Trump's travel ban is having an unintended impact on a big U.S. export

Tuesday , April 18, 2017 - 5:00 AM

JEFF STEAGALL, special to the Standard-Examiner

Suppose there were an industry whose export activities created 380,000 jobs and brought $650 billion annually into the U.S. economy — an economic boon that benefited Utah with 2,200 jobs and $180 million. And suppose that industry grew at a rate of 8 percent for the past decade.

Finally, suppose the U.S. was recognized as a global leader in that activity.

Would that be a sector worth protecting? Would you expect the Trump administration to issue executive orders to help or hurt that industry?

Hint: It is not the manufacturing sector, which is the traditional focus of talk about American exports. Rather, it is a specific portion of the service sector — a sector that conservatively now accounts for 80 percent of the U.S. economy.

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Which industry is so valuable to the U.S. economy? Higher education.

Although people usually do not think about education as an export, when foreign students come to the U.S. to study, they pay for what we produce, just as a British citizen who buys an American-made car pays for what we produce.

In 2015, 580,000 international students studied in the U.S., 8,500 of them in Utah, according to a report by Open Doors, an organization supported by the Bureau of Educational and Cultural Affairs at the U.S. Department of State to provide comprehensive information on international students and scholars studying or teaching in the United States and U.S. students studying abroad.

In addition to paying for tuition and student housing, these students purchase groceries, attend the cinema and provide financial support for a host of local businesses.

Furthermore, they are more likely to do business in Utah once they return home, simply because they are familiar with the state, its citizens and resources.

Of course, some of those students will also follow in the footsteps of others who built America by immigrating legally. Many immigrants have studied in fields such as science, technology, engineering and math (the so-called STEM fields). These are occupations for which there are too few Americans studying to fill the vacant jobs, so immigrants ensure that firms can hire, grow and contribute to Utah’s economic well-being.

Unfortunately, the recent travel bans, issued through presidential executive orders, are already starting to hurt this strong export sector. Although no country on the travel ban list sends very many students to study in the U.S., students from other nations now view the U.S. as a very uncertain destination.

For example, they cannot afford to risk planning to attend an American college or university, only to learn just before the semester begins (or even after they land in the U.S.) that they are no longer welcome, as happened to many travelers when the initial travel ban was announced.

Instead, international students are looking elsewhere for their foreign study. A recent report stated that universities in Australia, a major competitor for international students, are experiencing a 30 percent increase in applications for the coming academic year. The increase is mainly due to the travel bans.

If fewer international students study in the U.S., our most innovative sectors will suffer a shortage of qualified employees. Our college classrooms will be emptier, making less efficient use of our resources. Were these knock-on effects identified and considered before the travel bans were announced?

Certainly this was an unintended consequence. But that is precisely the point.

The world is a complex organization. Decisions in one area will always have unintended consequences to others. Therefore, thorough consideration and open discussion with diverse constituencies are necessary to develop a thoughtful approach to problems both global and domestic.

Dr. Jeff Steagall is the dean of Weber State University’s John B. Goddard School of Business & Economics and a professor of economics. Twitter: @SteagallJeff.

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