The Trump effect strikes the U.S. economy

Since his electoral campaign, Donald Trump has repeatedly promised building a wall along the border with Mexico, which the latter would pay for. With that xenophobic rhetoric, he mobilized and maintains the support of one of the demographic sectors that constitute his “strong political base”: his most loyal and trusting constituents. However, today he is trapped, stuck in between a federal budget proposal and his absurd promise that is intended to resolve an artificial problem. In summary, the wall is an utter deception.

Why is it an artificial problem or deception?

Except in a section where it is, literally, impossible to cross it, the U.S.-Mexico border is already protected by a tall fence. This boundary, built on U.S. territory, was chosen at the time as an alternative to a wall, because security agencies prefer the possibility of looking through the fence to see what is happening on the other side. Incidentally, these security forces responsible for border security and customs add a force of more than 45,000 agents, and more than 25,000 whose activity is concentrated at the critical areas of the border crossing.

On the other hand, according to the PEW Center studies, in the last decade the migratory movement of undocumented people coming from Mexico is lower than the number of immigrants who have returned to that country. This phenomenon is due in part to both the relative improvement of the Mexican economy and the seasonal or temporary work permits possible under the guidelines of the renegotiated NAFTA—renamed USMCA trade agreement.

The migration pattern of people that arrive through the Mexican border—and that created the current public opinion crisis—originates in the Central American northern triangle. Fueled by the violence generated by organized crime, this displacement of families and minors in search of asylum has oscillated between 60,000 and 115,000 migrants per year, depending on the severity of the crisis in the subregion. The increase is associated with the lack of U.S. investment in cooperation programs for development. In particular, the Trump administration stopped executing the initiatives instituted by the Obama administration. Let’s not forget, however, that the big market of all organized crime harbored by drug trafficking has its final consumer market in the U.S.

Furthermore, the Department of Justice figures indicate that Latino immigrants aren’t a problem in criminal instances. On the contrary, they constitute the ethnic group with the smallest percentage in the commission of crimes against people and property. In that sense, it is pertinent to remember that the Obama administration promoted a migration reform with a pathway to citizenship and decreed migratory protections for young dreamers (DACA) and their parents (DAPA), just as he renewed the temporary protective status (TPS) for a group of countries (i.e. Nicaragua, El Salvador, Haiti). He also carried out an important policy of deportations that included people of recent entry, with very short stay in the country, as well as a significant contingent of undocumented persons prosecuted for crimes.

The S&P 500 hits a year low in December 2018 amidst federal government shutdown and trade war with China

With respect to the economy, the U.S. has continued to add jobs in the private sector at a constant rate since 2010 up to date. Now it has full employment (less than 4% unemployment), including the immigrants whose work hasn’t reduced employment opportunities for the economically active population. In terms of salary, undocumented immigrant labor is noticeably less expensive than the federal minimum wage of $7.50 an hour. The gap is even larger in states such as California, where the state minimum wage is $11.00 an hour. Therefore, from a salary perspective the problem can be handled differently, without depending on the migration matter. Even solving the immigrants’ documentation for their legal entry into the labor market would bring about positive results on the average minimum wage, by accelerating the country’s economic growth, according to various prestigious think tanks in the country. Indeed, the majority of americans view immigration as a strengh to our country, according to PEW Center’s research.

As a consequence, all elements of the anti-Hispanic border immigration rhetoric are a great deception, because they have been formulated to address a problem that does not exist.

Building a wall along the border would imply a cost of at least 26 billion dollars (estimated by Trump’s own government) and, to start 2019 off, they need Congress to approve a 5 billion dollar budget. It’s obvious that the investment plan and infrastructure maintenance, urgent for the U.S., would be sensible if it tried to solve migration and economic problems, instead of going towards a useless wall. The former would have to include a financing program to assist the development of the Central American northern triangle, of about 400 million dollars a year. Not to mention another important fact, immigration growth these days does not come from the border with Mexico as much as it comes from Asia, also a contigent that represents a valuable contribution to our society.

Not withstanding, against reality and reason, Trump insists on asking for money to build the wall (without investing an additional cent in the country’s infrastructure). Aware that there is no parliamentary majority for that, not even among the congressmen of his own party, he penalizes by paralyzing the federal government’s activity for lack of budget in the absence of a law or resolution authorizing public spending in general. This federal government shutdown—for which Trump put blame exclusively on himself for, when he met with the U.S. Congress Democrat leaders Senator Chuck Schumer and Congresswoman Nancy Pelosi—is an economic calamity that adds to the collapse of the stock markets, due to the uncertainty of the trade war with China, now aggravated by this budgetary impasse.

But that’s what Trump wants. What we are seeing—not the positive indicators that the economy was already producing and are now beginning to evaporate—is the Trump effect. The eccentric magnate turned president has added merits to an immense economic problem that looms in order to propose the construction of a monument to xenophobia. Meanwhile, we ask ourselves: Didn’t Trump say that Mexico was going to pay for that wall?

Para español lea Al Navío: La economía de EEUU comienza a sentir el efecto Trump

Nos leemos por twitter @lecumberry