MichAuto Investor: Restrictive Immigration Policy Hurts Michigan’s Economy

The spring and summer of 2020 have seen a dramatic acceleration of the Trump administration’s measures to restrict immigrants from coming into the United States.

After the onset of the coronavirus pandemic, the White House issued a series of proclamations that effectively limited entry into the U.S. from many nations, including Brazil, Iran and the Schengen countries of Europe. Two of the most damaging proclamations were passed in April and June, respectively. April’s proclamation suspended entry into the U.S. for immigrants who were outside the U.S. or did not have a valid visa as of the proclamation’s effective date of April 24.

Although this proclamation was supposed to last only two months, it has been extended until Dec. 31 and could be extended further by the president. A similar proclamation was issued June 22 that barred entry into the U.S. of foreign nationals who did not have a valid visa in certain specific guest worker categories like the H-1B and L-1.

Like its predecessor, the June proclamation will not expire at least until Dec. 31, and may also be extended at the president’s discretion.

Supporters and members of the administration have argued that these proclamations are necessary to protect American workers during a time of unprecedented economic contraction.

Yet, the facts speak otherwise: Immigrants have made, and continue to make, significant contributions to our regional economy. Take one of the best-known guest worker visas — the H-1B, for specialty occupations such as engineers or computer scientists. Well before the pandemic struck, Michigan employers have relied upon H-1B workers to fill highly skilled positions. In FY 2019 alone, Michigan employers secured 4,350 H-1B visas to bring in talent to fill skill gaps. Ultimately, these H-1B guest workers help Michigan businesses to expand and hire more U.S. workers. A study conducted by the Partnership for a New American Economy concluded that over 21,800 jobs for U.S.-born workers in Michigan were created between 2010 and 2013 as a result of H-1B workers.

Other guest worker visas, such as the L-1 visa for foreign executives, managers or workers with specialized knowledge, produce similar economic multipliers for our state. These workers often come over to help set up or run Michigan-based offices for overseas companies and, as such, play a major role in driving foreign direct investment in our state.

Indeed, a report issued by Oakland County’s Department of Economic Development and Community Affairs shows that the county attracted $575 million in domestic and foreign investment in 2019, with 41 percent coming from companies headquartered outside of the U.S. Indeed, immigrant-owned firms employed over 167,000 Michiganders in 2018, contributed $7.1 billion in taxes, and had $18.4 million in spending power.

In fact, many of the jobs lost due to the coronavirus pandemic were not in sectors that generally employ immigrants. Unemployment figures from the Bureau of Labor Statistics show that unemployment rates for service occupations jumped from 4.2 percent (June 2019) to 18.8 percent (June 2020), computer and mathematical occupations rose only from 1.5 percent (June 2019) to 4.3 percent (June 2020), while health care practitioners and technical occupations increased from 1.5 percent (June 2019) to 4.2 percent (June 2020).

These statistics show that job losses were highest in lower-skilled service occupations, and that demand for higher-skilled workers in computer science and health care continues.

Even with the high unemployment numbers produced by COVID-19, U.S. businesses still struggle to find qualified skilled talent. The effects of the Trump administration’s proclamations will only aggravate this situation, leading businesses either to relocate their facilities to another country, or to become increasingly disadvantaged as their competitors in other countries attract these workers instead. The Information Technology Industry Council, composed of representatives from the major IT firms, has demanded the White House reconsider its restrictive policy toward immigration.

The U.S. Chamber of Commerce and three other litigants have gone further and taken the unprecedented step of suing the Trump administration, contending that the proclamations exceed the president’s legitimate authority. Litigators from the American Immigration Lawyers Association, the Justice Action Center and the Innovation Law Lab have also sued to challenge the entirety of President Donald Trump’s immigration bans.

Business leaders, tech giants and social justice groups all agree — the president’s restrictive proclamations are both morally wrong and economically counterproductive.

Hindering skilled immigrants from entering the U.S. will continue to hinder Michigan’s — and the nation’s — economic recovery. We encourage the Trump administration to reverse its short-sighted restrictionist policy soon so Michiganders, already suffering under the terrible burden of COVID-19, will not have to endure an unnecessarily protracted recession due to the unavailability of skilled talent.

This article was originally published in Crain’s Detroit Business.