ, and NY https://t.co/omxBBIvgIu pic.twitter.com/gFy8rUtkUS
— FWD.us (@FWDus) August 6, 2021
Zuckerberg and his investor allies at FWD.us are leading the 2021 push for more migration and amnesty. The investor group is not just looking for extra workers — it wants more migrants because they also serve as consumers and renters.
The breadth of investors who founded and funded FWD.us was hidden from casual visitors to the group’s website sometime in the last few months. But copies exist at the other sites. The 2013 founders included Zuckerberg, Microsoft founder Bill Gates, John Doerr at Kleiner Perkins, Matt Cohler at Benchmark, and Breyer Capital CEO Jim Breyer.
The FWD.us report provides little explanation for the amnesty windfall. But FWD.us has touted a report by the Center for American Progress which claims that amnestied migrants get a 15 percent wage gain.
“We just don’t know what the wage gains are,” warned Steven Camarota, the Research director at the Center for Immigration Studies. “They might be very modest because the vast majority of illegal immigrants already have Social Security numbers [for various reasons],” he said.
Some part of any wage gains will be sent home to families in foreign countries, some migrants may stop working, and some migrants will flood into better-paid sectors to compete for jobs held by American workers, he said. Also, “amnesty will only lead to more illegal immigration … [and] eventually the amnestied people can sponsor more relatives, bringing in ever more job competition for the native-born,” he added.
Also, wage gains — and new migrants — will intensity competition for good housing, so redirecting wages into the hands of real estate investors.
And even if the nationwide gains promised by FWD.us are correct, they would be a very small percentage gain to the nation’s $21.5 trillion economy, Camarota added. An annual gain of $121 billion “is not even one percent, even a half a percent of GDP, it’s so tiny that it is within any kind of error margin,” he added.
But FWD.us’ skewed distribution of the promised gains spotlights the often-ignored impact of migration on regional wealth and development in the United States.
The incentives for coastal investors are the key driver of this regional disparity.
The inflow of new migrants — roughly 1 million legal migrants per year, but perhaps 2 million legal and illegal migrants in 2021 — ensure that the coastal investors face little or no pressure to recruit or train U.S. workers in the distant heartland states, or even in the small towns outside the major urban centers favored by the investors. This skew is recognized in the academic literature as “local bias.”
Migrant labor has no civic or social roots in the United States, so it immediately heads towards the jobs created by coastal money. This rational decision by migrant labor means that coastal investment does not have to move towards the huge pools of domestic labor that Americans birthed, raised, educated, and rooted in towns and cities around the nation.
More migration also means that the investors can hire cheap foreign labor instead of investing in labor-saving, wage-boosting robots for use by Americans. That government-created, migrant-enabled policy then sucks wages, taxes, and wealth — and lives — from many rural communities and sends the heartland wealth back to coastal investors and their shareholders.
The impact of cheap-labor migration on investors’ job-creation plans is highlighted by a report at an economic research site, SSTI.org.
The report shows late-stage venture capital investments are concentrated in the states where investors and their new workers — legal and illegal migrants — prefer to live. For example, in the last three months of 2020, investors made investment deals worth roughly $2,028 per person in California, $936 per person in New York, $167 per person in Pennsylvania, $128 per person in Ohio, $52 per person in Kentucky — and 55 cents per person in West Virginia, which is ranked among the poorest states in the union.
“Just the five leading metros account for more than 80 percent of total venture capital investment and 85 percent of its growth over the past decade,” Bloomberg reported in 2018. “That’s spatial inequality on steroids.”
And the regional gap is widening rapidly, Bloomberg reported:
San Francisco has seen by far the largest increase in venture capital investment over the past decade or so. Venture investment there has climbed five-fold from $5 billion in 2006 to $25 billion in 2017. Indeed, it accounted for more than 40 percent of total U.S. growth in venture capital over that period.
New York is second with $12.3 billion in venture investment, 16 percent of the 2017 total. It now considerably outdistances Boston-Cambridge in third place with $8.7 billion, as well as Silicon Valley, which is fourth, with $8.3 billion. Indeed, New York saw its level of venture capital investment explode from less than $2 billion in 2006 to more than $12 billion in 2017 … its share more than doubled from 7.5 percent in 2006 to more than 16 percent in 2017.
“Venture capital investment and the wealth it generates are getting more, not less, concentrated,” Bloomberg noted.
“Nearly 75 percent of all venture capital investment goes to just three states: California, New York, and Massachusetts,” according to Steve Case’s Revolution.com, one of the few investment firms that are trying to invest in the center of the country.
Some of the founders of FWD.us have recognized the regional skew — and are trying to make money from the harm inflicted by other investors.
For example, two FWD.us founders have launched the Economic Innovation Group to lobby for a law that would import extra migrants to the heartland states — and bar them from moving to the coasts. The extra migrants are intended to drive up real-estate values in the heartland, so generating another windfall for the California-based investors.
Moreover, the extra inflow would do little to close the regional gaps because most of the annual inflow of 1 million new legal immigrants — and many more illegal and semi-legal migrants crossing the Mexican border — very much want to work in the coastal states because that is where they see good jobs and decent futures for their children. The New York Times described the migration pressure August 7:
One of the detainees [caught on the border], Alex, 30, from Ecuador, was wearing a bead necklace with a crucifix and an Our Lady of Guadalupe pendant for protection. It was his first attempt to cross into the United States, he said, and he had paid a smuggler thousands of dollars to guide him toward New York. “I’m a noble man,” he said. “I came to fight for a better life, and to provide for my family.”
Investors “don’t have to go in search of a labor pool in America anymore; they can simply import it,” said Kevin Lynn, founder of U.S. Tech workers. “The people they import are going to work for less and are amazingly grateful to be here,” he said, adding, “I encourage American students leaving college with a STEM degree to look for opportunities in the Midwest … go where the immigrants aren’t.”
The data pushed by FWD.us shows how many states will gain little from the amnesty — and will fall further behind in the national competition for the investors’ money.
Democrats Sen. Joe Manchin in West Virginia, and Sen. Jon Tester in Montana, have a combined population of 2.8 million. Their states would get — at best — $300 million in extra payroll gains over the next decade. But in exchange for the Senators’ two-state amnesty windfall, the coastal investors would get millions of new legal workers for jobs elsewhere in the United States. In late 2020, West Virginia got $1 million in late-stage investment capital, or about 55 cents per resident, compared to $2,028 per Californian.
Democratic Sen. Tammy Baldwin’s Wisconsin and Sen. Sherrod Brown’s Ohio have almost one-third the population of California and New York but would only get one-sixteenth of the windfall given to the two big Democratic states. And once millions of illegals become legal in California, New York, Texas, and Florida, the coastal investors will have even less incentive to create jobs in the midwest. In late 2020, the two states got roughly $130 per resident in investment capital, versus $890 for every New York resident.
The two southwest double-Democratic states — New Mexico, represented by Sen. Martin Heinrich and Sen. Ben Ray Lujan, plus Arizona, represented by Sen. Mark Kelly and Sen. Krysten Sinema — would get one-third less of a windfall, per person, than New York and California. They will get far less attention from coastal investors if Congress allows more migrants into the U.S job market.
The forgotten northeastern states would be pushed further behind by the amnesty. Vermont, New Hampshire, and Maine would get roughly a windfall of $200 million, or 1/600 of the gains promised by FWD.us investors, if Sen. Patrick Leahy (D-VT), Sen. Bernie Sanders (D-VT), Susan Collins (R-ME), Angus King (I-ME), Sen. Maggie Hassan (D-NH) and Sen. Jeanne Shaheen (D-NH) vote for the amnesty. In 2020, the three states got roughly $80 of investment capital per resident, while Massachusetts picked up $2,400 per resident; Why would nearby investors in New York create jobs in these states if the federal government legalizes millions of workers closer to New York — and is also flying more legal immigrants into La Guardia airport every day?
Todd Schulte, the president of FWD.us, dodged questions from Breitbart News.
“I don’t know if that is true that investors don’t invest ‘far from home districts’ and would not feel comfortable with that assumption unless you have lots of data!” he responded when Breitbart asked about the impact of migration on investment.
When asked if the proposed amnesty would skew investment towards the coasts, he replied:
Economic growth in Florida and Texas is good! … a pathway to citizenship is great for the economy in Arizona, in Minnesota, in Missouri and California. So not sure the point you’re making but maybe I’m missing what you’re asking. Immigrants and immigration are good for the economy and growing a stronger middle class.
Few politicians have recognized the link between international immigration and regional investment. For example, West Virginia’s Joe Manchin says he will support an amnesty that will help discourage investors from creating new jobs in his low-investment and poor home state.
The same centralizing process also works within states to suck investment, wages, and real estate values from the peripheral districts.
For example, Rep. John Katko (R-NY) represents a district in upstate New York with few legal immigrants but many labor-intensive dairy farms that prefer to hire skilled, disposable, and powerless migrants instead of Americans or robots. The per capita income in his district is roughly $35,000, significantly below the $42,000 annual income in New York. Overall wealth in his district is relatively low because real estate values are far below the values in the coastal cities which are inflated by the far higher population of foreign-born high-occupancy renters.
Katko’s district is adjacent to Rep. Elise Stefanik’s (R-NY) similarly investment-starved, lower-wealth 21st district. In May, Stefanik was elected as House Republican Conference chair, despite her prior support for amnesties and cheap labor.
Meanwhile, Democratic leaders in New York are trying to keep illegal migrants in their city because they provide cheap labor to the city’s elite and also help to spike real-estate values. In April 2020, Joseph Salvo, New York City’s chief demographer, told the New York Times why the city needs new bodies to replace the legal and illegal migrants who exited the city during the coronavirus crash:
In the pandemic, [migrants] are trying to make a living and coming home and living in close proximity to other people. And they work the cash-only jobs, service jobs, services in buildings, home health aides, that we start to lose. Our growth is going to depend on giving support to these immigrants, many of whom suffered and lost family members.
What we pray will happen is that the city will come back with a ferocity we have never seen in food, beverage, entertainment and hotels. All of that is going to come back. And hopefully the immigrant population will prosper because of that. That’s the key.
The national transfer of wealth to the coasts is worsened by the federal government’s visa worker programs.
Those programs keep about 1.5 million foreign contract-worker in an expanding range of U.S. white-collar jobs, such as doctors, statisticians, programmers, therapists, teachers, designers, and pharmacists.
The programs allow Fortune 500 companies to import many foreign contract workers who accept low wages and workplace abuse because they hope to get the huge prize of green cards. For example, the H-1B program keeps roughly 1 million foreign contract workers in jobs needed by U.S. graduates. The Optional Practical Training (OPT) and the Curricular Practical Training (CPT) programs allow another roughly 500,000 foreigners each year to get taxpayer-subsidized jobs after enrolling at U.S. colleges.
In 2019, the pro-OPT, Zuckerberg-boosted Niskanen Center provided a detailed report about the 2017 OPT employees, based on data provided by the Department of Homeland Security. The study showed that 63.4 percent of the foreign OPT workforce joined companies in eight states, and Pennsylvania picked up 2.5 percent of the workers — leaving the other 38 states with an average of 0.5 percent share of the OPT workers.
If each OPT employee costs $20,000 less than an equivalent American, the Niskanen report suggests that the OPT program annually provides a cheap labor stimulus of $2.8 billion to states with two Democratic Senators. Just $740 million of cheap labor went to three states with two GOP Senators — leaving just $270 million for the remaining group of 17 states with two GOP Senators.
GOP states and localities “lose from the cheap-labor program,” John Miano, a lawyer at the Immigration Law Reform Institute, told Breitbart News in May 2020. He continued:
The whole immigration system effectively screws the low-wage states in favor of the high-wage states. If you take a look in the absence of OPT and H-1B, you would have employers looking at the real cost of labor — the average wage of a programmer in Silicon Valley is $160,000, while in most of the country it is under $100,000 — and saying ‘Maybe we should move to Ohio, maybe we should go to Arkansas?’ Instead, the employers use the OPT system to get cheap labor at a discount.
In Silicon Valley, the average salary for a computer programmer is $160,000. Nationwide, it is a little over $93,000. That is a $70,0000 wage difference. In Topeka, Kansas, the average wage is $73,000. (GOP politicians] could go to an employer and say “You have to pay $160,000 instead of $73,000 in Kansas.” But an employer says back “I can make that up that difference with [cheap] OPTs and H-1Bs, so I don’t have to move.”
Overall, investors and business coalitions want to import more migrants — even impoverished, ill, aging, or criminal migrants — because the migrants spike consumer sales, boost rental rates, cut wages, minimize management hassles, and so raise profits and stock values.
But migration damages ordinary Americans’ career opportunities, cuts their wages, raises their rents, curbs their productivity, contradicts their political preferences, and fractures their open-minded, equality-promoting civic culture.
Amid Biden’s inflow of migrants, the “median weekly earnings of the nation’s 113.6 million full-time wage and salary workers were $990 in the second quarter of 2021 … 1.2 percent lower than a year earlier,” Breitbart reported July 16.
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