The Brookings Institution recently released a report titled “An Executive Order Worth $100 Billion; The Impact of an Immigration Ban’s Announcement on Fortune 500 firms Valuation,” in which they attempted to paint President Trump’s guest worker pause as a huge financial loss for American corporations. The overall claim, as evidenced by the title, is that the executive order, which temporarily pauses most guest workers programs due to the COVID-19 pandemic, will result in a loss of $100 billion from the U.S. economy.
These loses are supposedly the result of Fortune 500 companies no longer having access to enough labor. However, this assessment is based on faulty assumptions, leading to extremely misleading conclusions.
To determine which companies would be the most impacted, the report estimated reliance on foreign-born workers by looking at the “Labor Condition Application” requests to the federal government for new H1-B visas. Based on these criteria, the authors then concluded that the executive order had a negative effect since the stock values for these companies dropped by a total of 0.45% after the announcement, or a value $100.14 billion.
The biggest problem with this approach is that it only looks at a very brief snapshot in time, and assumes that all stock changes were due to the executive order. This is a highly improbably scenario.
For example, IBM (one of the largest employers of H-1B visa holders), saw it’s stock drop from $122.12 per share on the day the executive order was announced, to 122.01 per share the following day. Not only is that an inconsequential change of less than 0.001 percent, it was a smaller drop than the stock had experienced in the days prior to the executive order being announced. This evidence strongly suggests that the corporation’s small drop in stock had little or nothing to do with the executive order.
Analyzing only a minimal time range for stock value changes during a turbulent time is a dishonest and inaccurate manner of judging whether a new policy will positively or negatively impact a company. In fact, when a longer time period is examined for the companies covered in the Brookings report, most have enjoyed record stock growth. So, by the logic presented in this study, it could be concluded that the executive order has caused these companies to enjoy great financial success over the long run!
The overall narrative being promoted by Brookings, along with other open-borders advocates, is that even in a time when tens of millions of people have lost their jobs, the United States needs more foreign workers. However, this myth has been thoroughly debunked. In fact, even before the onset of the COVID-19 pandemic, these same companies were firing Americans by the thousands in favor of foreign-born workers who were willing to work for a below-market wage.
The executive order signed by president Trump gave American workers a second chance during a difficult time. And, if any tech companies lost profits due to the move (which the evidence suggests they didn’t), it would have been due to them unfairly paying foreigners a less-than-market wage.
No one should bemoan the prospect of a corporation losing their ability to cheat the market by paying unfair wages. On the contrary, they should be celebrating that potentially hundreds of thousands of Americans now have a chance to re-establish gainful employment. And these gains in American employment would more than offset any short-term, minimal drop in stock prices.