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  • Article: Economic Growth and Stifling the Buying of Goods and Commodities by the Undocumented by Alan Lee, Esq

    Economic Growth and Stifling the Buying of Goods and Commodities by the Undocumented

    by


    Does anyone really believe that President Trump really knows what he’s doing with the economy? Last week’s revelation of the February memo by Matthew Albence, head of ICE Enforcement and Removal Operations (ERO) that all undocumented immigrants are to be targeted instead of just those who have committed crimes – “effective immediately, ERO officers will take enforcement action against all removable aliens encountered in the course of their duties” – promises to further shrink the economy all by itself as undocumented immigrants refuse to venture forth except for essential trips. Anecdotal evidence already suggests that many undocumented immigrants have gone from reaching out into communities to closing in amongst themselves. When the purchasing of consumer goods and commodities by 10-11 million individuals out of the US total population of 320 million (over 3%) is severely compromised by fears of arrest, and when long-term purchases of washers, refrigerators, ranges, TVs, vehicles and homes are no longer seen as practical, there is a blow to the economy. Big-box stores and manufacturers are starting to feel the cruel pinch as the undocumented shop less often and closer to home. It should also be remembered that the 3+% purchase more than their share as the vast majority of them, 85.9%, in a 2012 study, were between 18-54 years, prime ages for establishing families and purchasing cars, homes, and all the other accoutrements of living. A 2016 study, “The Economic Impacts of Removing Unauthorized Immigrant Workers” by the Center for American Progress, found that a policy of mass deportation would immediately reduce the nation’s GDP by 1.4% and ultimately by 2.6%, and reduce cumulative GDP over 10 years by $4.7 trillion.

    This is already being reflected in the economic numbers of growth as cited in The New York Times article of July 6, 2017 “Hopes of ‘Trump Bump’ for U. S. Economy Shrink As Growth Forecasts Fade” that the Federal Reserve Bank of Atlanta now expects second-quarter GDP growth figures to come in at 2.7%, more than a full percentage point below where it was in May, and a decline even since the beginning of the week. This is happening at a time of almost full national employment when with all cylinders firing, GDP would be expected to rise.

    But it is also a certainty that with the unemployment rate at almost full employment (4.3% in May and 4.4% in June), the day of reckoning will come when there will be a sharp upsurge in wages and with it an attendant sharp increase in inflation. The two go hand-in-hand although the veteran head of the Federal Reserve, Janet Yellen, appears ready to make moves to hold inflation in check even as her job is rumored to be in danger by Mr. Trump. The relief valve of hiring undocumented immigrants is almost closed because of the attention and penalties attached to the act of hiring. The purchasing power of raised wages will sooner or later be eroded by the passing on of costs or shrinkage of packages such that a loaf of bread may in the near future cost $6, a gallon of milk $8, and a pound package or 2 liter bottle further reduced in size.

    Mr. Trump’s “Americans First” and “Hire Americans” slogans ring hollow and hollower given the state of the economy at almost full employment. There are pockets of unemployment, most in the red states, but the answer cannot seriously be to bring back antiquated factory and coal mine jobs in the Rust Belt and red states as those factory jobs are even now being shipped overseas and most factory line people replaced by robotics and coal technology replaced by a mixture of cleaner fuel alternatives. Such as the Blacks in the country migrated north for jobs in the first half of the 20 th century, those in the South or in other parts of the country without full-time jobs should consider moving to where employers are dying to hire people. In a June report by U.S. News & World Report, the 10 best states to find a job based upon unemployment rate, growth of available jobs, and percentage of people either looking for work or working were Utah, Colorado, North Dakota, Massachusetts, South Dakota, New Hampshire, Nebraska, Minnesota, Iowa, and Vermont. As Mr. Trump is discovering, being tough on trade does not work when you do not hold the cards and other countries or regions can retaliate (bar or put stiff tariffs against for example soybean farmers in Illinois, Iowa, Indiana and Nebraska or bourbon makers in Kentucky and Tennessee) or bring suit against the U. S. in the World Trade Organization (WTO).

    In addition, the Republican playbook to boost the economy appears in trouble at this time. It was initially to push health care legislation and then use health care savings to fund huge tax breaks to companies and the wealthy which would then allow them to invest heavily into projects to promote further hiring of U. S. workers along with helping to fund public works projects to rebuild the transportation infrastructure of the country. However, the latest numbers released by the Congressional Budget Office (CBO) on June 26 on the Senate’s June 11 “Better Care Reconciliation Act” health plan estimated $321 billion in deficit reduction from 2017 to 2026, but the savings would be achieved on the backs of 22 million less insured people by 2026 than would be insured under Obamacare. The fury caused by the CBO numbers forced many Republican senators to forgo holding town hall meetings, marching in parades, or otherwise meeting angry constituents during the Fourth of July recess. Many of the people affected by the bill are in red states.

    In the wake of setbacks across the board caused by the firing of FBI director James Comey and Mr. Trump’s further entanglements in what could turn out to be Russia-gate, the Republican Party is looking for any victory whatsoever, and willing to settle for less savings on the healthcare bill to take the attention off of the burgeoning Russian scandal which threatens the legitimacy of the Trump presidency. And if it cannot accomplish even that, it is willing to take a defeat on a final vote just so it can say to its base that it tried very hard to fulfill its seven-year promise to repeal and replace Obamacare. To this end, the Republicans put forth a revised Senate bill on July 13 which would add $45 billion to combat opioid addiction, $70 billion to the states to help drive down premiums, and a provisional section to allow insurance companies to sell cheap insurance plans not covering much as long as they sold one policy that did. It would further keep Obamacare’s taxes on investment income and payroll for high earners, which The New York Times estimated would account for $231 billion over a decade. Of the 50 (out of 52) Republican senators required to vote "yes" on the legislation, two as of the time of this writing have already come out against it, Senators Rand Paul of Kentucky and Susan Collins of Maine.

    It should be noted, however, that even if the Republicans push through their health care legislation package, their plan for economic success hinges upon “trickle down” economics in which the monies given to companies and wealthy individuals result in additional investment with job creation and better wages “trickling down” to the masses. Unfortunately “trickle down” has been disproven as an economic theory through the presidencies of Ronald Reagan and George H.W. Bush (Mr. Bush to a lesser extent). Although Mr. Reagan managed to grow the economy, that was due not only to lowering taxes for businesses and wealthy individuals, but also increasing government spending by 2.5% a year, a move almost tripling the federal debt and stoking inflation fears that contributed to a later recession under President Bush. It may well be that – as demonstrated over and over again over the course of this new presidency – that the Republicans are more interested in short-term results than in the long-term health of this country.

    And in another nonsensical move, the Administration on July 11 rolled out a federal regulation to delay the date while planning to rescind the new international entrepreneur rule due to come into effect on July 17, 2017, which would have provided a period of parole of up to 5 years for the best and brightest entrepreneurs to implement ideas to strengthen the country’s technological advances. The Administration step astounded executives of successful startups as the entrepreneur rule was designed to not only advance innovation, but also create U. S. jobs.

    The path to true growth has many components, but taking steps to damage the purchase of goods and commodities by a sizable share of the nation’s population is not helpful where other options lack promise and the Administration stifles an initiative designed to create jobs and keep the U. S. competitive with the rest the world in cutting-edge technologies.

    ‡ This article © 2017 Alan Lee, Esq.


    About The Author

    Alan Lee, Esq. Alan Lee, Esq. the author is an exclusive practitioner of immigration law based in New York City with an AV preeminent rating in the Martindale-Hubbell Law Directory for 20+ years, registered in the Bar Register of Preeminent Lawyers, on the New York Super Lawyers list (2011-12, 2013-14, 2014-15, 2015-16), and recognized as a New York Area Top Rated Lawyer. He has written extensively on immigration over the past years for Interpreter Releases, Immigration Daily, and the ethnic newspapers, World Journal, Sing Tao, Epoch Times, Pakistan Calling, Muhasba and OCS; testified as an expert on immigration in civil court proceedings; and is a regular contributor to Martindale-Hubbell's Ask-a-Lawyer program. His article, "The Bush Temporary Worker Proposal and Comparative Pending Legislation: an Analysis" was Interpreter Releases' cover display article at the American Immigration Lawyers Association annual conference in 2004; his 2004 case in the Second Circuit Court of Appeals, Firstland International v. INS, successfully challenged Legacy INS' policy of over 40 years of revoking approved immigrant visa petitions under a nebulous standard of proof, although its central holding that the government had to notify approved immigrant petition holders of the revocation prior to the their departure to the U. S. for the petition to be able to be revoked was short-lived as it was specifically targeted in the Intelligence Reform Act of 2004 (which in response changed the language of the revocation statute itself). Yet Firstland lives on as precedent that the government must comply with nondiscretionary duties established in law, and such failure is reviewable in federal courts. His 2015 case, Matter of Leacheng International, Inc., with the Administrative Appeals Office of USCIS (AAO) set nation-wide standards on the definition of "doing business" for multinational executives and managers to gain immigration benefits.


    The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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