Moody's Talks - Inside Economics - Bonus Episode: Muzaffar Chishti on Immigration

Episode Date: July 30, 2024

Muzaffar Chishti, senior fellow at the Migration Policy Institute, shares his insights with the Inside Economics podcast on the challenges and opportunities posed by the recent surge in foreign immigration. He dispels various misconceptions around immigration and lays out a cogent immigration reform plan. Immigration policy will be at the top of the next President’s policy agenda, and hopefully they tap Muzaffar for his advice. Today's Guest: Muzaffar Chishti, Senior Fellow - Migration Policy Institute Hosts: Mark Zandi – Chief Economist, Moody’s Analytics, Cris deRitis – Deputy Chief Economist, Moody’s Analytics, and Marisa DiNatale – Senior Director - Head of Global Forecasting, Moody’s AnalyticsFollow Mark Zandi on 'X' @MarkZandi, Cris deRitis on LinkedIn, and Marisa DiNatale on LinkedIn  Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Sandy, the chief economist of Moody's Analytics, and this is a special bonus podcast. But like all these podcasts, I have my two trusty co-host, Krista Rides and Marissa and Dina Talley. Hi, guys. Hey, Mark. So we recorded a podcast earlier today.

How are you feeling about things since then? Any change? In the economy in the past two hours? No. No. No. I feel good. I feel the same.

I actually feel better. You know what? After our discussion? No, that wasn't it. I just, you know, I, when I see green on the screen, like the stock prices going up, I keep clicking on it to see green, and that makes you feel better. It doesn't make you feel better? No.

It's certainly better than red. Certainly better than red. Absolutely. Yeah. And this is a special podcast because we have Moose Chisti. Hi, Moos. Hi, Mark. How are you?

So that's what I'm good. Yeah, I think I'm butchering your name, aren't I? Moos. No, really? You forgive me? Your choice. If you want to be formal, then it's Mosefichity. No, definitely not.

Definitely not doing that. I'll stick with the Mose, which I like, actually. That's a great name. And you're a senior fellow at the Migration Policy Institute. That's right. Yeah. And so we ran across each other at a function in D.C. For the life of me, I can't remember what that was.

Do you remember where we met? Central Strategic and International Studies. Oh, that's right. Yeah. And you gave this fantastic presentation on what's going on with regard to foreign immigration into the U.S., and I thought it would be great to have you on. Maybe we could, before we dive into the meat of the matter, would you mind just giving us a sense of you, you know, your background and how you

came to be a senior fellow at the Migration Policy Institute? Well, I'm sure people have different views on how I came to be senior fellow. To begin with, I am actually, for the story, I'm an immigrant. I came to the U.S. to go to law school. And after law school, I got my first job of all things at a labor union in New York called the International Ladies Government Workers Union. Oh, sure. And the initial job was to do contracts with large government manufacturers.

and only after I got there did we realize that the union had immigration problems, which no one at that time had any idea what that was due to. This is before 1987 when it was perfectly lawful for employers to hire unauthorized people. And you never asked for proof of citizenship or immigration status were members. So no one knew that the union had unauthorized. until we started getting factory raids and sometimes raids even in arbitrators' offices. And someone just had to pay attention. I partly raised my hand and partly was drafted.

Maybe you're foreign born. You must have some interest in this. So I really got recruited into paying attention. And the union, to its huge credit, was a very old union. It was founded in 1900, mostly by Jewish and Italian immigrants. So it had an immigrant ethos. It had a huge immigrant history. But that was old.

But the new members were also immigrants. They were mostly Chinese and mostly Latina. So I got introduced to immigration from a legal perspective, but soon had to realize that you, to get into immigration policy, you kind of have to learn social sciences, which I had no training it. and I reached out to social scientists and I read my first book by an MIT economist called Michael Peore called Birds of Passage. That's a seminal piece of word.

To enter the immigration field. And it kind of introduced me. My intellectual challenge in the job was how does the U.S. Union whose job is to protect American workers and wages be pro-immigrant. And that was sort of the challenge. And I realized that actually came in the form of a dual labor market theory that Michael Peoria had developed. But look, markets are not unitary. There are some labor markets in which there is no competition between immigrants and native-born people.

And some there is. And some there is actually a complementary sort of attachment to that. That's really how it became possible. for me to come up with a pro-union position for a labor union. And that allowed that union and me created a message to the AFL-CIO. So I then cut my teeth in the 1986 immigration law, which is signed by President Reagan, the only time the country has legalized, undauthorized people in the country. I lobbied that law.

I really had a lot of interaction with other national organizations who were lobbying. I got to know lawmaking pretty intently. And then I was part of a group that implemented that law. So I founded the immigration project of that union. So that's really how I got into this debate. And then in 2001, a new think tank was given birth to. it came out of the Carnegie Endowment for International Peace where it was a small project.

And the founders during his birthing had asked me if I ever wanted to leave the union, would you like to come and join us? So that's how it happened. And after I arrived there, there was a 9-11. I did my first assignment on the impact of 9-11 on national security, civil liberties, and national unity.

the former immigration commissioner Doris Meisen arrived at the institute at the same time. So we both did this one from a civil rights, civil liberties perspective, and one from national security perspective. And that was the beginning of the thing tank. And today, it's, I'm glad to say, more than 24 years old. And I have become a senior fellow in the last few years. Well, fantastic. Congratulations on that.

That's a very storied in colorful career, very, very fascinating. And I did not know. I should have known, but I didn't know. But pre-1987, employers did not have to verify the immigrant status of their workers. They did not have to. Yeah, I mean, it's a really important historical lesson for everyone who gets introduced to immigration for the first time, that before 1987, it was sort of considered a part of capitalist thinking that you should have right you should be free to hire whom over you want as

part of the the free market enterprise that how can you stop employees from not hiring anyone they wanted it was as in many ways as sort of fundamental as right to free market that right to free market comes to whom that labor is as much a part of free of the free market as capital is or goods are or technology is that why do you restrict one or the other so and it had been tested if they were like 12 states before it is which had state laws and there's those against hiring unauthorized people and they had been up they had been uh they had gone all the way to the supreme court not uh not upheld and this became the first uh time that uh u s employees were now to hire only people who were authorized to work in the United States.

And Europe, all of Europe had these laws before then, and part of it was that this finally match up our laws with the Europeans. That was part of the argument of the proponents of sanctions law. How it has panned out, we can talk more about that, but that's the backdrop. Yeah, very interesting. So obviously immigration has been an issue, a political issue. economic issue for quite some time, but it's coming to the fore in this post-pandemic period because of the surge in immigration across the border.

You know, Congressional Budget Office, the nonpartisan group that does the budgeting for the country has done some really good work here and estimates that I may not have the numbers exactly right, but they're roughly right. 3.3 million immigrants came into the country in 2023, 2.6 million the year before. I think it was kind of $1, $5, $6 million the year before that. And typically, it varies a lot year by year, but on average, it had been close to a million per annum. And that's both legal and unlawful or undocumented. It feels like it's coming in a little bit this year, given President Biden's executive order might be kicking in and some other steps that have been taken.

But nonetheless, a lot of immigrants are coming into the country. Do those estimates ring true to you? Does that feel right, those kind of numbers? Yeah, I'm your last expert to comment on numbers. I'm really, I'm a lawyer, which is always a problem. Once you see a lawyer, no one wants to listen to anything you say after that. It's like Sam Irving at the Watergate hearings. I'm just a country lawyer.

I'm just a country lawyer. But, you know, I play a demographer at cocktail parties, but I do talk to my demographer friends a lot because our institute, migration policy, issue, really draws all its juice from numbers. We are big on numbers. We follow numbers very carefully, and some of the best demographers in the field are some of our senior stock people. So I'll tell you only what I know about this as a generalist. That since the beginning of this century, we have been admitting about a million people a year as lawful permanent residents.

This is what common folk called Greencock voters. That's been remained consistent except for the big dip during the Trump era. So we are now, then there was COVID. COVID obviously put a big dent on migration for obvious reasons. And there were Trump restrictions that also put a big debt.

So we are now back to pre-COVID, pre-Trump normal on immigration. That is legal immigration, pretty close to one million people a year. But what the, I think the CBO numbers are based on, is what's happening in unauthorized immigration or what's happening in people who come to the border is another way of looking at it.

And CBO in the past used to think that about 200 to 250,000 additional people will be added to the immigrant stream who were not in the 1 million figure. That number has now been hugely challenged in the last three years. So that's, I think, what they're basing. That, look, we just had a huge infusion of immigrants who we had not estimated. And if you look at the contribution of those immigrants, that is hugely significant. I think here to add, I think the person who gets the least credit for having made this statement is the federal chief, is the Fed chief, Jay Powell, who earlier this year actually made this dramatic statement, which got very little attention that we might have had a soft landing

because of the unexpected rise of immigration. And that's all at the bottom. That's huge. That way we didn't expect, I think you economists expected that after COVID, it would take a long time for the labor force to come to its normal. And the fact that there was a sudden infusion of unplanned flow of immigrants

is what led to the job growth, which led to the less than expected or less than possible inflation. which then got us the soft landing that we want. So immigrants, as I like to say, even in a chaotic state at the border that many of us have experienced and will contribute to the economy. Because that's the nature of immigration. They are people who are younger than most U.S. labor force. They're eager to work and they're not attached to one particular place. you can move them from Maine to Texas if that's where the jobs are we can't really take a main

person to go to Texas who has had attachment to Maine for ages but an immigrant is really easily moveable from one place so they go where the jobs are which has probably led the CBO to predict that we between 2023 and 2034 we're probably going to have a 7 trillion net growth in the economy. I happen to believe that there are projections of the last, the projections of the future based on the practice of the last three years is probably not going to pan out. And I'm not making any news. They in 20, so that you know, well, in 2020, only about 458,000 people came to the border. That's the pandemic, the fact. That's a pre-pid pandemic. In 2021, that went to 1.7 million.

Yeah. 22, that went to 2.3 million. And 2023, that went to 2.4 million. And they're adding the 1.1 million additional to, by legal immigration, to come to the numbers. So they're basically there's that this trend will continue. I don't think the trend will continue. Just because the numbers for this. Well, either do they though, Mus, right?

Because if you look at their forecast, they have a strong growth. this strong number of immigrants coming in this year, less than 2023, and then by 2027, 28, we're back to a million, I think. If that holds, I think between now and 2026, it will probably go further down. But hugely, but I think considerably going on, because some of the measures put in place by the Biden administration in the last three months of working. Yeah. You know, you're referring mostly to the executive order that President Biden,

I think it has got to frankly, it has got a number of factors. One is that, you know, I'm one of those quote-unquote experts in the field who believe that in the push-pull factor of understanding immigration. Right. That pull factors are more important than push factors. Look, push factors are bad in number of these semi-countries all the time. They may vary as what push factors are bad at what time and what country, like Venezuela. the big center of unauthorized migration. That's all to do with change and the government

and all that. But you could have a bad climate event in Africa. You could have violence in El Salvador, all those, but whether people make the decision to come to the border is dependent on pull factors. Is their belief and understanding, will we get in? In the last three years, the rumors spread, widely spread by social media. If you get to the U.S. and you use the word asylum, you'll get it. That's what I call the definition of a crisis. That understanding now has been changed.

That if you come to the border, you just utter the word asylum, you're not likely to get in. And that filters through, whether through smugglers or through social media, and that's led to reduction. Second is that Biden administration, I think is. So just so, just to reiterate so everyone understands to make sure they understand.

I like the way you frame it, push pull. You're saying there are reasons that push immigrants to come to the country. Venezuela's dysfunctionalities is a example of that. And then you have pull factors. And the pull factor here was the ability to get asylum, claim asylum and come into the country very easily. And it's really the pull factors. They both matter. But the pull factor. matter more. And when you take that away, when it's not easy to come and declare asylum and it's no longer easy to get into the country, that's really what is behind the significant slowing and immigration coming into the country. That's what you're saying. Yeah, the real poor factors are jobs. Or jobs. Well, jobs, right. That sort of goes to the micropureate here. If the rumor spreads that you can no longer get a job in the U.S., that spreads. Both fact, and that sort goes to the CBOs and Chairman Powell's statement, that in the last two, three years, the fact that there was such a job growth and that was propelled by immigration, what read to the rise in GDP, because jobs are available.

It was available in what economists, you folks, economists, are called in the, like the, you know, backbreaking. Have you noticed he said you folks, a number, you know, it's making this distinction between us economists and those lawyers. I mean. That's right. Exactly. And we know who wins. The lawyers, of course. Yeah, lawyers win what we call the poetry argument and the economists win the pros argument.

There you go. There's go. In my estimation. So therefore, they think that this sudden surge led to the growth in the labor market, which then led to the growth in the GDP. And there are some studies, and you would know this. better, which have begun to show that we may have piqued the demand for labor market in the country. There was actually a Wall Street journal article last week, which began to hint it.

That kind of stuff, strangely, in the immigration grapevine, gets translated very quickly. That you have these, you know, these messages sent, quick, look, if you come and you'll get a job at 7-Eleven, just have to make it here. If you come, go to Tennessee, you'll get jobs. Onions are rotting in the fields of Georgia. Go to go to Georgia. And then if the great point says, no, just wait. Jobs are not really planned for people wait. And that's sort of where the informal nature of this business, I think, is important.

And I think I would say that, look, if the job growth is as good as it has been in the last few years, if the, then, you know, you could have that support factor. But the pull factors that have changed in last three months is law enforcement. It's the fact that you are not going to make it in. That in the past, you know, we decided that we're not going to detain unaccomplete children. That's perfectly we shouldn't detain unaccomplete children. Then the administration, this is even in Obama's, we decide if an adult comes with the child, will not detain the family.

So family detention became extinct. And therefore, people read that, okay, let's go as families. That's why there has been a sharp increase in family units coming to the border as against single males. That's a pull factor. That if you just come in a family, you'll be let in. Obviously, those are the pull factors that matter. And the Biden administration, as I said, has been very, I think, good in diplomacy with Mexico. they have gotten Mexico to move people from north of the country to the south of the country.

Mexico is accepting large number of non-Mexicans if we give them a U-turn, which is not easy to do. I mean, people think this is the problem of the Trump administration, the rhetoric, that we should just not let them in. It's just easier said that now. If you don't let them in, where are you going to send them? They have to go to Mexico. If Mexico says, sorry, we're not going to take them. because their only obligations to take Mexicans, what do we do?

That's the reality of immigration. And I think Biden administration has, in recent months, done a reasonably good job of diplomacy in Mexico. Chris, you want to jump into the conversation? Yeah, very, very quickly, because I've actually been looking for an immigration lawyer to answer a question for me. You mentioned that a large number of the recent migrants have been paroled into the country seeking asylum, right? They've had this asylum claim. they've been paroled into the country to waiting their court proceedings, right? As far as I understand it.

My question to you is how many of these, or what fraction of these cases do you think will actually result in a successful outcome for the petitioner to remain in the country versus increased deportations or cases that are not educated in favor? It's the heaven for nerds. This is a classic nerdy conversation, but I'm sure this podcast is. Chris doesn't look like a nerd, but he's a nerd through and through. Let me tell you. I take that as a compliment. You have your patience from the answer. First, I think you're fundamentally right.

But people who we parole in are not necessarily people who we parol in to seek us either. Biden administration is one of its hallmarks is that it creates. what we call legal pathways for people to come as against getting people who are coming to the border. Their idea was that if people are coming to the border, could we just increase legal pathways? They would reduce the pressure. So we created a parole program for Cubans, Haitians, Nicaraguans, and Venezuelans. That if you're national, you can apply for a parole before you come to the country from abroad, as long as you have a U.S. sponsor, and we'll let you in.

nothing to do with it. It just is that for humanitarian reasons, we are letting you. But they're certainly eligible to apply for asylum. On the other hand, people we are letting the point of as maybe people who are letting in the border who come and just say, hi, I'm here for asylum, outside the parole program. They come in and we say,

okay, you can come and apply for asylum inside the country. So then they're all in the asylum backlog. They all go to asylum hearing in an English and code. that court has today 3.7 million cases in the backlog. That takes years to process. In fact, we have argued that the backlogs in the immigration cases have become a magnet. That's a pull factor. That the smuggler case.

So if you just come in, you're sure you'll get in to the court. You'll be here for 10 years. And then after 10 years, the chance of being removed for someone who is a long-term residency in country. is very, very minimal. So that's a pull factor to me. That I think so, but to answer your question more directly, historically in the last 22 years,

I looked at release of the 50% of people in the people who are Salim get it. 50%. That's a lot, but there's a huge, that's this consistency, but there's a huge variation among nationalities. Sure. If you come from Cuba,

if you come from even Venezuela, if you come from Russia, if you come from Ukraine, if you come from China, your chances are very high. But if you come from El Salvador, Mexico, your chances are very low. The 50% when you look at the average. Between, among the countries, it's a huge variation. Then oddly, there's a huge variation in the part of the country where you apply. If you apply for asylum in San Francisco, New York, Boston, your chance of getting. getting asylum are 75%. If you apply in Texas, North Carolina, Georgia, your chance of asylum are very low. So that's where it's a nerdy, nerdy answer to a very interesting. That's the way it is, though. That's fascinating. You were going to go on. I do want to get to,

you know, the costs and the benefits, and you did talk a bit about the benefits. But I want to come back to that. But you were also going to complete a thought with regard to why. immigration is slowing and set to slow further. You talked a bit about some of the pull factors. Are there any other reasons why it would slow? I think you were saying you were going on to number two, and I stopped you. No, I think, yeah, number two was Mexico. Oh, Mexico.

Mexico and cooperation is much more vital. Okay. So you think the immigration flows here are going to really slow up pretty sharply? I think it's going to slow up compared to what we saw in the last three years. That's all I mean to say. Okay. That's a friend. And do you think we'll be back down to a million, like the CBO's forecast is a million by

2027, 2028. Does that sound like a reasonable? I mean, million will definitely have. That's not going to, those are legal immigrants. Yeah. The addition part is what is the variable. Yeah. They come outside the legal immigration stream.

In the past, they used to count them as 250,000. Yeah. I think it'll be higher than 250,000. But I don't think it's going to be going to. we like $2.4 million. Okay. That we saw in 2023. I've spoken like a great economist, you know, somewhere between $2.50 and $2.5 million.

That's right. Exactly. Okay. All right, very good. Okay, well, let's go to the cost and the benefits. I mean, you mentioned the benefit, and I think you're dead. I think that you make a great point that in some sense we were, it was fortuitous that this immigration surge occurred when it did because the economy was suffering from

very tight labor market, businesses, many businesses and many industries were having a great deal difficulty hiring and retaining workers, wage growth was accelerating, price pressures were developing, the Fed was on high alert jacking up interest rates and was headed to much higher rates. But because of all the immigration, that has cooled things off in a number of industries, you know, agriculture and parts of manufacturing, transportation, distribution, retailing, restaurants, leisure and hospitality, so forth and so on. And that's really arguably helped the Fed in its efforts. And so the Fed, instead of having to raise, they increased the federal funds rate to five and

half. They might have had to go to six and a half or seven and a half, and that probably would have resulted in recession. So that's clearly a benefit, although I don't think that, as you point out, as well understood, but the costs here seem to be quite significant as well, no? POS of immigration. Yeah, I mean, we've got a lot of folks coming across the border. need to have a home, they need help. The demands on social programs are quite substantive.

Those costs are quite significant. Exactly. So on the cost-benefit analysis, this is obviously pre-COVID. This is pre-recent arrival debate. You know, first, I, you know, it's just, I have to say this every time, that for a nation of immigrants, we have always been skeptical about immigration. Really. I mean, we're always, it's as old as the, sort of the psychological, it can be understood only in psychological terms that even, you know, you know, George Washington thought that we didn't need any more remittance except for a few skilled carpenters.

I mean, you know, the founder of modern journalism, Van Franklin, our most erudite founding father, you know, made his name. by campaigning against German immigrants. This is, you know, not intentional. I didn't know that. I mean, he wrote his major booklet on telling people as to how Germans just did not share our liberal tradition, not mention in the 19th century, the campaign against the Irish and the Catholics, particularly, was vicious.

The no-nothing party I looked at recently, per capita, got more votes than Trump ever did. And we, you know, when we decided to have our first immigration laws, which would not till 1880, it would be hard to believe for most of the years. We have no immigration laws to the 1880. Anyone could come to the U.S. And the first time we imposed laws, but against Chinese, after they had built our railway system from the east to the west. And in this century, 1924, this is the year, this is the hundredth year of the 20th year of the

1924 Act, which for the first time put quantitative limits on immigration, which is where the quota system came. The quota system was imposed not against Chinese or Latino and the Greens of Asians. It was put against one group of Europeans against another, that members of Congress were convinced that one group of Europeans were intellectually and physically inferior to another group of Europeans

which is southern and southern Europeans, mostly Italians and Slavs were considered inferior compared to north, northern and western Europeans. That was what our immigration pattern was from 1924 to 1965,

literally, against, mostly against southern and Eastern Europe. All on places that they're not assembled, they're not, they don't contribute much. So there's a long history to this. But the real talk about facts is that I think most economists believe that it's a net benefit for the country. And it's a net benefit for two simple reasons.

One, especially now, we're an aging society. Listen, 10,000 baby boomers retire a day. I mean, the country is going to have by 2034, there will be more people over the age of 65 than under the age of 18. Demographers consider that a milestone. Not to mention, the least appreciated contribution of immigrants is what they're doing to the social security system. Given the longer time people live, our social security system is under stress and it can only be redeemed if you have active young workers, contributing to it. They're not getting produced by native-borne people because our birth rate is going down. So the only way you can keep population at a stable level to meet the demands of an aging society are by having new immigrants come in.

And I think Census Bureau projects that by 2040, almost all our net growth in population is going to come from immigration. So they do jobs, mostly, first of all, in the low-skill part of an occupancy, which is construction, which is form, which is all service sectors, from elder care to infant care to health care. All these are what, as I says, a lot of my friends call the backbreaking jobs. But they're also equally contributing to the high-scale in the information technology, in the Silicon Valley, not to mention a huge number of their entrepreneurs. immigrants by nature are more likely to be entrepreneurial than native bond workers.

And they are eligible to make your point on the cost. They are eligible actually for very few benefits. So unauthorized population, which everyone is concerned about, they pay taxes because they work, even though they may work illegally, they contribute to the tax coffers, especially at the federal. But they're not eligible for any benefits except basic public education, K-12, and emergency health care. And those who come actually from Supreme Court decisions. So they are in that regard, they are a net benefit. And they will probably never see any social security benefit because they didn't work under their own social security numbers.

They don't have one. So oddly, you may know the Social Security Administration. has a separate suspense file in which they put contributions of people where they cannot match the contribution to a social security number. We believe that's all unauthorized population. The last time I checked, it had more than trillion dollars in it. So you could argue that unauthorized migrants are saving the social security system. So that's your cost benefit analysis. But, but, Ms. I mean, I hear you. And in typical times, that, feels very logical, you know, makes a lot of sense.

But in the last few years, with the surge in immigration that we've seen, we've been overwhelmed, right? The border's been overwhelmed. A lot of communities have been overwhelmed. You know, hard to place all the immigrants that are coming into the country into homes. You must, well, it's a question. The costs there are quite significant, right? I mean, are you arguing that that's okay, that we should just,

allow that kind of immigration to occur, you know, that the border isn't, doesn't feel at all like a rational place. It's not secure. Does that make sense? Is that what you argue? No, it doesn't make sense at all. I mean, we have had a crisis. The odd thing contributes to that this disorderly border has contributed to saving the rise in the

GDP in the last year. Yeah, yeah, yeah. That's the odd irony of this. That's the odd irony of this. That's the odd irony. But there's still a lot of costs involved with that. It's a cause mostly because it's not sustainable. It's not sustainable both fiscally, the point you're making and politically.

So in the last two or three years, what I call a crisis, and I think the Democrats have real difficulty acknowledging the crisis. President Biden had difficulty. He didn't use the word crisis until the beginning of this year. And Governor Abbott used that to the hill by busing people to what they call the sanctuary cities. So they brought the border to the cities. And so now the cities, which in the past were welcoming these immigrants with the Statue of Liberty posters, suddenly realized that it was not a cost-free phenomenon. That's because of the fiscal cost for housing. It's mostly

housing. And housing is expensive, especially in these blue cities, which are some of the highest real estate markets in the country. So they got to experience the fiscal costs in a way they have never experienced before. And then that led to the political backlash. So today, therefore, many Democrats are expressing skepticism about the border and about immigration in general much more than they did three years ago. So in that regard, you could say that Governor Abbott not only changed the politics of the Republican Party, he has changed the politics of the Democratic Party. Got it. Got it. So you made a really interesting point earlier in the conversation. I didn't want to explore just for another couple of minutes. And that is around jobs. I mean, I think my sense is that why immigrants who come to the country don't want other immigrants to come into the country is because they're afraid it's going to take their job or lower their wage, you know, that kind of thing. But you made the point that in many cases, the, the, you know, immigrants aren't they're not substituting for native born workers they're either

complimentary or they're actually enhance the the productive capabilities of the native born can you just expand on that a little bit more I mean I mean any granularity there I mean how big you know if you could and I of course you know we're all about numbers I mean what share of the coming in or substitutes, complements, and actually enhancing the productive capabilities of the native-born. Do you have any sense of that? I know that's a pretty hard question, but I'm just really curious. Yeah, I mean, I don't have any hard evidence. I'm not sure many labor economists look at it that way, mind of detail. I think the general point is that there are generally

two labor markets, one defined by high wages, high upward mobility, high ambition. and the other is low wages, low mobility and frequently risky. And if you look at that in the high end of the market, there are more native bond workers in the lower end of the market. There are less native bond and more foreign bond. And I think that has sort of historically been true. The point is that actually like in the old garment industry, like if the foreign worker coming in is doing the difficult job of oppressor,

or a sewing machine operator. But the rest of the garment industry is full of salesmen. It's full of garment pattern makers. It's full of designers. That those would not have jobs, not mention accountants and lawyers. They would not have job if the foundational elements of the labor market,

which is where the immigrant workers come and did not exist. Same would be true of food processing. I mean, just look at the food processing companies in the managerial occupations in those jobs. They're not foreign-born workers. They're native-born workers. But they would not have those good office jobs if someone was not willing to do the breakbacking jobs

of food processing at the level, not to mention agriculture. Agriculture is the biggest example of that. So that's sort of the dual labor market theory, which I think has not changed. The only thing that's changed in this is that sometimes the, people who on the lower end of the market do migrate out. That once you, once you pay your dues and

the employee gets to know you well, you could move up to the higher end of the labor market. Legal status makes a lot of difference in that. If you are, if you're without proposition, you're stuck to an underground economy, an informal economy. Once you get legal status, you aspire to a higher end job because you can now really enter the form of. economy. So that's the fact that there are 11 million unauthorized people in the country would tell you a lot of them are really frozen in their positions, which is not good for the society and not good for the economy. Yeah. Let's turn to policy. And a few things there. Obviously, I want to talk about the candidates and their perspectives on immigration.

They feel like they're very different. But before we go there, I'd like to get your take on that immigration reform bill that felt like it was getting pretty close to the finish line back a few months ago, I think it was cabashed by former President Trump who opposed it. Can you just give us a sense of that reform? That seemed to have bipartisan support. There are a number of Republican senators in states that are affected by the immigration across the border who were very supportive of it. Can you give us a sense of what that reform was?

and how you felt about it? Was that a good piece of legislation? Yeah, I mean, that's a textbook example of what's wrong with that immigration system, really. I mean, as I have said in other places, our immigration challenge today really twofold, and some of these we have touched in the conversation. One is we actually really do need foreign-born workers

in all sectioned occupations. But Congress has not changed our immigration laws since 1990. So we have an immigration selection system based on 1952 architecture, tweaked only two or three times since last time in 1990. So we haven't been had the ability to let more lawful immigrants come in. And the reason why Congress doesn't act because the other crisis is at the border. So I don't want to mean is the crisis of the border is both real.

It's a it's an optics crisis and it's a political crisis. crisis. So this was an attempt by a bipartisan set of mostly senators to say, how do we get the border under control? Because that's important to the political understanding of immigration. And how do we then make it possible for legal immigration coming? So I supported it, you know, hugely. I thought of it was, it was beginning, you know, we have to show that this can be progress in it. I mean, something has to, in this political logjam, something has to give. This was a huge beginning. If this succeeded, we could then go. This was mostly to get border into control. But if it succeeded, then you could build on having more robust legal immigration

system. And that was the promise of it. And it failed because President Trump put us one down. Yeah, I think that's a right way to think, a really good way of thinking about it, that we We've got really two problems. One is the border and securing the border. And then the other is kind of a rational immigration system that, you know, allows for the kinds of people that we want to come into the country to come into the country in a way that's orderly and productive for everyone involved. And you can't do the latter until you get the former done because politically there's just

no way to separate those things in people's minds. So these are twin problems and interconnected. Yeah. That's sort of the quick definition of the immigration problem. Yeah. Okay. And now the candidates, so the way I simplistically think about this is, and now it feels like it's going to be Vice President Harris, who's going to be the Democratic candidate.

So Trump be by the, Harris. on Trump, it feels like obviously very restrictive immigration policy, and that's most significantly highlighted by his, at least his rhetorical discussion about deportation and deporting people. You mentioned 11 million unauthorized immigrants in the country. It's probably more than that at this point, but let's say let's go with that number. in deporting at least some percentage of that. Clearly, Harris, I don't think she's not going that direction. I mean, obviously she would be more supportive of getting control of the border,

doing some of the things that Biden has done in the executive order we talked about, but no deportation. Is that roughly right in terms of how you think about these two candidates? So, you know, the lucky thing is that Trump is very easy to discern on this, because he truly believes he won the 2016 election using immigration as the calling card. And it worked for him. It worked immensely well for him. And then unlike any other president who sort of makes a promise and then doesn't implement it during, he actually had a very significant aggressive immigration policy while he was president. So we know, and he thinks that

that this base really gets activated by the immigration sort of talk. In the 20 points in the Republican platform, the first two are immigration, that the 10th is immigration. One is they're using the narrative invasion. I mean, the choice of the word is itself very important. And the invasion, we should stop the invasion of both. Two, we should do mass deportation. these are the calling things how are we going to say you know stop an invasion why should we be calling it that's a separate thing but even if he said we should close the border you know it's not there's not a gate at the border that we can suddenly close i mean it's a 2100 mile the border

unless we put a cop at every in a hundred feet we can't close the border so the only issue that how do you sort of seal the asylum system is what you would the best guess would be. And it's impossible to seal it because it's our national law that anyone who arrives at U.S. soil has the right to seek asylum. So he's stuck with the law, unfortunately. On mass deportation, first of how do you detect 11 million people in the country? Let's assume they're much more by now. You know, we don't have tattoos on people of unauthorized people on their heads. We have to, even if we know their addresses, we'll have to go into communities in which they live with citizens or other lawful pro-aggressors. So you have to have a sort of a Soviet style invasion to the

communities to get people out. That's very hard in a society where he's stuck with the Constitution. The Constitution guarantees due process. Constitution guarantees, you know, right of hippocorpos that if any law enforcement arrests you, you get immediately the right to go to a federal district court judge on the right to him. He's not going to suspend or he won't be able to suspend. So it's more narrative than actual possibility. But what it does is creates a huge element of fear in the communities, which is what I think we will expect in a Trump presidency. I don't think we'll expect mass deportations, but we'll expect a hell of element. of fear. Now, turning to Harris, her record is the...

That would be a self... Another way of describing that would be, I guess, self-deportation, right? Because some people would be so scared that they may leave the country. They may, exactly. That... That happened under Trump One, right? There were significant outflows of folks. Yeah, but marginal. Marginal. Was marginal? Okay. It was marginal. But coming to... And not a mention, talk about this is a podcast.

by people in the business world, if that happened, just look at the impact on businesses. The first call he's going to get that there are rotting onions in Georgia, the state that just put you over. He's going to be a problem. By the way, that's going to be Pennsylvania. That's not going to be Georgia. That's our home state, PA. We're ground zero for this election. Not many, too many rotten onions in Pennsylvania. Now we've got other things, but not mushroom farming. Exactly. Or two first elderly women not getting their nurse at their bedside who just voted for him.

So the real impact of this is not trivial, is what I'm trying to suggest. Right. Slogen Mowder. Now, talking about Harris, but she has to inherit the Biden legacy. And on that, I think my guess is that they will sound tough in the beginning, that, look, we finally got this border into control. that we had inherited a disorderly Title 42 under Trump and the border is now under much better control, the point we made early in the show, the numbers are going down. They're going to bring to attention the diplomacy work to Mexico.

The numbers have gone from 10,000 a day to 1100 a day. This is a big. We're deporting people to 125 countries, which is what they did last month. They made flights to 125 countries. Oh, I didn't know that. But they're going to build on that. Then they're going to say that we, you know, we have created a pathways for legal immigration, and that's the way to go.

And we want a robust legal immigration system. So mass deportation is not going to be on their calendar, but open borders is not going to be on their calendar. That's, I think, that will land up. You know, let's send the conversation with a forecast, because we are economists. I'm going to force you to do a forecast. You know, my sense is that there is now a real appetite, political appetite, for some kind of reform on the other side of the election, that, you know, people realize that, to your point,

we do need immigrants. I mean, we're going to, we have the demographics here are such that we need more immigrants coming into the country. We just need to do this in a rational way. and we obviously need to have a control the border so that that is no longer an issue. And there's support more broadly because of the kind of the state of the economy. The economy is enjoying very low unemployment across all industries in every corner of the country. Business people have been struggling now even before the pandemic, finding workers and retaining workers,

that given all this, there is a propitious economic backdrop and a political will, which was demonstrated by what happened with the legislation three, three, four months ago, to get reform. And that, you know, I don't know if I would make this the most likely scenario, but there is a scenario with a reasonably high probability that includes good reform, good immigration reform. Do you, would you concur, are you as optimistic as I am about that or not? Well, in my business and being an immigrant, I have to be by definition.

By definition. That's right. But, you know, the, I do agree with you that the border has to be brought under a semblance of control. Without that, nothing works. And it's, you know, we at the migration policy institute have put out a proposal of how to get that under control. We need to reform.

asylum system for your listeners go on migration policy and should perform asylum system you'll get the details a program by the way which president Biden adopted in his campaign and then even issued a rule on this has not put in place just to footnote on the other side of this we have also put out a proposal for how we shouldn't improve our legal immigration system and the connection here is that one way to put this is that if we expanded our front door to legal immigration more, the pressure on the bad door will reduce. They have to reduce the pressure on legal immigration. We believe that we must increase immigration at least, and this is employment-based immigration, at least by 500,000 people. We take million people a year as being caught hold on us, but only 7% of them are actually

based on the demonstrated labor market need of our country. That doesn't make sense to anyone. That doesn't make sense even to a Trump supporter. That's the way our immigration selection system is. That has to change. And the only way to change that is by Congress acting in expanded our employment-based immigration system. And our proposal is that we should have

a robust employment-based immigration system. which cuts across occupations, that we should have right now low-end occupations, low-skilled occupations, have very, almost no opportunity to come in. We should bridge occupations, low, middle, and high, and we should bridge temporary immigration with permanent immigration. We kind of making a joke by telling someone, hi, you are here on a temporary H-1B visa, but you have been here on temporary H-1B visa for 15 years. I mean, that's a mockery of the system. This is the honest. So that's why we want to call it a bridge visa. The people who we admit first, they come on a bridge visa for three years. At the end of three years, they decide,

do they want to go back to their country? Some may want to come back and come back later on another bridge visa. That we have concluded not everyone wants to die in the United States, that you can actually aspire to live in more than one country in the course of your life. So people may just not to come and make a living here and go back and come back a few years later. But after six years, you have to make up your mind. You can apply for a green card on the basis of your having been here six or six years. And the numbers of people we admit should be determined by nerds. It should be determined by by, exactly. It should be determined by experts, not by politicians. Sort of like the Federal Reserve makes determination of interest rates.

Politicians don't develop on interest rates. It's a similar situation. They should decide what the rate of growth in the economy is, where immigrants are fit in, what the degrees of educational attainments are, what the fiscal costs and come up with the number for the following two years. That should be the number that Congress should put. And therefore, we have circularity that people can move. between their countries of our view, and we have flexibility in how many people.

Circularity and flexibility to us are the two most important elements in a new reformed immigration system. Very cool. Very cool ideas. Definitely take a look at that. Can I ask, are there any models of this elsewhere around the world? I mean, Canada, Australia, anybody else? So other countries in the world, famous, Canada is considered the mother of Pons. And their idea is, we'll give you points. for a college degree, a high school, points for English. But, you know, I think some countries love it. I don't think it has actually worked that well even for Canada.

Because what you don't want is someone scoring very high theoretically, but not getting a job. That's what the phenomenon of driving taxis in Toronto comes. Because you actually, in a free market account, most important thing, you have to have a job. So that's why we wanted employer sponsorship should be a key element to a bridge visa. Only when an employer has a need to sponsor you. And we have also checked the labor marketer so no U.S. worker is being displaced. Then you get the right to get the worker. And so the worker when he lands at JFK Airport has an address to go to forward.

Got it, got it. Well, there's a lot to talk about and unpack. maybe if you're a game for it, we could have you back at some point. But I really want to thank you for taking a time out on a Friday afternoon. I know, I'm sure you've got a something, a cocktail or something waiting for you out there. I'm not sure. Too early for cocktails. I've got it.

I'm going to go to the gym. I need to go to the gym after this week. So blow off some steam. But it was really good to see you. Thank you so much for having me. And glad to come back. I seek this further. Thank you so much. And dear listener, I hope you enjoyed that and found that fascinating. I sure did. And we'll talk to you soon. Take care now.

Thank you, folks. Thanks, everyone. Thank you. Thank you, Buzz.