What’s the economic impact of restricting US immigration?

Good morning and welcome to US Election Countdown. Today we’ll:

• Explore the economic impact of immigration restrictions

• Highlight Martin Wolf’s new podcast on democracy

• And dig into a tale of two economies

US voters continue to rank immigration as a top issue in determining their vote for president, according to recent polling. Since this is expected to favour Donald Trump in November, Joe Biden has been feeling the pressure to take a tougher stance.

He’s getting criticism not only from Republicans, but also from some Democrats in border states. The executive order issued earlier this week is the latest attempt to counteract that. But if politicians follow through on the tougher immigration restrictions some voters are asking for, what could the economic implications be?

Last month, US business groups warned that any crackdown on immigration would limit their ability to operate in a tight labour market. And despite concerns about competition, economic research has shown that waves of immigration have had little impact on the wages of native-born workers.

As Ruchir Sharma wrote in an opinion piece in the FT earlier this year, a growing US labour force, including new immigrants, helped fend off a widely expected recession. This all makes some US voters’ desire to slow immigration feel a little like a double-edged sword.

Notably, Biden’s recent executive order deals specifically with asylum seekers. Since migrants applying for asylum have to wait 150 days before applying for a work permit, we are unlikely to see any impact on the job market for at least six months.

Trump, if re-elected, has proposed anti-immigration plans that include a mass deportation scheme and the use of the military to enforce his policies.

Campaign clips: the latest election headlines

• A Georgia appeals court has halted Trump’s election interference case while it reviews a ruling that allowed Fulton County district attorney Fani Willis to remain on the case. Meanwhile, the judge in Trump’s classified documents case abruptly changed the hearing schedule. (AP News, NYT)

• Hunter Biden “crossed the line” when he bought a firearm while addicted to drugs, prosecutors told a Delaware jury on Tuesday.

• In a wide-ranging interview with Time, Biden said “there is every reason” to conclude that Israeli Prime Minister Benjamin Netanyahu is prolonging the war with Hamas for his own political survival. (Time, FT)

• Democrats and Republicans are feeling the squeeze from a drop in small-dollar donations. (NOTUS)

Behind the scenes

Earlier this week, Martin Wolf interviewed Robert Kagan, a neoconservative scholar and a senior fellow at the Brookings Institution, on his podcast about the state of democracy.

In case you didn’t have the chance to listen to it or read the transcript in full, I wanted to draw attention to part of their conversation. It’s especially relevant in light of Biden’s trip to Europe this week, where he is expected to reinforce America’s commitments abroad.

Kagan advised both Republican and Democratic administrations on foreign policy, and recently wrote a book called Rebellion: How Antiliberalism Is Tearing America Apart — Again, which argues that America’s tradition of rebellion has inspired the rise of Trump.

Asked about the global impact of a potential Trump presidency, Kagan had this to say:

Regardless of what he says he will or won’t do, I think we just know that he has no feeling for the Atlantic Alliance, for the alliances in general. He doesn’t regard them as anything other than sucker jobs for the United States. So that’s a big problem.

Indeed, in his column this week, Martin pointed out that the consequences for global stability could be dire if America retreats from its security guarantee of Europe. Kagan also pointed out:

If [Trump] wins, the faction that is gonna win with him is the isolationist faction . . . They will be fundamentally hostile to liberalism everywhere, which means liberal allies, which means our democratic allies.

There was one, small, caveat though:

Now, there’s only one thing to be said against that, and I don’t want to go too far with it, which is this most recent vote on Ukraine showed a Republican party willing to disregard Trump on this one very important issue. Interesting. It’s pretty much the only issue they have ever really resisted him on, and I find that a little interesting.

Datapoint

For the first time in decades, a new skyscraper is going up in Detroit. A two-year-old Gucci store is nearby and, up the street, a pizzeria has added more space for customers willing to spend almost $30 on a pie.

But the mood is different a short drive away [free to read]. In the suburbs of Macomb County, a squeezed middle class frets about high living costs. 

The discrepancy is familiar in many other cities in Biden’s US economy — and a problem for his re-election bid.   

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While America’s economy is booming, the benefits are uneven. Despite growing faster than any other advanced nation — with near-record low unemployment and a soaring stock market — voters still say they trust Trump’s handling of the economy over Biden’s. 

In Michigan, a crucial swing state, Trump is ahead — but the president is making headway in catching up. Whether he does could very well depend on how lower-income Americans are feeling.

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Viewpoints

• Hunter Biden may or may not merit jail time. Ditto Trump. More important is that only one of them respects the rule of law, writes Edward Luce. [Free to read]

• Julia Ioffe analyses why Biden’s national security team — hit with crisis after crisis — has been unusually loyal. (Puck)

• Why we should be sceptical of voters changing their minds, according to Philip Bump. (Washington Post)