Trump’s ‘Buy American—Hire American’ EO May Have The Opposite Effect

Trump will sign a new Executive Order today to reinforce his ‘Buy American—Hire American’ campaign slogan. This order intends to enforce protections for certain American made goods, which is not necessarily a bad thing. However, the second part which looks to strictly enforce H1-B Visa laws could have very adverse effects. H1-B Visas allow skilled workers in certain fields to work in the US. The stricter enforcement is intended to curb fraud as well as stop foreign workers from working for below-market wages. While this seems like a good idea on its surface, one need only look back  nine years to a different industry to see the consequences of ill considered enforcement of immigration policy.

In 2008, ICE carried out one of the largest immigration raids in US history in Iowa and Mississippi. The May raid in Postville, IA of a Kosher meat packaging facility resulted in 389 arrests, approximately one quarter of the town’s population. In September of that year, ICE raided an electrical transformer plant in Laurel, MS resulting in 595 arrests, approximately five percent of the town’s total population. These raids not only had a crippling effect on the on the businesses, but the towns as well. Postville was decimated. Stores were empty and businesses began to close as a result of the sharp decrease in population. According to a 2008 report by Susan Donaldson James for ABC News—

“A Wal-Mart and other shopping centers have been a “dead zone” since the raids, according to Velez. “It’s empty, like going to the desert.”

These raids, as well as many others conducted around the same time throughout the country on agricultural and industrial businesses, had a devastating effect on local economies and municipalities. The mass collection and deportation of immigrant populations did not “free up jobs for American workers” as is advertised by President Trump’s campaign rhetoric. It actually did the opposite. It hurt the incomes of American workers and closed American business that serviced the populations of these communities. Restaurants, retail shops, mechanics, doctors, and countless other business suffered, or closed as a result of the loss of large portions of the local population. What the Bush administration failed to realize then, as the Trump administration seems to ignore now, is that although these workers are undocumented, they are still consumers. They still pay sales tax, shop at stores, got to the movies, eat in restaurants, and use purchase goods and services. Yes, many even pay federal income taxes. It is like a human Jenga puzzle. Each piece supports the next. If you remove too many, the whole system collapses.

Granted, this EO does not address the same population as those raids. This matter seeks to limit the amount of skilled workers entering the country. In other words, it does not hurt Postville, IA, it hurts Silicon Valley, CA. And, what hurts Silicon Valley, hurts Main Street, USA. Taking a ham-fisted approach to immigration at this level could have dire consequences on a national scale.  An excerpt from an article in the Washington Post highlights this point—

“There are a handful of companies that have stirred controversy in this space but there are 27,000 other employers that still have to use this system,” said Scott Corley, executive director of Compete America, a coalition of mostly tech companies advocating for immigration reform to benefit high-skilled foreign workers. “If you basically go in and take a sledgehammer to the program without any thought for collateral damage, the cure can be worse than the ailment. Change needs to come. It comes down to how you do it.” 

Google, Yahoo, eBay, Tesla/Space X, and many other American tech giants might not be exist if not for their immigrant founders. It is not that Americans cannot, or do not have the capability, skills, or intelligence to create these types of things. It is that the opportunities afforded to these immigrants in this country allowed them to use there skills to build this great companies that employ hundreds of thousands of American workers. Taking a Postville-raid approach to H1-B Visa laws and running headlong with an ill conceived plan can cause irreparable damage to the US economy. Carelessly limiting the immigration of this type of talent could have far reaching ramifications, including increased research and development costs for the technology, pharmaceutical, and chemical industries. These increase costs are passed along to consumer in higher priced smartphones, computers, medications, and everyday man-made products. This will created the same adverse reaction as the ICE raids, only instead of closing local businesses, it will force consumers to look for cheaper foreign goods, thereby causing large corporate employers to lose business, layoff employees, and ultimately fail.

It is not that the US should turn a blind eye to abuses in the immigration system. There are plenty and often it is the employer who is the culprit. Unfortunately, it is the worker, and often the consumer who suffers the consequences. There is much room for improvement in the immigration system, but one, or two page Executive Order is not the answer. We thorough and well thought out policy that allows for the entrance of skilled and talented people, laborers willing to fill vacancies that would otherwise remain empty, and individuals and families seeking asylum from war and persecution should be the goal. It will take time, political capital, and a lot of sacrifice and compromise. What will not work is a political slogan designed to garner applause. That has never been a sound basis for policy or governing.