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As I write this, President Trump still hasn’t selected someone to chair his Council of Economic Advisers, much less filled all the CEA slots. That, even though Gary Cohn, head of Trump’s National Economic Council, recently said his boss has “every intention” of appointing a CEA chair. (Actually, it’s the law. The CEA was created by the Employment Act of 1946.) What’s more, the CEA chair apparently will not be cabinet-level in the Trump White House. Still, maybe now that Steven Mnuchin is on the job as Treasury secretary, a CEA pick will be forthcoming. Who knows?
But why does Trump even need a CEA? Some have suggested all the billionaire smarties in the Trump cabinet will supply all the economic wisdom Trump needs. I disagree, and outlined my counter argument recently in The Week. For more evidence, check out the recent IGM Forum survey question asked of top economists: “If the US significantly lowers the number of H-1B visas now, employment for American workers will rise materially over the next four years.”
This is exactly the kind of relevant policy question a CEA, as an in-house think tank, could explore for an administration. Now, as you can see in the above graphic, economists overwhelmingly disagree with the question’s stance. Among their reasons:
- “H1Bs may slightly depress wages for high-skill workers. But they don’t lower total jobs and they likely raise total profits and wages.” – David Autor
- “Immigrants have founded so many start-up companies, including Google, Tesla, …” – Markus Brunnermeier
- “Direct effect, may hire some U.S. employees. But will push other operations overseas, reducing U.S. activity. Net effect is uncertain.” – Steven Kaplan
- “Eventually perhaps some americans get hired, but seems more likely that there are shortages and activity moves in the short run.” – Anil Kashyap
For more on this, check out my recent post, “The costs and benefits of high-skill immigration.”