Why deportations are an ‘economic disaster’ and other immigration truths

Zeke Hernandez:

When you have like you mentioned 11 to 12 million on. Documented immigrants, which is, by the way, about a quarter of all immigrants in this country. It’s not just that you have a few bad apples coming in, it’s that our system for bringing in apples is completely screwed up. Hi, I’m Zeke Hernandez. I’m a professor at the Wharton School of the University of Pennsylvania, and I’m an expert on how immigrants affect the economy.

Simone Del Rosario:

Your book is called, The Truth About Immigration: Why Successful Societies Welcome Newcomers, and Zeke, it’s right there in the title, the truth about immigration. So I wanted to ask you, what do you think is the biggest misconception?

Zeke Hernandez:

The biggest misconception that people have is that immigration is a zero-sum game between us and foreigners, when, in reality, immigration is a net positive for everything that we want, for a prosperous economy and a successful society. And so immigration is good for us, is the main point.

Simone Del Rosario:

What are the markers of that? What are the things that you’re measuring that based off of?

Zeke Hernandez:

Yeah, let me give you perhaps a big-picture overview when it comes to the economic benefits, and then we can talk about other societal issues. I always use the fingers of my hand to make it really clear that what the evidence tells us is that immigrants contribute five big economic benefits to every country and community they arrive to. And those would be one, investment, two, innovation, three, talent, four, consumption and five taxes. And those are the inputs to any prosperous economy. Good jobs and economic growth are going to come from those five inputs and how they combine, and immigrants contribute a lot of those five things, and they also increase the variety of those five things. That is because they’re not the same as you and me. They don’t consume exactly the same things, they don’t have exactly the same ideas. They’re connected to different investment networks. And so they don’t only grow the economic pie. They make our economies more diversified, and economies that are larger and more diversified create more jobs and opportunities for everyone. And that’s an economic Win. Win.

Simone Del Rosario:

The reason I really wanted to talk with you is because when we talk about the economy and we take politics out of it, we keep running into cases for immigration. And so I was wondering if you could explain to me, what are some of the things that are specific to the United States that would benefit from immigration?

Zeke Hernandez:

Oh, boy. Where to start? I mean, we can talk about so much. Let me start perhaps with one that we almost never get to, and that’s the investment benefits of immigration. If it’s appropriate to share a story. This is something that happened in my home state of Pennsylvania, just earlier last year, an article in the local paper caught my attention, and it was about an investment of $300 million being made by a company called EMD Electronics. And what caught my attention is that this investment seemed to be in a place where it didn’t belong. It was in this little town of 3500 people called hometown in central Pennsylvania. And I thought this is weird, that a place that small, so removed from it, you know, any other big city will get that much investment. And by the way, that investment created 200 skilled manufacturing jobs, EMD, electronic makes inputs for computer chips, which is a really important strategic industry, of course. And as I looked a little bit more into what was going on, I discovered something a little quirky, which is that hometown Pennsylvania was founded in the 1800s by German immigrants. It turns out that EMD electronics is owned by a German Corporation, and it’s not a coincidence that a German company is investing in a place that was settled by German immigrants. What we found in the research is that where immigrants settle, they act as magnets of investment from their home countries, and that investment creates jobs, and it doesn’t take 100 years like it did for Germans to settle in hometown, Pennsylvania. A lot of the investment we’re getting in this country from countries like India, China, Mexico, a lot of you know, a lot of the investment we’re getting is in places that have received large communities of immigrants from those locations. And on top of that, immigrants are 80% more likely to start their own businesses. So not only do they serve as magnets of investment from their home countries, but they’re putting their own capital in starting businesses that create jobs. And so that is a story that’s often never told, that immigrants create jobs because of the amount of investment that they bring.

Simone Del Rosario:

And this is the economic case, if we bring in the political landscape of it all, more than half of Americans want to see immigration in the United States go down. It’s actually the highest measure of this long-standing Gallup Poll since the month after the September 11 attacks. What do you make of this shifting attitude?

Zeke Hernandez:

Well, I think it’s an attitude that is understandable when you see all the negative rhetoric that is in the headlines and certainly from many of our political candidates. And this is in some ways true from both sides. One of, I think, one of the big surprises of the last year or so is that both the right and the left have now taken a fairly aggressive message about, you know, the border and about how the influx of immigrants is really doing us damage. You see, you know, say Democratic mayors who used to be pro-immigration now talking about how we need to limit immigration, and that comes a lot from the political rhetoric and from a misunderstanding of all the benefits that we get from newcomers, again, those five economic inputs, but also think of all the ways in which immigrants enrich our culture and make our food and our music and our entertainment much more interesting. But I think it just comes from the short-term stress of not being able to balance the budget right when a big inflow of unexpected immigrants arrive somewhere, you do have short-term costs in terms of housing, perhaps in terms of other kinds of assistance, certainly educating children. Schools get a little more crowded in the short run, and those are strains on local budgets, but spending the money to welcome those immigrants is beneficial in the long run, because it produces those five benefits that I talk about. I think the problem, though, is that there’s so much political stalemate on Capitol Hill that we don’t have smart solutions to deal with those short-term disruptions. But I want to emphasize they’re just short-term disruptions that are very much worth dealing with because of the long-term benefits.

Simone Del Rosario:

But it is certainly more than political rhetoric, especially when you talk about those Democratic mayors, talking about the struggles that they’re facing in their cities, is that, you know, you have a city like New York City, where immigrants have been bused in, and they’re very clear that they can’t make ends meet with their budget when having to deal with this influx of people coming into their city, and it’s happening in cities across the country, those are very real concerns that they’re having to cut services for people who live there in order to pay for those needs.

Zeke Hernandez:

Absolutely, yeah, and I certainly didn’t mean to come across as under, underestimating or ignoring those things absolutely. You know, the city of New York budgeted for a certain amount, a certain amount of services, and now that budget’s been blown up by those unexpected costs. But what I want to emphasize is that when we see those crowding consequences of immigration or the rapid inflow of people, that tends to reflect that we’re just bad at managing population growth, and we’re bad at managing our immigration system, but it’s our fault. It’s about how we administer the system. It doesn’t say anything about what immigrants do for us in our communities. It just tells us that we’re bad at governing those things, right? And those are very two, two very separate things. You have to separate immigration and what immigrants do from the immigration system and the immigration regulations that we have put in place, and that is our fault. And so the chaos at the border, and the chaos that is moving from the border to major cities in the United States is because we are really bad at managing the inflow of people. We’re really bad at budgeting ahead of time, also because it comes from political stunts right where a governor is sending people with no warning, and of course, it’s intended to create chaos, it has created the intended outcome. But again, that says more about our politics and our dysfunctional system than about immigrants and immigration, per se, if that makes sense,

Simone Del Rosario:

yeah, if we’re talking about the economic case for immigrants, is there a difference between legal immigration and unauthorized immigration?

Zeke Hernandez:

Well, there are some differences, but perhaps the headline is, you know, when I mentioned those five things with the fingers in my hand, no, there is no difference in the sense that whether an immigrant arrives legally or not for humanitarian or other reasons, they all bring in those five things, because people bring in those five things, and immigrants are people like anyone else. What happens with unauthorized immigration is that you don’t get all the benefits that you possibly could because of the limits that immigrants have in contributing because they don’t have authorization to do everything that an economic actor could. I’ll give you an example my barber happens to be an unauthorized immigrant. This is something that he shared with me after many years, and after we developed some confidence, and he’s very good. He’s actually the most sought after barber in the area, and he wins a lot of awards. And he once confessed to me that he had $200,000 in. Ash saved to start his own barber shop, and I just about fell off my chair. I was like, what this guy has so much money saved, he’s ready to invest his capital in a business that will create jobs and pay taxes and provide a valuable service. And I said, Well, why don’t you do this? And he said, well, because of my legal status, I can’t, I can’t do that, right? And that just illustrates that Here is someone that is bringing those five things that I mentioned, but there’s a ceiling on how much of those five things he can bring because of his legal status. And you know, one more thing on this is when I say that even undocumented immigrants bring these five things, I’m not saying that we should have a system that allows a ton of undocumented immigration. I’m saying that we need a system that makes channels of immigration more regular so that we can get all the benefits that people bring.

Simone Del Rosario:

It sounds like your barber would fall into this category. Former President Trump has promised mass deportations if reelected. It’s not something he was able to achieve much in his first term. At last count, there are 11 million immigrants who are undocumented here in the United States. That count is dated, I would say, it’s probably much higher today. How would that policy impact the economy and the things that you’re talking about?

Zeke Hernandez:

It would be a disaster. And I’m not just saying that we actually, you know, there are organizations and scholars that have actually tried to estimate the cost of deporting 11 to 13 million people, and just the direct cost right of the operational cost would be massive. It would cost more than essentially giving amnesty to everyone. Right? It would be just very, very expensive, logistically, because you have to identify, round up and send out, you know, that many million people. But actually, the direct costs of implementing the deportation aren’t even the worst. The worst cost would be essentially the reversal of those five things that I mentioned. Think of it this way, all of a sudden, businesses have about 11 to 12 million fewer consumers. Is that what we want businesses have 11 to 12 million fewer workers to fill critical jobs in key areas, and you know? And these are areas that that are essential for our economy, like construction, right? Our housing crisis would get even worse by kicking off immigrants farming right. The price of food would go up. The price of housing would go up. Think of the taxes these people are paying. Think of the new ideas and innovations and products they’re introducing. It really would be an economic disaster. And not only do we have to speculate about that, we actually have many historical precedents where we have done exactly that. For example, during the Great Depression, there was a theory that if we kicked off Mexican workers who were kind of seen as, you know, unskilled workers that were competing with natives, that natives would get more jobs. The mass deportation of nearly 400,000 Mexicans in the 1930s actually resulted in job losses and in worse jobs for native-born people. Right? The mass exclusion of southern and eastern Europeans in the 1920s resulted in native-born US scientists becoming less innovative and patenting less because they were less exposed to the different ideas and talent of foreign-born colleagues. So we know what happens because we’ve seen it before. It would just be really, really bad.

Simone Del Rosario:

Why do locals lose their jobs if you deport immigrants?

Zeke Hernandez:

Well, think about it from the perspective of a business owner, and it doesn’t have to be a big business, even a small business. Okay, so let’s say you have a landscaper that needs a minimum of 10 workers for their business to be viable, okay? And let’s say five are immigrants that are undocumented, and five are, you know, US citizens or permanent residents. Okay? You have a minimum skill without 10 people, you can’t do the job. You simply can’t keep that business open. So what happens when you lose those five that get deported, the entire business has to shut down, so you actually lose the other five jobs. The person has to close the business. Okay, that’s just one simple example of what happens. So it’s not just that immigrants are filling key positions. It’s that by filling those positions, they are preserving key jobs for native-born people, and then, of course, immigrants, because they have a very high rate of entrepreneurship, I mentioned that before, they’re 80% more likely than native-born people to start businesses. You would lose all the businesses that these immigrants own and run that create jobs as well. And on top of that, the jobs that remain would be lower-skilled jobs, because immigrants often fill entry-level work which pushes which pushes natives a little bit up the skills ladder. For example, they might do in a construction site. They might become the foreman because that requires English speaking skills, and so that pays a little bit more for them, but now they have. Go down to do the entry-level work, and their wages go down a little bit because they’re doing more basic work, which is also why we see in the data that it’s not just that jobs are lost, but earnings go down as well when immigrants are deported.

Simone Del Rosario:

But what we hear in the rhetoric is that when immigrants are coming in, they are taking those jobs from people who live here and that they’re replacing them, essentially. So you’re saying that’s from an economic perspective. That’s just simply not the case.

Zeke Hernandez:

It is simply not the case. Now look to be clear. I understand the concern for preserving and creating jobs for native-born people. I think we all agree that an economy that is fair should be doing that, but kicking immigrants out or leaving immigrants out does exactly the opposite, right? In fact, if you want to harm US-born workers, stop our immigration program or deport a lot of immigrants, you’re removing those five things from the economy that I mentioned that hurts the very people you’re trying to protect.

Simone Del Rosario:

Okay, when we talk about legal immigration here in the United States, politicians will typically say that they are in favor of skilled immigration. So kind of hand-picking the best of the best around the world to bring them into the country. Would you like to see an expansion of that? And is that preferable to unskilled immigrants?

Zeke Hernandez:

I would definitely like to see an expansion of that. We don’t admit enough skilled immigrants. For example, we only make 85,000 H1b visas available, only about 140,000 employment-based green cards available, which is only 14% of the green cards we give every year. And we give two-thirds of green cards to people who are related to current immigrants. That is family reunification. So we need a lot more visas for skilled people. We educate millions of people in our best universities here in the US that were born abroad, and we only keep less than a quarter of them. So that is, you know, America’s brain drain is that we don’t keep the millions of people that we educate do. We give them all the skills that we need for our economy, and then we don’t let them stay. And so we need to expand that significantly. Because yes, we know that skilled immigrants, for example, play a disproportionate role in patenting and innovation, in building tech startups and attracting venture capital. So we absolutely need that skilled immigration is very popular, I think, on both sides of the aisle. However, it’s a big misconception that we need less unskilled immigration, okay, for at least three or four reasons, right? Don’t forget that unskilled immigrants are also consumers and taxpayers, etc, right? And so it’s not just that they’re providing their labor. We would, we would lose customers and taxpayers. Also don’t forget that we face severe labor shortages in areas that don’t require a college degree, such as farming, construction, household services, barbers, like the example that I mentioned, who’s going to do those jobs that are essential. Americans don’t do those jobs in part because there aren’t enough of them, but in part because we know that they just prefer not to do those jobs. And so we need those people just as much as we need skilled immigrants. So I’m a fan of a balanced immigration system that is more balanced between family and economic migrants, but also between all kinds of migrants that bring all kinds of skills and talent to our economy, not just one type.

Simone Del Rosario:

And speaking of balance in our immigration situation, from the perception of it, it appears that a lot of our immigrants, both who come here, documented and undocumented, are coming from really one specific area of the world, right? It’s coming through the southern border, coming through, you know, people coming from South America, Central America, Mexico, into the United States. Does that? Is that too concentrated?

Zeke Hernandez:

Well, the perception is partially true. It’s, it’s, it’s correct that the scene of the most chaos is, is the southern border. It’s certainly where, you know, news, news organizations like to go take their cameras, but actually there’s a very large category of undocumented immigrants that don’t come through the southern border. They come, they come to an airport from Asia and other parts of the world with a visa, and then they overstay that visa. Okay? In fact, before the pandemic, the largest category of undocumented immigrants were Asians that fit the category I just described, not Latin Americans. That has changed, of course, since, about since the pandemic ended. We can all agree that we want an immigration system that is more orderly, and nobody wants so much irregular immigration. But when you have like you mentioned 11 to 12 million on. Undocumented immigrants, which is, by the way, about a quarter of all immigrants in this country. It’s not just that you have a few bad apples coming in, it’s that our system for bringing in apples is completely screwed up right here. Here are some examples that I think, tell you why the system doesn’t match reality. I mentioned that we only give 140,000 employment-based green cards per year. Only 5000 of those go to people without a college degree. Okay, so the state where I live, the city where I live, could use all 5000 of those to fill job openings like the ones I mentioned. Another example, there are zero green cards available for year-round farm workers, right? The only way you can get a foreign farm worker is through a temporary visa, just for the harvest. But farms need permanent workers like any other business. If you’re an Indian with a master’s degree waiting for an employment-based visa, you have to wait up to 195 years right now, right? That’s ridiculous. And so what happens is when the system is so divorced from reality, because the system hasn’t been updated since 1990 but our economy is growing by leaps and bounds. Our birth rates are declining. People are retiring. The pressure that the economy feels between the amount of workers it needs and the amount of workers we allow is massive. And to fill that gap between those two things, you’re going to get a sort of a black market, or a market for illegal immigrants that provide essential work and essential services and do all the things that we want people to do, but it’s sort of all under the table because it’s, it’s, it’s a sub-optimal solution to what our economy needs. So the best solution to fix the illegal immigration problem is to make a lot more legal pathways available and bring the system back up to what reality really requires. And there’s good research showing that actually, when you increase legal pathways, illegal entries go down. Those two are substitutes. They’re not compliments.

Simone Del Rosario:

Okay, I wanted to follow up on that because we’ve seen how rhetoric has changed activity at the southern border, especially with illegal actions. When you have a country or an administration that appears to be more friendly to immigrants, more people are coming in seeking asylum. Whereas, you know, when former President Trump was in office, we saw a decrease in that type of immigration. So I guess I would wonder how that balances out. If you pitch the United States of America as something that is way more favorable to immigration that doesn’t lead to more people trying to come in illegally.

Zeke Hernandez:

Look, there’s, there’s a study that just came out a few couple months ago by Danny Bahar at the Center for Global Development, and he did a really interesting study just looking at the time series of, you know, unauthorized entries along the southern border, and then trying to see, well, what, what is the biggest predictor of those pulses, right, that we face every once in a while, and in illegal entries? And you might think, oh, maybe it’s, you know, conflict in foreign countries, right? That is explaining those pulses. It’s not changes in administration. For example, like you said, administrations that are more versus less favorable to immigrants that has no predictive effect. The only thing that predicts illegal entries through the southern border are unfilled job openings in the US labor market. That is the main predictor, okay, and it’s the only significant predictor. And also, Michael Clemens has done a study showing what I just mentioned, that basically, to get what we need. We either let people come in in an orderly way, or we kind of let chaos reign and people kind of, you know, sneak in, as they say. And when you make more legal pathways available, you allow people to come in in an orderly way and have their case adjudicated. The number of southern of entry, illegal entries to the southern border goes down, and it’s almost a one-to-one effect, they are perfect substitutes. So the reality is that these people that are coming through irregular channels are providing things that we want and that we need in the economy. We have a little bit of a hypocritical relationship with illegal immigration, because we need it desperately. We kind of know, but wink wink, we don’t do anything to fix it. But also, why would these people come and stay permanently? If they can’t get jobs and they’re starving, they would go back to their country, right? So it’s a little bit of, you know, it works for both ways, but it would work so much better if we just made legal pathways available, right? And we have good evidence that that’s exactly what happens. Where

Simone Del Rosario:

is that evidence? Are there? Is there a specific country you’re looking at that has seen success doing this? Has seen their economic boom from allowing more immigrants?

Zeke Hernandez:

Oh, well, so many of them, but the United States is exhibit number one. I mean, we have evidence from sort of the beginning of our at least from when we have good. Record starting in the late 1800s showing very clearly those five economic gains that I’d mentioned. I’ll give you some numbers that I think are useful. For example, during the early 1900s when we had our first wave of mass migration from Southern and Eastern Europe and also from Western Europe, there’s a lot of evidence showing that immigrants were significantly contributing to new technological innovations in the form of patents, that they were starting businesses at very high rates, that they did a lot to pay the taxes that we that we needed, that that didn’t come at the expense of jobs by native workers, etc, etc. And we have documented the same things during our period of current mass migration, which started around in the early 1970s so the United States is actually exhibit A for all the economic gains that immigrants bring. The other thing that we’ve seen, like I said, is we’ve seen these effects reverse, right when we have excluded immigration, we have lost those five things. And so, you know, it’s pretty clear that those benefits exist. And you don’t have to be a researcher like me and spend, you know, 20 years studying this, just go talk to small and medium business owners like, you know, it’s very like, go talk to someone who owns a manufacturing business in Wisconsin, as I have done, you know. And these are not, you know, flaming liberals, right, who vote in a particular way. These are very blue-collar, down-to-earth people. And the very first thing they’ll tell you is one, I can’t find enough people to fill the positions I need to keep my manufacturing business open. And so they have come to the conclusion out of sheer practicality that they need to go out and recruit among immigrant communities, and they these workers, keep their businesses open, they allow them to pay taxes, they allow them to create jobs. And so it’s this is a practical conclusion. This is not an ideological thing. I, you know, I all of this that I’m telling you comes from empirical evidence, not not, you know, it’s not a political statement.

Simone Del Rosario:

Yeah, I want to go back to your five for a second. I believe the fifth one was taxes. When we have undocumented immigrants, are they contributing to that fifth category?

Zeke Hernandez:

They are, yeah. So, so another misconception, right, besides, the misconception that they sort of steal jobs from native workers is that they don’t pay taxes, right? They, they sort of because they’re here illegally. They have, you know, they just don’t. They do actually, yeah, they actually do pay taxes. And the way they do it is, you can pay taxes in two ways. In the United States, you can do it through your social security number or through an Individual Taxpayer Identification Number, an ITIN. Undocumented immigrants do it through an ITIN, and they’re not doing it out of charity. They’re doing it out of self-interest, because if you ever have the opportunity to to get in the system and become regular, right? And become a legal immigrant into this country. One of the very first things that the government wants to see is that you have a track record of paying taxes. Also paying taxes is a very good way to establish a record of having employment and residence in establishing a presence in the United States. So out of self-interest, undocumented immigrants do this, and they have a very you know, it’s almost like one of the first things they do when they arrive is they get an ITIN and they start paying taxes, which is why, by the way, when, when there’s mass deportations, often one of the first things that cities and localities complain about is the lost tax revenue from losing those People.

Simone Del Rosario:

You talked about charity, and that brought me to another perspective, not you know, workers not paying taxes at a charity, but the concept that allowing immigrants into our communities is a little bit like a charity. Can you talk to me about the resources of it all. If you think about more people coming into your community, it can feel for those people in the community, like it’s a resource drain, like there’s a finite amount of resources in that area, and maybe that’s where the perception comes in. People are taking away from those resources that would be allocated to you. We talked about what’s going on in New York City that is very real as what’s happening, in communities across the country. But can you talk to me about this concept of finite resources for more people coming into a community?

Zeke Hernandez:

Yeah, look, population growth is always going to create some crowding and strain in the short run. Okay, it’s always going to happen. So it’s true when you say, look, new people come in, and class sizes are a little bigger, right? So maybe, you know, my daughter gets a little bit less attention from the teacher. Or, you know, we have to spend more money on fixing roads. Or, you know, the campsite down the road that I love to go to is a little harder to get because there’s more people demanding a hospital. Sales, you know, have, you know, have more demand on them, etc. We have to, we have to build a new school. And they’re my property taxes are going up. That always accompanies population growth in the short run, at least in places that didn’t have much slack. But I’ll give you an interesting example that I think is quite eye-opening. And this is a story I tell in my book, okay, between 2010 and 2020 the state of Idaho is a state that grew the most and the second most in population. It grew nearly 18% in a decade, okay, which is a lot, especially for a state that’s that’s kind of small. It’s very noticeable, right? Because it means that one out of every five or six people Wasn’t there a decade ago. And so if you follow what happened in terms of the debate in the city of Boise, because of all these new immigrants that arrived, okay, these new immigrants created a lot of concern, and there was a lot of concern about housing prices going up, and property taxes and all the things that we mentioned, okay? And there was a lot of vitriol against these immigrants, okay, all the debate, even worries that they were stealing jobs. Oh, you know, everything that we’re seeing in the headlines Now, where do you think the biggest inflow of immigrants into Idaho came from? Right? And a lot of people think, Oh, it was, you know, probably Mexican immigrants or Indian immigrants. It’s actually people coming from California to Idaho, right? But the influx of Californians into Boise created all the same worries that the influx of Mexicans or Indians or any immigrant from a foreign country is coming in. Why do I share that example? Because it shows, again, something I said earlier, what we’re not good at is managing population growth period, right? What’s the difference between Californians versus Indians or Mexicans or Central Americans? It’s, it’s, it’s the additional layer of xenophobia or fear of the unknown or something like that. Okay, but the issues are exactly the same, and so you can do one of two things. You can keep people out or kick them out, and sure you’re going to lower, you know, the strain on public resources, but you’ve done that because you’ve depressed the economy. You have shrunk the economic pie, like we did during the Great Depression. Or you can increase the supply of the infrastructure that’s necessary to manage people. I guess that’s a public policy choice, I would say that increasing the supply is a better option, right? Because decrease depressing the economy is kind of a silly way to get rid of the problems of population growth. I think those are the two options. You manage growth or you manage decline, right? I would rather manage growth. Yeah,

Simone Del Rosario:

and we’re talking about immigration from an economics perspective, that would always be the camp that people would go into as managing growth, not managing decline. You talked about being bad at managing population growth. I guess the good news is that the United States actually has a population problem, as do a lot of developed countries. Our birth rate is under the replacement level. And I talk a lot about demographics here and abroad. The fact is, is that we’re not replacing our population. There are more people that are going to be outside of the working-age population. If we want an extreme example, we look at what’s happening in China right now. It’s creating a huge burden on the working-age population to replace all of those people that are now out of it, usually on the higher end, aging healthcare systems. All of these issues come from a declining birth rate and the inability to replace our population. The only reason that the United States is set to have a pretty stable population through the rest of this century is net immigration. Talk to me about what happens, why we need immigration in order to do this, this sounds a little I would say it sounds like I’ve made up my mind a little bit. But it’s only because we continue to see these examples. And other than getting people to have 345, kids, and when it costs $300,000 to raise each individual kid through 18 years old, that doesn’t seem very likely. So other than somehow magically boosting the birth rate, which we are seeing, you know, candidates at least pitch. We would need immigration in order to continue turning things out, or we need automation to replace all of these jobs we’re losing.

Zeke Hernandez:

Yeah, that’s exactly right. I mean, you hit it, you hit the nail on the head. Japan is another cautionary tale, right? I think Japan has tried to manage this through automation and increasing productivity through robotics, and they realize that you can’t, you can’t automate your way out of this problem, and So Japan is now desperately trying to implement a migrant worker program. The difference between Japan and the United States is that Japan doesn’t have a history, both politically and culturally, of welcoming immigrants, and so they’re really struggling with this we do as a country. One of the estimates that I saw very recently is that by 2050 if we cut all immigration, the working-age population, by 2050 would be 20 million people smaller. That would be a giant gap of 20 million people to lose. Again, let’s. Go back to those five things, right? That’s 20 million fewer taxpayers, consumers, investors, innovators, you know, and labor providers again. Do we really want that? I don’t think that we really do right now. We either can manage that in an orderly way by fixing the system like I mentioned, or we can sort of let chaos reign. Sometimes I have heard people say, Well, I don’t mind if our population is shrinking or if our economy is a little bit smaller, as long as there’s, you know, as much or more to go around for everyone. But I think that’s that’s a fundamental misunderstanding because it comes actually from a very weird paradigm. And you know, I hope you don’t feel like this conversation is taking a very weird turn, but this is actually really worth knowing. It turns out that most of the anti-immigrant movements, especially in the United States, they have their origins in the environmental movement from the 1960s where the main concern was overpopulation. And there was this idea that, you know, natural ecosystems, like, say, a rainforest or, you know, a river is an ecosystem with limited resources, and if those resources get overtaxed, you know, we overburden carrying capacity, and then, you know, all hell breaks loose. And this, this analogy was sort of imported over to human systems and human economies. But people are not like animals and trees, right? People can innovate. People can, you know, use their ingenuity to work their way out of problems, and so you don’t have zero-sum competition like you do with a natural ecosystem, right? Human ecosystems are just a little bit different. But I say that because a lot of this thinking about, Oh, we have this kind of carrying capacity that is fixed, okay, and we want to keep the population small, history has proven again and again that that doesn’t make any sense. From Malthus to today, you know, we’ve managed population growth just fine because of ingenuity and innovation, and we certainly don’t want to manage decline, as you’ve said,

Simone Del Rosario:

Yeah, I want to go back to something that you said much earlier in our conversation about the two surprises coming out of this year, was seeing that both political parties are taking a more anti-immigration stance. And I think this really comes from the political attitudes of Americans here in this country. I mentioned that Gallup poll that showed that people wanted to see a decrease. And, you know, part of that is coming from rhetoric. Part of that is coming from personal experience that these people are, you know, seeing unfold in their communities. But I wanted to lay this out for you as we look at a situation where you have a vice president, Kamala Harris and a former president, Donald Trump, both pitching cracking down on immigration, and ask you, what is the doomsday scenario if we don’t fix the immigration system here in the United States, what is the economy going to look like if we don’t figure out how to welcome more Immigration, both low skilled and high skilled. You said that things haven’t been done since 1990 so what is your what is your scenario?

Zeke Hernandez:

Doomsday scenario? Yeah, look, I think the pernicious part of it is that I don’t think that we would see an immediate collapse of our economy, right? This would be a gradual decline, to me, actually a doomsday scenario that is realistic for the United States. Is what happened in Argentina between about 1945 and today, right in 1945 the US and Argentina were very comparable economies. They were countries of about the same economic size. They were both very wealthy. Immigrants actually were just as likely to want to go to Buenos Aires than New York in the 1940s 1930s okay? And then what happened to Argentina is that they elected this president, Juan Peron, you know, the husband of Evita, if you watch the musical, you know, and you know, some of the echoes are a little interesting, right? Very populist president, very protectionist. President looked, in a word, very suspicious of the outer world, and so Argentina stopped receiving immigrants. Argentina imposed very high tariffs on foreign goods and services, right? This might start to sound familiar, and at first, things were okay. It even seemed like, hey, you know, it’s working for Argentina. We have more jobs for locals. But then, you know, reality started catching up. Argentina stopped becoming innovative. Argentina stopped getting those five things that immigrants bring, and it just entered into a gradual decline. It’s the only country that was rich and is now not rich anymore. It has never happened to any other country to go in that direction, and it came from closing itself off to the world. So to me, my doomsday scenario is that slow, secular, you know, irreversible decline. That’s really what we can face, right? It’s not going to be a precipitous decline. It’s just going to be that our grandkids are way poorer than we are, and that’ll happen yet, two or 3% decline per year that compound. Is over 80 or 90 years, and it becomes a really large problem. And to me, that’s why this is so pernicious, right? Is because no one can say the sky is falling tomorrow. It’s more that the sky is like slowly falling over. You know, many decades, I really do worry about that significantly. And I think that my worry is that both sides have sort of come around to this mindset and this is why, it’s because we don’t have a good narrative about why immigration is good for us, what it does for us. There are really two narratives about immigration that most people believe, and it’s one of the two. One of them is what I call the villain narrative, the idea that immigrants are here to steal your job and undermine your safety and you know, and destroy your precious culture that you love so much. That’s familiar. That’s the platform right now of one of our major political parties. But the other story, interestingly, is not a good antidote to that. It’s what I call the victim story, and this is what the Emma Lazarus poem by the Statue of Liberty tells us right the Bring me your tired, your poor, your huddled masses. It’s a very compassionate message. It’s a very nostalgic message, because it reminds us of our immigrant ancestors. But with all due respect to Emma Lazarus, the way that we’ve interpreted that poem, I think, has done a lot of damage, because then it comes down to either immigrants or villains that we should fear, or there are these victims that we should have pity upon, and pity and fear don’t really get you to a majority right. In fact, fear will usually beat pity. And which is, which is why you’re seeing that the Democrats have moved toward the fear side, that what the evidence shows, right, what my book is about, based on 20 years of research is that you don’t need to pity or fear immigrants. You should welcome them because they’re good for you. They’re good for your grandchildren, they’re good for your economy, they’re good for your culture. And that’s a message that is about what immigrants do for us. It’s not about them, it’s about us. And that’s a more powerful message, but and it’s a message that focuses on our self interest, on what’s good for us. So I think that if we get there, if we manage to know what’s good for us, immigration will become popular again, if not, fear will win out. For sure. The villain message will beat the victim message every time. If you

Simone Del Rosario:

were advising whatever presidential administration is in office, what would be your triage? What would you recommend that they do immediately?

Zeke Hernandez:

Yeah, I’ve thought about this a lot, so I do have somewhat of a canned answer to that. So I would do four things. My four part plan would be as follows. The first thing is, and this is going to sound a little strange, perhaps, but we need to give responsibility for our immigration system to a different agency. Isn’t it telling that DHS, Department of Homeland Security runs our immigration system? What does that tell you in terms of how we think about immigration, the agency that is here to protect us has to protect us from immigrants, and that’s the agency that’s in charge. And so I would give it to say, either a create its own agency, or maybe Department of Commerce or Department of Labor, Department of Agriculture, because then you have regulators who are trying to build something for us manage immigration, rather than regulators who are just trying to protect us. Right? It’s the fear, right? It’s getting away from the fear message that would be number one. Number two is we have to increase the number of green cards and temporary work visas that we give by a lot. It’s the last time we updated. This was in 1990 the economy was 9 trillion in size back then. It’s 25 trillion in size today. So we’ve more than doubled our economy, right? But we’re giving visas at the level of a 1990s economy. I mean, think about that. We weren’t even sending email in 1990 right? And so we again, we just, we just need to, you know, increase that by a lot, double or triple. Probably, okay,

Simone Del Rosario:

I was going to ask, what’s the percentage here? What’s a lot?

Zeke Hernandez:

Yeah, I, you know, no, I don’t think anybody, honestly, can tell you this is exactly how much we need, but there have been studies showing that if we double and triple the number of visas, we would continue to do just fine. Just look at and this is not so hard to estimate. For example, we know that we give only, say, 85,000 H, 1b visas per year, but companies demand over 500,000 per year. So we already have a good sense of what the demand is, right? We know, for example, the shortages in farm workers. We know, yeah. So anyway, so it’s, it’s, it’s, you can reasonably come up with a good estimate, but it’s at least double what we do right now, right? Because the economy has more than double and so, so it’s number two is just increase the number. Number Number three would be that we need to increase the variety of entry paths, particularly on the economic side. Right now, two thirds of our green cards go to family reunification, and only 15% go for employment base. So we just need a lot more employment base, but we also need a greater variety of employment based entry pathways. Right now, if you know, if 135,000 of the 140,000 go to people with bachelor’s and master’s degrees, it means that we’re not servicing the low skilled sector right, like farms, etc. So we just need a lot more pathways. And then part number four, and I think this one is really critical to prevent a lot of political fighting, is that we need to, we need to have provisions to update the system much more frequently in a in the last 100 years. In fact, in the entire history of the United States, there have been really through only three major reforms that change the number of immigrants we allow in, one in 1924 one in 1965 and one in 1990 and so what happens is, when you set the quotas for the next 40 or 50 years, over time, the divergence between reality and the system becomes so large that you get these political fights that we’re having right now, and they become so insurmountable that we never get to comprehensive reform. So instead, we should be updating every, I don’t know, at a minimum, every five years, probably even more often than that, and so that would prevent us from diverging too far from what our country needs. So anyway, those would be the first four big things I would do. There’s, of course, a lot of detail behind that that one has to flush out.

Simone Del Rosario:

Yeah. Zeke, the conversation about immigration is so political, and my goal, and what I think that we achieved here today, is removing politics from the conversation and really talking about the economic impacts, which is what I cover. And so I was really grateful for you to join us and give us so much of your time. If people have gotten to this point and learned so much about immigration, and are hoping to learn more about your research, they can read your book, The Truth About Immigration. Why successful societies welcome newcomers, but I just want to end it there. Ezekiel Hernandez, thank you so much for your time today.

Zeke Hernandez:

It was a pleasure. Great questions, and thanks a lot for having me on.