How populism's worst ideas about trade and immigration threaten U.S. economic growth

By Peter Morici

Americans showing more skepticism towards affirmative action and open immigration

In the U.S., non-white voters are shifting away from the Democratic Party, and their realignment around blue-collar, populist values may have critical negative consequences for U.S. economic policy.

Political analyst Nate Silver last February examined an aggregation of Associated Press 2020 election exit polls and a compilation of national polls. Among Blacks and Hispanics, who are decidedly more blue-collar, President Joe Biden's lead over former President Donald Trump had shrunk by about 28 points compared to 2020, while Hispanic voters' support thinned by almost 19 points.

Furthermore, examining Americans' voting patterns from the 2012, 2016 and 2022 presidential and 2020 congressional elections shows an erosion in support for Democrats among minorities, including Asians.

Progressives sometimes argue that Democrats are not delivering effectively enough on their agenda - affirmative action, childcare, pre-K education and the like. But their broader vision often does not resonate with enough minority voters.

Pushing back

Only about 30% of Blacks and Hispanics identify as liberal in their outlook. Meaning that 70% of those groups identify as either conservative or moderate. Many of them may find populist economic and social ideas attractive -protectionism, skepticism towards affirmative action, society's elites, and open immigration.

Hispanic and Asian immigrant families have experienced considerable inter-generational upward mobility. According to the Pew Trust, while more Blacks and Hispanics than whites say race and ethnicity should be considered in hiring and promotions, a majority of all races agree that a job candidate's individual, professional qualification is the most important factor - even if this results in less diversity.

So it seems that affirmative Action and diversity, equity and inclusion (DEI) enforcement in the workplace, at least as it applies to race and ethnicity, will remain under assault. These efforts don't enjoy the support among many of those who are supposed to benefit.

Nevertheless, the Biden administration's infrastructure, industrial, immigration and other economic policies are keenly attentive to the hard-left's social justice agenda.

How the U.S retreats from globalization will affect its living standards.

At the same time, dissatisfaction with those policies is high. A recent Fox News poll showed that despite robust growth, low unemployment and lower inflation in the U.S., 55% of non-white registered voters disapprove of Biden's handling of the economy. Among non-college whites, that figure rises to 74% for men and 71% for women.

Meanwhile, 59% of non-whites polled disapproved of the president's handling of immigration. An April New York Times poll indicates generally similar sentiments. Pulling all this together, it is important to remember that more than half of U.S. voters don't have college degrees.

Immigration adds to the skills and overall strength of the American workforce and by boosting growth, it creates opportunities even for those who see immigrants as competition. Shutting the door too tight would become another wall to progress, just like Trump's proposed 60% tariff on Chinese imports.

Yet, whether Biden or Trump is elected president this November, one way or another U.S. immigration policy likely will be tightened. But how the U.S retreats from globalization will affect its living standards.

Indiscriminate industrial policies - excessive subsidies for the auto and other industries - and undiscerningly high tariffs would breed inefficient production and technologically lagging products in America as compared to those made and available in Asia.

Progressives have been operating on the notion that non-whites - no matter their origin or experiences in America - can be organized under the awning of identity politics. That may be driving them to the Republicans - but also some of the worst populist impulses.

Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.

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Also read: Cutting interest rates is misguided - the easy money would only fuel inflation

-Peter Morici

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04-27-24 1248ET

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