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Trump's Move against Salvadorans Won't Make Them Leave — or Help U.S. Workers

11 Jan 2018

David Bier

Trump administration officials announced this
past week that the government would terminate provisional residency
permits for about 200,000 Salvadorans next year. The decision is
part of President Trump’s “America first” agenda,
restricting the rights of immigrants in order to protect U.S.
workers. But, as previous immigration experiments demonstrate, the
policy will not aid American workers. And it certainly won’t
make Salvadorans pack their bags. Trump’s order is likely to
have the opposite effects.

President George W. Bush granted Salvadorans
temporary protected status (TPS) after devastating earthquakes hit
El Salvador in 2001. He and President Barack Obama repeatedly
extended the status. Beyond its humanitarian impact, TPS provides
significant economic benefits. It doesn’t give applicants access to any federal welfare
— so there are few costs — but it does grant the legal
right to work. And Salvadorans with TPS work at very high rates:
Eighty-eight percent
participate in the labor force, compared with 63 percent of all

Legal employment has helped Salvadorans achieve a relatively
high standard of living. The median household income for
Salvadorans with TPS is $50,000, higher than the
roughly $36,000 for unauthorized immigrants. Their higher wages,
combined with the lack of public benefits, has been a big win for
U.S. taxpayers.

Canceling TPS will make it illegal for these Salvadorans to
work, but it’s unlikely to force them home. In 1990, President
George H.W. Bush granted TPS to some 185,000 Salvadorans during
the country’s civil war, and when President Bill Clinton canceled
their status in 1996, few returned.
Deportations rose only slightly, and many
Salvadorans just worked illegally until 2001.

The decision to cancel
protections for 200,000 immigrants will backfire.

At this point, 28 years since the original TPS designation and
17 years since the subsequent one, the incentives to stay will be
too large for any mass migration back to El Salvador. Trump can try
to drive them out with immigration raids and increased
deportations, as other presidents have tried, but the highest
percentage of unauthorized immigrants deported in a given year is
2.1 percent -
three times
the amount this administration deported in 2017.

Losing the legal right to work doesn’t prevent immigrants from
finding jobs. They can use fake or borrowed documents from U.S.
citizen family members, or employers can pay them off the books.
Illegal employment, however, pays less than legal employment
— employers compensate for taking
the risk of hiring someone who may be here illegally.

Researchers discovered this effect in the 1980s, when employers
began facing penalties for hiring unauthorized immigrants. In 1986,
Congress paired such sanctions on employers with a program to
legalize 3 million unauthorized immigrants. After 1986, illegal
immigrants received lower wages
than legal immigrants for the first time.

Rather than discouraging unauthorized immigrants from finding
jobs, however, lower wages incentivized them to take on additional
jobs to make up the difference. After the sanctions were
implemented, unauthorized immigrants worked more, and their labor
force participation rate rose . Meanwhile,
the employment rate among the immigrants legalized by the 1986 bill
dropped , especially
for women.

A similar experiment has played out in Arizona since 2008, when
the state mandated E-Verify, which checks employees’ identification
against federal databases. While it has been ineffective - workers can
still borrow documents — it has lowered wages for
unauthorized men. But this has incentivized more spouses
to work, causing more illegal competition for jobs.

In the short term, many employers will choose to play it safe
and fire the Salvadorans losing TPS, even if they know that other
employers will hire them later under borrowed identities. This
turnover will needlessly harm the immigrants and
at least $1 billion in costs for companies to find, hire
and train new staffers — costs that U.S. consumers will end
up paying.

And the lower wages for unauthorized workers are not likely to
force them out. Central American immigrants’ salaries are between
250 and 300 percent higher in the United
States than in their home countries for the same work; a modest 10
or 20 percent decline in pay is simply insufficient to persuade
many people to leave.

Moreover, the lower wages could result in Salvadorans sending
less money back to El Salvador. Because so many people there rely
on money sent from abroad — which accounts for 17 percent of the
country’s gross domestic product — even more Salvadorans
could end up heading north illegally. The TPS cancellation might
not only fail to discourage illegal immigration, it could encourage

Even if the complete removal of all TPS beneficiaries were
achievable, U.S. workers wouldn’t benefit. The most relevant
evidence comes from the 1964 cancellation of the bracero guest
worker program, which had allowed seasonal workers to enter the
United States legally for more than a decade.

Proponents claimed that eliminating the guest workers would
increase wages on farms that had many such workers — those
farms lost about a third of their seasonal workforce — but
wages on these farms did not risecompared
with those on farms without many guest workers. In fact, in the
years after the program’s end, they rose more slowly than on farms that had never hired
guest workers.

Farmers grew crops that required fewer workers, produced fewer
crops or adopted technology to harvest them. They did not raise
wages. To the extent that the TPS cancellation results in more
Salvadorans leaving the United States, no evidence suggests that
Americans will benefit.

Trump’s decision to cancel Salvadorans’ TPS won’t decrease
illegal immigration or protect Americans from foreign-worker
competition — it will increase illegal immigration and labor
force competition. U.S. businesses will needlessly endure major
compliance costs. The government will lose tax revenue. And it will
bring fear and pointless suffering for Salvadoran residents of this
country, many of whom have built their lives here over decades.
They don’t deserve to be thrown into turmoil for a policy that is
doomed to fail.

David Bier is
an immigration policy analyst at the Cato Institute.

Click here to view the full article which appeared in CATO Journal