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Home | Blog | Trump is Wrong on H1-B Visas

Trump is Wrong on H1-B Visas

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Tags U.S. EconomyPolitical Theory

01/31/2017

In what may be a constant theme throughout his presidency, protests broke out around the country in response to Donald Trump’s recent executive orders banning travel from certain Middle Eastern countries. While it’s fair to question why similar protests didn’t spring up when the previous administration was bombing the very same people, the order itself is clearly more “security theater” than anything resembling a real solution.

Though it’s reasonable to suggest that government programs aren’t the best way to handle humanitarian crises, the order itself stems from the same issues that constantly plague government policies: inefficient, ineffective, and entirely dismissive of individual rights. Of course, this is precisely why the protests over such an order ring hollow from supporters of past administrations: rather than representing some extreme act of tyranny, Trump’s actions are seem woefully status quo for a government that has long viewed everyone as a potential terrorist.

Given the disturbing precedent already firmly established for “national security”, in some ways Trump’s reported next immigration-related executive order may be even more troubling.

As Bloomberg reports, the administration has drafted an executive order aimed at limiting H1-B visas.

The aim here is blatant protectionism, which brings with it a number of unique issues.

For one, as Judge Andrew Napolitano has noted, the Constitution doesn’t allow the Federal government to restrict immigration simply to protect wages:

[T]he Constitution itself — from which all federal powers derive — does not delegate to the federal government power over immigration, only over naturalization.

Thus, when the government’s motivation for enacting immigration laws is to further genuine compelling foreign policy goals, the laws will be upheld.

But when the government’s motivation is nativism or fear or hatred or favoritism, strict scrutiny will operate to defeat those laws.

Of course the Constitution doesn’t quite have the same power that it used to and for any appeal Trump has, he was always an unlikely figure to “restore the republic.”

So looking beyond a Constitutional objection, it’s simply terrible economic policy.

After all, H1-B immigrants are selected precisely because of their marketable skills, and immigrate purely for work purposes. So while there are reasonable concerns about mixing welfare and open borders, H1-B visas are precisely the sort of immigration-by-invitation that attracts talented labor and expands America’s productive class.

While the aim of the executive order is to protect American jobs, just as is the case with any potential tariff, such a focus damages the economy as a whole. In his book Socialism, Mises noted how such protectionist policies benefited select individuals at the expense of the society:

A system which protects the immediate interests of particular groups limits productivity in general and, in the end, injures everybody — even those whom it began favoring....The greater protection afforded to particular interests, the greater the damage to the community as a whole.

So while it is true that certain groups of workers would benefit from this government protection, the costs will be borne by the rest of society.

Increased labor costs will mean higher prices, or cuts in other areas like research and development. Perhaps most concerning is the impact it could have on the tech sector, who have been big advocates of H1-B visas due to a lack of properly trained American labor. Considering how much technological innovation improves our day-to-day life, it is no exaggeration to suggest that making it harder for Silicon Valley to hire who they want to hire will make all of us poorer.  

Just as it’s fair to call out the left on its hypocrisy in being more vocal in its criticism of immigration restrictions than drone bombings, a failure of Republicans to criticize any restricting of H1-B should be similarly ridiculed. After all, Republican politicians across the country have successfully advanced “right to work” laws that promote employment freedom at the expense of union benefits. Any logical consistency would force the same politicians to side with employers on the issue of hiring skilled labor from outside the US.

If Trump’s goal is to improve the US economy, he should stick to slashing government regulations and lowering the corporate tax rate. Leave the disaster of protectionism to Bernie Sanders.  

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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