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Trump immigration clampdown may threaten US jobs, wages, economists say

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Donald Trump’s anti-immigration policies have had a devastating effect on farmers reliant on overseas labour. AFP

AFP – The 20-year-old San Diego bakery Con Pane Rustic Breads & Cafe went out of business this month after an audit by US authorities found immigrants working there illegally.

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In April, a small Nebraska town lost a potato processing plant, and the local revenue it generated, in the wake of an immigration raid on its facilities. A restaurant in New York appears to have suffered a similar fate in August.

Farmers say they are planting less, turning to automation, eliminating some crops, leaving them to rot in the field or contemplating selling out of the business altogether – all because they cannot find enough immigrant labour.

As the US birth rate is falling and a labour shortage is worsening, President Donald Trump’s crackdown on immigrants could make the situation worse for businesses like these.

Trump and others who favour tighter immigration controls say low-skilled migrant workers compete for US jobs and drive down wages for all workers.

But a growing body of research suggests the contrary: that removing immigrant workers can be destructive, resulting in lost jobs, lower wages, cancelled investments and less affordable services, even for US citiens.

About 7.6 million unauthorised migrants work in the United States, amounting to 4.6 percent of the labour force, according to the Pew Research Center, and the share is shrinking even as demand for workers is strong.

Immigrants staff major industries such as food processing, farming and hotels as well as small businesses such as restaurants and building contractors provide sought-after services such as childcare and cleaning.

In 2016, an analysis by the National Academy of Sciences found there was “little evidence” that immigrants affected overall employment for the native-born.

And Julie Hotchkiss, an economist at the Federal Reserve Bank of Atlanta, sifted through employer and wage records from the state of Georgia and found firms that hire unauthorised workers actually pay their legally authorised workers higher wages and stay in business longer.

“Paper after paper, I see a net positive impact from the presence of these workers,” she said, stipulating that her views are her own.

Employment for US citizens actually fell by 0.7 percent in communities where authorities deported half a million mainly Hispanic immigrants between 2008 and 2015, according to research published in December by economists at the Universities of Colorado and California.

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