Small Businesses Brace for Losses as Trump Ends TPS for Immigrants

A series of paintings depict Europeans fleeing religious persecution in the 1600s, alongside modern-day immigrants from South and Central America. So begins a short documentary on The Immigrant’s Promise, partially sponsored by Stan Marek, the CEO of the national construction firm Marek Brothers based in Houston.

It’s an issue that hits close to home for Marek. The entrepreneur says he’s gravely concerned that 30 of his employees could be deported next year, as President Trump moves to end a protection status program for those who fled Nicaragua, Haiti, and, most recently, El Salvador. In the event that they lose legal status, Marek says, “I’d have no choice but to terminate them, and that’s ridiculous,” referring to the construction workers who are presently protected under the program. “It certainly would hurt the bottom line,” he adds, as he anticipates a labor shortage that would force the firm to turn down projects.

Marek is among the many entrepreneurs who are balking at the Trump administration’s approach to immigration policy, specifically the Temporary Protected Status program, or TPS. On Monday, the government said as many as 200,000 Salvadoran immigrants must leave the country by September 2019, or risk deportation, as it moves to end the decades-old policy. The news comes just weeks after more than 45,000 Haitians lost similar protections granted after a devastating 2010 earthquake, and as Hondurans face the same prospect. Nicaraguans, meanwhile, lost their protection in November.

Congress enacted TPS in 1990, with the original goal of helping those fleeing war and natural disasters at home. These immigrants have built homes, launched businesses, and raised children stateside, and work in various industries such as construction, landscaping, food, and retail, according to data from the nonprofit Center for Migration Studies. Generally speaking, those with protected status are concentrated in California, Texas, Florida, New York, Virginia, and Maryland.  

Because TPS has allowed some migrants to live and work for more than 20 years in the U.S., the policy change stands to hurt not just families but also niche segments of the economy. A new report from the Immigrant Legal Resource Center, a San Francisco law firm, estimates a loss of as much as $45.2 million in gross domestic product. Marek notes that Salvadorans, in particular, represent a large share of the already-thinning talent pool for construction, and the loss of such workers could decimate the industry. 

Shapiro & Duncan, a plumbing, heating, and cooling firm based in Rockville, Maryland, is similarly concerned over the fate of TPS programs. “I hope we can work through Congress to create pathways to permanent status and even citizenship, because these workers have become a part of the fiber that makes this country great,” says Mark Drury, vice president of business development at the roughly $115 million company.

Overall, he estimates that Shapiro & Duncan employs 14 protected immigrants–plumbers, fitters, welders, and technicians–the majority of whom are Salvadoran. Should those workers lose their legal status, he, like Marek, would be forced to fire them, which he expects would lead to a not-insignificant loss in sales. “If the labor force is reduced, our capacity to produce revenue is also reduced,” Drury explains.

Entrepreneurs often invest in cultivating special talent, and if and when they’re forced to let them go, that’s money down the drain. Marek points out that his business, which has invested millions in helping to train special project managers, cannot simply go out and replace them with American workers. As Drury puts it: “There is no bench of people waiting to come work in the construction industry.”

The Trump administration, however, sees it differently. Many conservatives have argued that the TPS programs allow businesses to abuse the system by relying on lower-wage, foreign labor–similar to arguments the government has made in favor of H-1B visa reforms. “In practice, the true beneficiaries of TPS were not temporary visitors, but rather people who had entered the United States illegally,” suggests the right-leaning Federation for American Immigration Reform, a nonprofit.

Drury, who has received a swath of hate mail in the days following an interview with The New York Times, bristles at the notion that he takes jobs away from legal citizens. “There’s an unfortunate misconception that people with TPS are illegal immigrants,” he says. “They’re not. They are the best of the best as far as immigrants, because they’ve had to stay crystal clean in order to renew their status.”

He further suggests that the arguments for ending the TPS program smatter of racism. “We didn’t send the Irish back after the potato famine,” he continues. “This country was built on a wave of immigrants, and this is no different. Unfortunately, the previous immigrants don’t like the new ones.” 

The argument for ending the program, to be sure, is that TPS was always intended to be temporary. The Department of Homeland Security says the conditions that initially triggered the protection for Salvadorans–namely, a pair of 2001 earthquakes–no longer exist. “The decision to terminate TPS for El Salvador was made after a review of the disaster-related conditions upon which the country’s original designation was based,” said DHS secretary Kirstjen Nielsen in a recent statement. “Thus, under the applicable statute, the current TPS designation must be terminated.”

Still, earthquake damage notwithstanding, there are other factors that could make returning dangerous and even lethal for immigrants. Gang violence continues to run rampant in El Salvador, where there was nearly one homicide per hour in the first three months of 2016. As Veronica Lagunas, a Salvadoran refugee, recently told The Times: “The infrastructure may be better now, but the country is in no condition to receive us.”

Canada Courts Entrepreneurs As Trump Trims Back Immigration

Brett Shellhammer, the co-founder and CTO of software startup Organimi, relocated to Waterloo, Ontario, after George W. Bush was re-elected in 2005. A former Silicon Valley techie, Shellhammer believes that running his business in Canada helped him save millions of dollars in healthcare and labor costs, leading to a level of success he wouldn’t have been able to achieve stateside.

Now, as President Trump threatens to trim back immigration — specifically, the H-1B visa program that has long benefitted the tech industry — many entrepreneurs are looking to follow in Shellhammer’s footsteps. They argue that Canada’s comparatively open immigration policies makes it a smarter place to do business in 2018.

“It’s becoming less and less sexy to be going to the United States,” said Tim Delisle, the founder of the artificial intelligence startup Datalogue, in a recent interview with the New York Times. Last year, the New York-based company hired engineers from countries including Morocco, France, and Belarus, but decided to have them work from a brand new office in Montreal, Quebec, rather than in New York.

Indeed, investment in the Canadian startup ecosystem has skyrocketed over the past 12 months, which analysts say is attributable–at least in part–to the Trump administration. Hubert Bolduc, president and CEO of economic development firm Montreal International, notes that $600 million worth of investments flowed into the Montreal area in 2017, compared with just $200 million in 2015. “Could I say it’s directly linked to Trump? Some explanation comes from that, for sure,” Bolduc says.

In particular, businesses are taking advantage of Canada’s recently introduced Global Skills program, a government initiative that allows tech workers to obtain work permits in just two weeks’ time, compared with the roughly six months it would take to obtain an H-1B visa stateside. The U.S.’s H-1B program is also capped at 85,000 visas, distributed through an annual lottery, whereas Canada’s program does not (currently) have a cap. In its first four months, the Global Talent program brought more than 2,000 job candidates to Canada, with the majority coming from India. 

“It’s really good for companies that are in a crunch, or working to quickly come to Canada,” notes Samantha Clark, a spokesperson for the Waterloo-based technology incubator Communitech, which has successfully on-boarded at least five international employees using the Global Skills visa.

Of course, it’s still early days for the program, and it’s not entirely clear if U.S. companies that are contemplating moving operations to Canada will actually do so. Although the U.S. Department of Homeland Security says it plans to propose various reforms to the H-1B visa program in 2018, no changes have been made thus far.  Many entrepreneurs are still in wait-and-see mode, as the H-1B lottery is set to open in April for the 2019 fiscal year.

Still others expect that even the most well-known technology companies are at least considering Canada as an option B. Indeed, Toronto has emerged as a dark horse candidate to host Amazon’s second headquarters, with its comparatively low cost of living and access to talent. “For a company like Amazon, the limiting factor is not capital, it’s talent,” explains Ravi Madhavan, a professor of business administration with the University of Pittsburgh. The overwhelming majority of “gold collar” workers–meaning specialized engineers, project managers, and supply chain operators–come from overseas, he says. Anecdotally, Madhavan has noticed that many of his students who are offered jobs with U.S. businesses end up taking jobs with Canadian companies, because it’s far easier to obtain a work visa there.

“Any company that is serious about talent has to be thinking about visa regimes and immigration,” he adds. “I’d be very surprised if Amazon doesn’t consider Canadian cities very carefully.” It would likely be joining a host of U.S. companies that are suddenly finding the Great White North appealing.