President Donald Trump never tired in his campaign of bragging about his degree from the Wharton School of Business. We couldn’t help but notice that Wharton has shredded the anti-immigration RAISE Act that Trump endorsed:
“Penn Wharton Budget Model projects that contracting net legal immigration will decrease GDP relative to current law, despite changing the skill mix toward more educated immigrants. If immigration is decreased by 50 percent, the economy will be two percent smaller in 2040, even though 75 percent of those immigrants will now have at least a college degree. Between now and 2040, the economy will grow at about 1.6 percent per year on average rather than about 1.7 percent.”
Wharton’s analysis continues: “The RAISE Act also reduces employment because the domestic worker participation rate won’t increase enough to fill the jobs that would have been held by immigrants who are no longer allowed in the country. . . . In its first year, under the RAISE Act, we project 92,538 fewer jobs. After 10 years, job losses increase to 1.3 million relative to current law. By 2040, 4.6 million jobs are lost.” In sum, the RAISE Act “will lead to less economic growth and fewer jobs than otherwise. Job losses emerge because domestic workers will not fill all the jobs that immigrant workers would have filled. While in the short run the RAISE Act leads to a small boost to per capita GDP, in the long run per capita GDP dips slightly.” Put differently, there is no economic justification for the bill.
That leaves several explanations as to why Trump, who from time to time has praised legal immigration, would jump on the bandwagon: 1) Stephen K. Bannon, advocate of “blood and soil” nationalism, told him to; 2) Trump didn’t learn much at Wharton and doesn’t have a college freshman’s grasp of labor economics; or 3) Trump knows it’s a ridiculous bill…