How Will Trump’s Immigration Raids Affect American Workers?
Jan 29, 2025
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Oren Cass, founder of American Compass and author of The Once and Future Worker, joins the discussion on the economic implications of Trump’s immigration policies. He explores how recent immigration raids may reshape labor dynamics and affect American workers. Cass critiques the perception that immigrants are taking jobs, highlighting the necessity of quality employment for all. The conversation also delves into potential reforms in the U.S. immigration system, emphasizing the importance of skilled workers and improved labor conditions.
Trump's immigration policies could lead to higher wages and improved working conditions for American workers as the labor market tightens.
There are concerns about potential inflation from rising wages, but increased productivity may help stabilize prices in the economy.
Deep dives
Impact of Immigration Policy on Labor Market
The aggressive approach to illegal immigration is expected to tighten the labor market significantly, particularly in low-wage sectors where illegal immigrants predominantly work. As these workers leave the labor market, employers will be compelled to offer higher wages and improve working conditions to attract new talent. This shift could result in better economic conditions for domestic workers who are finally able to demand more from employers. Over the longer term, this may catalyze necessary investments in productivity and training, leading to improved job conditions across the economy.
Inflation Risks vs. Economic Growth
Concerns have been raised about the potential inflationary effects of higher wages that may accompany the decline in illegal immigration. However, some argue that these increased wages could be offset by higher productivity, ultimately maintaining competitive pricing in the market. Evidence suggests that as employers address labor shortages through innovation and productivity improvements, there could be a balance that mitigates inflationary pressures. The relationship between wages and prices is complex, and a healthy economy could see higher wages coexisting with stable prices through improved efficiencies.
Economic Adaptability and Future of Work
The economy has demonstrated a capacity to adapt to significant labor market fluctuations, as seen during the aftermath of the COVID-19 pandemic. The adaptability of businesses suggests that they can cope with disruptions, especially in light of prior instances where job vacancies were filled swiftly as conditions changed. There is also a recognition that eliminating illegal immigration can lead to a more efficient labor market, as employers would no longer rely on a surplus of low-wage labor. Ongoing discussions highlight the necessity for a legal immigration framework that emphasizes skilled workers while ensuring that native workers are not sidelined.
On this week’s Trumponomics, we look at how Trump's immigration policies will affect the nation’s economy, and especially whether it will be good or bad for American workers. Oren Cass, joins host Stephanie Flanders and Bloomberg Opinion Senior Executive Editor Tim O’Brien.
Cass, formerly with the right-leaning Manhattan Institute and founder of the conservative think-thank American Compass, is author of The Once and Future Worker: A Vision for the Renewal of Work in America.