The chess-like back and forth over the Deferred Action for Childhood Arrivals (DACA) policy is reaching a climax as the Trump administration revealed its endgame with a list of demands it recently delivered to Congress. The list includes items such as the construction of a wall across the southern border, the hiring of 10,000 immigration agents and an end to people bringing their extended family into the United States.
This list certainly signals the intention to broaden the debate into the larger arena of illegal immigration. While it is a highly contentious social topic, investors and issuers, working from a practical standpoint, see DACA repeal carrying unavoidable workforce impacts and wide-casting ripple effects. These effects will materialize as risks for many issuers who have relied upon trusted employees who may now suddenly be caught in a citizenship trap. Employers are scrambling to understand their rights and the rights of their most valuable assets – their employees.
Since June 2017, 34 law firms have issued memos offering updates to deadlines, guidance to employers and employees and preparing practice areas for an influx of legal inquiry. Almost immediately after the announcement to end the deferment, hundreds of CEOs – including those of tech giants Apple and Microsoft – began urging President Trump to reconsider. As with the vehemently opposed travel ban, many began immediately working with legislators and judicial branch officials to find alternative solutions.
According to a Center for American Progress study, the estimated loss of DACA workers would reduce U.S. GDP by $433 billion over the next 10 years. Further, a CNBC survey found that 21 percent of small business owners expect changes in immigration policy to have a negative effect on their business.
A 2014 CATO Institute survey found that of DACA recipients:
- 59 percent reported getting their first job.
- 45 percent received a pay increase.
- 49 percent opened their first bank account.
- 33 percent got their first credit card.
Ultimately, a Center for American Progress study recently estimated that 91% of DACA recipients have found gainful employment. Many, if not most, economists believe that holding the DACA program to the fire in order to gain better leverage in the immigration debate is economically irresponsible.
While the DACA repeal may not be absolutely devastating in the long run – thankfully the American economy is large and resilient – it represents another example in which businesses are moving away from the Trump administration’s decisions and positions.