America is in "desperate" need of new immigrants, says ... Trump's chief of staff?

Has the White House gone soft on immigration? Or do they see economic growth as a higher priority in the coming months? Mick Mulvaney definitely left the impression on attendees at a private meeting in the UK that the Trump administration wants more dynamism to keep the expansion rolling, telling them that the US is “desperate” to get more immigrants into the US.

Donald Trump’s chief of staff emphasized that they want legal immigration, but even that cuts against the grain of their policy up to this point, as the Washington Post points out:

Acting White House chief of staff Mick Mulvaney told a crowd at a private gathering in England on Wednesday night that the Trump administration “needs more immigrants” for the U.S. economy to continue growing, according to a audio recording of his remarks obtained by The Washington Post.

“We are desperate — desperate — for more people,” Mulvaney said. “We are running out of people to fuel the economic growth that we’ve had in our nation over the last four years. We need more immigrants.”

The Trump administration wants those immigrants to come in a “legal fashion,” Mulvaney said, according to the recording.

Mulvaney’s remarks appear in contrast to the public position of several top figures in Trump’s White House — especially that of senior policy adviser Stephen Miller — who have been working to slash both legal and illegal immigration via a slew of policies that aim to close off the U.S. border to foreigners. They have insisted that the steady arrival of newcomers depresses wages for the blue-collar U.S. workers whose votes helped lift Trump to the presidency in 2016.

Is Mulvaney staging some sort of protest from within the inner circle? In the same speech, Allahpundit points out, Mulvaney also ripped Republicans for being deficit hypocrites, although that might not apply to Trump, who has consistently shrugged off concerns over deficit spending. “The worst thing in the whole world is deficits when Barack Obama was the president,” Mulvaney reportedly said, “then Donald Trump became president, and we’re a lot less interested as a party.”

True enough, but on the topic of immigration, Mulvaney may not be speaking out of school at all. Yesterday evening, Politico’s Anita Kumar reported that the Trump administration will shortly roll out a new proposal to expand legal immigration and add large numbers of foreign workers. The move comes in part to satisfy demands from the business sector over concerns about limitations on economic growth:

In recent months, the administration has been in talks with senators about legislation that would create new categories of temporary worker visas or lengthen the allotted stays for those workers, among other possible changes, according to four people familiar with the discussions.

A White House official confirmed the ongoing negotiations on the guest worker proposal and said the effort is an attempt to generate action on a smaller immigration proposal after a larger one stalled and won few adherents.

“We’ve also been listening to stakeholders,” the official said. “We’ve also developed points of view on what the temporary system should look like.”

A broadening of temporary worker visas is a policy change the business community has long sought, arguing companies in industries like construction and agriculture can’t hire enough workers to meet demand. But immigration activists seeking to reduce migration worry such changes would raise the number of foreigners coming to the U.S.

In that context, Mulvaney sounds less like a palace insurrectionist and more like a forward strategist. Once this project rolls out — if it rolls out at all — they will need to have lots of voices in support of their argument that the economy needs more dynamism to maintain high growth. The White House knows full well that there will be a howl from hardline restrictionists who want to keep even the legal numbers lower, in order to drive up wages. Business owners will want more competition to keep wages from going up too fast and squeezing out the potential for expansion.

That tension is exactly what The Economist pointed out last week about Trump’s gain in wage growth over the past two-plus years. They acknowledged that the gains about which Trump often brags are substantial and real, but the policies that created them will choke economic growth if left too strict:

The lesson from all these papers is that, over time, the economy adjusts to a fall in the number of immigrants. In the short term, native workers may well see a wage boost as labour supply falls. But businesses then reorient production towards less labour-intensive products; natives take jobs previously occupied by foreign-born folk, which may be worse paid; and bosses invest in labour-saving machinery, which can reduce the pay of remaining workers.

Even the apparent short-term benefits to wages are a poor economic argument for tough immigration restrictions. Migrants have economic effects far beyond the labour market. They spur innovation and entrepreneurship and they help create trade links between America and their home countries. Both low- and high-skilled migration are linked with higher productivity.

As America ages, it will need a lot more people willing to work in health care. Study after study finds a positive association between immigration and long-run economic growth—and therefore, ultimately, the living standards of all Americans. The Trump administration’s immigration restrictionism may achieve a temporary boost in wages of the low-paid now, but at a cost to the country’s future prosperity.

The White House apparently sees this as a major issue for economic growth, too. Otherwise, they wouldn’t run the risk of backing away from the restrictionists this close to an election.

They still have a good argument on immigration, even with expanded entry numbers, as I wrote on Tuesday. Controlling the border and reducing illegal immigration gives the US an opportunity to rationally add more legal immigrants without unduly harming wage-growth opportunities for those already here:

The point of controlling for illegal immigration is that it allows us to more rationally plan for legal immigration. We cannot strike a balance on the latter without eliminating the former. Once we put an end to illegal immigration (or get as close statistically to that goal as possible), we can then begin planning for low-skill labor needs the same way we do for higher-skill foreign labor needs. If these levels of legal immigration are too low, then we can raise them, confident that the increase won’t do undue damage to lower-skilled native labor.

Mulvaney might be test-marketing that message abroad to fine-tune it for domestic consumption soon. If nothing else, at least it gives Trump an opportunity to argue in the election that he tried to work with Democrats to expand immigration opportunities within the law. As long as he doesn’t anger his base too much over this flashpoint issue, it’s not a bad electoral strategy.

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