To the surprise of some, the Republican Congress largely supports Trump's restrictionist approach to immigration. Apparently Republicans are favoring their nativist base over their traditional allies in business. Why?
The Republican Party has long been the party of both business and nativists. For most of its history, the party's business wing has reined in the nativists. But aside from a few individual industries, businesses overall are less interested in open immigration -- freeing Republican members of Congress to cater to the nativists. It's not that nativism is increasing; it's that fewer businesses demand low-skilled immigrants.
As part of my research, I checked to see whether businesses are indeed lobbying less often on immigration. To find this out, I examined which groups testified before Congress on immigration, using that as one measure of lobbying.
Here's what I found. In the 1950s, on average, more than eight businesses used to testify before Congress at each hearing on immigration. By 2010, that number had dropped to two, as you can see in the figure below. The decline has been even steeper for industries that have been exposed to increased imports from foreign countries -- from eight businesses that produce goods that can be traded per hearing in the 1950s to less than one today.
Some industry groups have increased their lobbying for more immigration -- but those are in the tech sector and others that use high-skill labor. We should expect, then, that Trump will continue to push in his State of the Union address Tuesday for a "merit-based system" in which immigrants with high skills get priority.
In contrast, lobbying by nativist groups has hardly increased.
One of the most important things I learned as a math major that I've carried over to economics is the idea of a partial derivative. When y depends not just on x but also on z, what happens when z changes but x doesn't? That's what appears to be going on here, where x is nativist sentiment and z is business lobbying to allow low-skilled immigration.