The Vast Economic Costs of Trump’s Plan to Bar Muslims from the United States

The Vast Economic Costs of Trump’s Plan to Bar Muslims from the United States

June 21, 2016

Donald Trump’s mindset and style virtually compel him to attack anyone who might be a threat or enemy, and he recruits supporters by going after groups he casts as their enemies or threats. His darkest suspicions and contempt are reserved for Muslims. He presents his solution, barring people from Muslim-majority countries from entering the United States, as a low-cost way to fight terrorism. But Trump’s plan would not only trample religious tolerance and a half-century of foreign policies to improve our relations with the world’s 56 Islamic nations; it also would impose enormous costs on the American economy.

Our analysis shows that immigrants and visitors from Islamic countries contributed $334 billion to America’s GDP in 2014 — all of it at risk under Trump’s approach.

Here’s how we estimate those costs. First, more than seven million current U.S. citizens or residents came here from Muslim-majority countries or are married to, or the children of, those immigrants. Based on America’s current per capita GDP, those households contributed more than $189 billion to the economy in 2015. In addition, Trump’s policy would end tourism from Islamic countries. At a minimum, some 3.2 million tourists from majority-Muslim nations visited the United States in 2015 and contributed an additional $145 billion to our GDP.

Let’s deconstruct those costs. First, Census Bureau data compiled by the Migration Policy Institute tell us that, in 2014, 3,013,309 current U.S. citizens or residents were immigrants from the world’s major Islamic countries, including 2,835,510 adults. The total number is higher, since Census data specify the country of origin for U.S. immigrants from the 21 larger majority-Muslin countries but not 35 smaller Islamic nations, including Libya, Somalia and Tunisia. Here, we’ll stick with the official data of more than 2.8 million current adult U.S. citizens and residents from Islamic nations.

Trump’s attacks on Muslims extend not only to those immigrants, but also everyone connected to them by marriage or blood who also reside here. ]According to the Center for Immigration Studies, the average family or household size of immigrants from the Middle East, sub-Saharan Africa and South Asia is 3.12. Let’s assume that half of those immigrants marry or live with other immigrants from Muslim countries, and the other half marry or live with native-born Americans or immigrants from other countries. On that basis, the 2,835,510 adult immigrants from Islamic countries would include 1,417,755 married to or living with each other, forming 708,878 households, and another 1,417,755 households with spouses or partners who are not immigrants from Muslim countries.

Altogether, they constitute 2,126,633 households headed by Islamic immigrants (708,878 + 1,417,755). Some of those households consist of one person, others of single parents with children, and still others with two adults with or without children. On average, we know that these households have 3.12 members; and on that basis, the 2,126,633 households with immigrants from majority-Muslim countries have 2,381,828 children living in the United States.
All told, therefore, we estimate that the households of current adult U.S. residents or citizens from majority-Muslim countries consist of some 6,635,093 people: 2,835,510 adult immigrants, 1,417,755 spouses or partners who are not from Islamic countries, and 2,381,828 children.

The simplest gauge of their economic impact is per capita GDP, which was $28,555 in 2015. That tells us that current U.S. residents or citizens from Muslim-majority countries and their immediate families or households were responsible for $189,431,905,200 of U.S. GDP in 2015.

Trump’s ban on people from Islamic nations entering the United States also would end tourism from those countries. The Bureau of Economic Analysis (BEA) collects data on foreign tourists entering the United States by their continent of origin and how much they spend here as tourists. The BEA does not break down these numbers by country, so we’ll focus on tourists from the Middle East and Asia, which includes three of the four countries with the world’s largest Muslim-majority populations (Indonesia, Pakistan and Bangladesh).

BEA reports that 1,225,500 tourists came to the United States from the Middle East in 2014. The BEA also tells us that 9,697,312 tourists came from Asia; and across Asia. Muslims account for 32.2 percent of the continent’s population. Once again, we’ll be conservative and assume that just 20 percent of Asian tourists who visited the United States came from Islamic countries, or 1,939,462 tourists from Asian majority-Muslim nations.

These two geographic groups add up to 3,165,962 tourists visiting the United States from Islamic countries, or 9.2 percent of all tourists who came here in 2014. This understates the actual number and percentage, because this accounting does not include tourists from large Islamic countries outside the Middle East and Asia, including Egypt and Nigeria in Africa, and Turkey in Europe. All three of these countries are among the world’s eight largest Islamic nations, and together their Islamic populations exceed those of Indonesia or Pakistan.

The BEA also tells us that tourists visiting the United States consumed $913.1 billion in goods and services here. Taking account of the impact of those purchases on U.S. employment and incomes, BEA concluded that tourists visiting the United States in 2014 were responsible for $1,576 billion of U.S. GDP.

Based on our understated estimate that tourism from majority-Muslim countries accounted for 9.2 percent of all tourists visiting the United States in 2014, and BEA’s accounting of the impact of their spending on U.S. GDP, Trump’s plan would cost the U.S. economy another $146 billion per-year from foregone tourism.

All told, if Trump’s plan had been in place and precluded both the immigration of more than 2.8 million adults from Islamic nations who are current U.S. citizens or residents and normal tourism from those majority-Muslim nations, it would have cost the American economy more than $334 billion in 2014 ($189,431,905,200 + $144,707,232,000 = $334,139,137,200).

Donald Trump would put every American’s money where his own mouth is. The United State currently has 133,957,180 households and a total population of 321,442,019 persons. Excluding households headed by immigrants from Islamic countries, America consists today of 131,830,547 households and 314.806,926 people. So, if Trump’s plan had been in place and stopped immigration and tourism from Islamic nations, it would cost Americans an average of $1,061 per-person and $2,535 for every non-Muslim household.



Rising Incomes Are a Key to Winning in 2016 — But Not Enough

June 2, 2016

 

Even if we accept that the 2016 campaign is a fact-free zone, what precisely are Donald Trump and Bernie Sanders talking about when they rant on about incomes cratering for most Americans? It’s true, as I’ve documented, that a majority of Americans saw their incomes stagnate or decline throughout the Bush expansion (2002–2007), and the financial crisis and ensuing recession aggravated those losses. But that dynamic ended more than three years ago.  Since 2013, the household incomes of most Americans have risen steadily and substantially.

The only candidate who seems to get this is Hillary Clinton, judging by her pledge to preserve and extend the economic gains achieved under President Obama. But Trump and Sanders’s appeal should tell us that, politically, those gains are not enough; and that a wining economic platform for this year’s election has to address the entire picture of the last 15 years. Yes, voters want measures to ensure that their recent progress will continue, a challenge Clinton has met better than her Democratic rival or Republican opponent. They also want a credible pledge that they will never have to endure another housing collapse or muddle through an expansion that leaves them on the sidelines.

Nevertheless, there’s no doubt that most Americans are doing much better than they did four or eight years ago.  Last month, the Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2015” found that nearly 70 percent of Americans say they’re “doing okay” or “living comfortably,” versus 18.5 percent who say they’re “worse off.”  Behind those positive views, the Bureau of Economic Analysis reports that Americans’ real personal income grew 1.9 percent from February to December 2013, followed by 3 percent gains in 2014 and another 4  percent gains in 2015.

To be sure, aggregate economic data does not always capture most people’s real experience. To track people’s actual experience, I sorted and collated the Census Bureau data on household incomes from 2009 to 2014. I focused on the incomes of American households headed by people who, in 2009, were 25-to-29 years old (millennials), 35-to-39 years old (Generation X), and 45-to-49 years old (late baby boomers). I tracked their incomes as they aged from 2009 to 2014, and analyzed the results by gender, race or ethnicity, and education.

The results show that most Americans saw their incomes continue to stagnate or decline from 2009 to 2012, with the exception of millennials.  For economic and statistical reasons, young households always make greater progress than older households, and millennial households were the only age group whose income rose from 2009 to 2012.  Moreover, household incomes have risen significantly since 2013 for Gen X and baby boomers, as well as millennials.

 

Average Annual Household Income Gains

  2009 – 2012 2013 – 2014
Millennials 3.2% 4.3%
Generation X – 0.4% 2.3%
Late Baby Boomers -1.1% 0.5%

The results also show that gender and race matter. While the income dynamics of the last decade didn’t create today’s partisan divisions based on gender and race, they probably have reinforced them. For example, while households headed by men generally fared better than those headed by women in the lean years from 2009 to 2012, women turned the tables in 2013 and have made more progress than their male counterparts since the turnaround.

Average Annual Household Income Gains by Gender

  2009 – 2012 2013 – 2014
Men Women Men Women
Millennials 3.5% 2.5% 2.7% 3.0%
Generation X –   0.2% – 0.6% 0.9% 2.8%
Late Boomers – 0.5% -1.1% 0.2% 0.2%

The results based on race and ethnicity also may help explain Hillary Clinton’s strength among minorities, as compared to Trump and Sander’s connections to angry white voters. In particular, the incomes of Hispanic and African-American households across all three age groups have grown faster than their white counterparts since 2013, under Obama’s policies.

Average Annual Household Income Gains by Race and Ethnicity

  2009 – 2012 2013 – 2014
White Black Hispanic White Black Hispanic
Millennials 3.7% 0.0% 1.8% 2.9% 3.0% 3.2
Gen X 0.1% 1.7% – 1.5% 1.6% 2.0% 5.0%
Late Boomers – 0.9% – 4.9% 1.8% – 0.1% 2.0% 2.8%

Finally, the results also show that after the tough times from 2009 to 2012, when Gen X and baby boomer households at every educational level lost ground, every age and educational group but high-school educated baby-boomers have made significant income progress since 2013. These gains even include households headed by high-school dropouts, lifted by very strong job growth since 2013 and the new cash subsidies under Obamacare.

Average Annual Household Income Gains by Education

  2009 – 2012 2013 – 2014
No Diploma HS College No Diploma HS College
Millennials -0.6% 1.1% 4.2% 4.4% 3.0% 5.1%
Gen X -2.2% -1.3% -0.1% 6.2% 4.0% 1.5%
Late Boomers -4.8% -1.7% -0.6% 9.5% 0.0% 0.4%

Incomes do not explain everything. The incomes of white millennials have risen rather strongly throughout this entire period. Yet, they’ve responded to Trump’s and Sanders’s cases that political and economic elites have denied them their hard-earned gains. Maybe they’re angry that their parents lost much of their home equity, or maybe they’re turned off rather than reassured by Clinton’s dispassionate demeanor.  To win them over, she will have offer a credible path to both maintain everyone’s recent income progress and preclude another housing collapse and joyless expansion.