The Political Economy of Immigration and Its Linkages to Trade Policy

The Political Economy of Immigration and its Linkages to Trade Policy

The ongoing global economic recession and stubborn unemployment rates since the financial crisis of 2008 have heightened both the urgency and sensitivity of policies that impact the economic state of the United States and its workforce. Among these controversial policies is the question of how to deal with immigration—the movement of people or the migration of labor from one country to another—and how to address its distributional effects across different populations, particularly among low-skilled, low-income American workers.

In recent months, there has been cautious optimism about the possibility of achieving bipartisan support for comprehensive immigration reform after decades of stalemate. In January 2013, the Senate’s powerful “Gang of 8,” a coalition of 4 Republicans and 4 Democrats, released a bipartisan framework to create a path forward for the 11 million undocumented workers in America, and are only steps away from introducing a bill on a guest workers program, in which business and labor have agreed to compromise on the difficult issue of wage setting for foreign workers. In the spirit of progress, the New York Times noted in a recent editorial, “It has been amazing this year to watch immigration reform, that perennial train wreck of an issue, keep rolling forward without losing steam or blowing up…every week seems to bring new reason for optimism.”

A myriad of stakeholders, spanning from local governments to political parties to companies with specialized labor needs, have also helped increase the nation’s attention to the inevitable demographic shifts in political participation, interest group membership, taxpayer makeup, welfare allocation, and other areas in which immigration has left its mark. In fact, since the presidential election of 2012, the Republican Party has strived to change its messaging on immigration to be more inclusive of a growing immigrant electorate and...