Series 26 | Part 4: Merit-Based Immigration

Taking it one step at at time, let’s look at the skills-based rationale of the RAISE Act.

It claims to be a merit-based system where you get a certain number of points from zero to 100. You need at least 30 apply and you should plan to have 40 to have a chance, However, you get 25 for being a Nobel Prize winner or winner of a “major international award,” which is clearly defined, and 15 points if you have earned an Olympic medal in the last eight or fewer years. Therefore, 40 points are already removed for practically 100% of people. Therefore, the new maximum becomes 60. Additionally, the new maximum for 99.9999% of people goes down from 60 to 48 because most people won’t be bringing a Ph.D and $1.8 million in foreign currency. Finally, given all the field requirements before your institution would officially confer your degree, it’d be awfully hard to obtain your Ph.D before you’re 31, costing almost everybody another two points. So your new maximum is 46, and the minimum is still 30.

The upside is that you have less to worry about with a score of 35/100 when almost no one is getting higher than a 46. I suppose 35/100 is 35% or a huge F or failing grade but 35/46 is a C, which I suppose is average. Therefore, 35 may actually get you into the U.S. Maybe.

I do need to mention a crucial point, which is that Barack Obama had already shifted the United States immigration policy in the direction of a meritocracy, but he did not plan to exclude people while attempting to look like he cares.

Trump also claims that foreign workers have kept wages artificially low by allowing businesses, which may be true, but this plan doesn’t fix that because the salary of someone who actually qualifies to come here would still be lower than what you’d have to pay an American. There just wouldn’t be very many coming here. With so many job openings to fill with perhaps an equal number of job seekers, those jobs would go to Americans since they’re the only ones available, but their salaries wouldn’t be higher because there’s no shortage of workers such that companies would get into a bidding war in which a company raises their salary offer so that a worker chooses them instead of a different company. I don’t know that there’d be a surplus of workers either, such that workers would have to get into a bidding war with each other to lower what salary they’d be willing to accept. Surplus labor supply for these critical industries just can’t happen because those workers might be willing but couldn’t fill the positions because they don’t yet have the skills. Therefore, the RAISE Act isn’t like to raise wages and, in the long-run, with a surplus or educated workers, wages could actually come down.

An additional thing to mention, by the way, is that we could actually be incentivizing someone with a lot of money, only “Moderate” English, and not much skill to come here first and start a business that then restricts hiring to only people from his or her own country who maybe don’t have a lot of money but qualify to come here because of their skills. They wouldn’t be American, and they’d qualify. So the RAISE Act, in short, doesn’t work.

In reference to the Opioid Epidemic, Trump said that going after suppliers never works because, as long as there’s demand for drugs, there’d always be someone willing to supply them no matter the risk. So he wants to go after the victims. However, he’s going after labor demand (companies) instead of labor supply (workers) in this case, and with his logic, if there’s labor demand, there will always be someone willing to provide labor supply.

I’m not trying to poke holes in it! Just, with a full analysis, it doesn’t hold water well.

I talked about foreign investment, money coming in from abroad, as a separate issues from international competitiveness, but the effects of the RAISE Act on each of these issues is really the same. Basically, Trump wants us to be the best, and he thinks by getting the best people, keeping people he thinks are liabilities out, and training people who are already here that we can accomplish that. However, other countries may be trying to do the same thing, and the RAISE Act leaves open loopholes, though not much more than loopholes you’d only find if you were looking for them.

Since he’s trying to reduce exploitation of loopholes and those exploiters are looking, they’ll probably find them. Even I found a couple, and I’m definitely not an outsourcing company looking to hire people from abroad to package job descriptions in a way that can be sold overseas to countries that do have excess labor supply for a very cheap price even including some training costs.

Basically, large companies from India who are already doing this can still run outsourcing companies that exist solely to automate jobs and send them back to India. They figure out all the details, put together training plans and educate Indian workers via GoToMeeting or something else on the awesome Citrix platform. They bring in a few Indian people whose qualifications may fit the terms of the RAISE Act but whose actual job description is vague and focuses mostly on this job shifting back from the United States to India. Companies are Infosys, Tata Consulting, and Cognizant do this all the time, and they’ll be able to continue doing it.

Another loophole is to offer salaries much higher than anyone dreamed of getting and then not pay them more even though you’re giving them more responsibilities. That’s already common practice for American employees at most corporate offices. We even jokingly warn people not to ask for too much more responsibility because the raise that seems implied is really happening much anymore. Moreover, these workers would have to leave the country if they complain enough to actually get fired. Companies would at least be able to do this until workers get green cards, which is why you could switch employers without that new employer paying to sponsor you. At that point, if you’re qualified for the job, your immigration status would put you at the back of the line.

All of this can still happen under the RAISE Act.

Finally, this regulation will definitely hurt GDP growth in the medium term as well as the long-term. There will very likely be short-term gains, and I don’t think that has as much to do with wanting to be reelected as it has to do with the mentality that short-term gains are good and long-term declines are not his fault.

Once Trump gets his tremendous increase in GDP, it’ll crash due to excessive risk, low wages that can’t support the consumer economy (the “C”), low taxes (that “T” I told you about…there it is) that can’t support government spending (the “G”) in industries dependent on government contracts, and of course the lack of confidence and subsequent investment and hiring due to a declining stock market when Trump’s government doesn’t step in to stabilize GDP via government spending because he doesn’t want to and can’t afford because he was taxing those who have little they can pay and not taxing people and corporations who have a lot they can pay!

While we’re at it, other issues with government spending that are actually moot are spending on affordable housing, healthcare, etc for refugees and others just starting out in the United States. It doesn’t matter because we don’t have to worry about having those funds since Trump wouldn’t allow anyone in that would need those funds. So, when Trump doesn’t pay for these assistance programs that help millions and millions of people, you can sleep well knowing that he’s not cutting funding for as many people as you’d think. I’d probably just take a nap instead of sleeping through the night because, well, those people our government is responsible for helping get on their feet are going to continue suffering overseas and dying overseas because Trump turned his back on them.

That brings me to the topic of culture. Our country is known for something: helping. We’re known for bringing in people that nobody else wants. That perhaps is our culture. We help people in need, whether it’s marathon runners so exhausted after the Boston Marathon but finding a sense of purpose and meaning of life in helping those hurt and in danger during the 2013 Boston Bombing or whether it’s a more abstract form of assistance wherein we think about prosperity and happiness and freedom in terms of their comparative levels between our country and other countries. The manifestation of those feelings doesn’t really look like what the RAISE Act is asking us to do. There’s a mismatch.

Trump wants to stop the Diversity Visa program, which basically sums up our culture: sure you can come in, don’t even think twice, we love you. It has no ties to the economy or anything else. It’s blind to where you come from. It doesn’t care who you are or where you came from. Trump wants to end that, and that’s entirely because he doesn’t have those feelings. He doesn’t feel that way about people from other countries.

Note that this is the breakdown of people coming here legally. Not so much from diversity, therefore not fixing much:


Also note that I mentioned Trump wants to bring in parents of U.S. citizens. As you can see, that’s already happening a lot.

He also wants to reduce the annual number of refugees to 50,000, which shows he not only cares very little about you regardless of where you come from but cares even less about you if you’re worse off.

He also wants to enforce the way we define a “family” unit. He wants to force other people overseas to agree that a family includes just parents and kids. Therefore, Trump doesn’t think a family with grandparents, aunts and uncles, or cousins isn’t really a family, and he wants to enforce that definition globally.

Clearly, this is going to upset many families. Frankly, I don’t think they’ll care much how Trump defines them, but I do think they’ll change the way they think of all of us because, which is a result that dramatically affects all of us when we travel and via their government’s foreign policy changes.

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