A Series of Days With A Lot of Mexicans [and others]

The title is of course a reference to the smug, self-congratulatory and overbearing [would "puerile" be piling on?] movie, "A Day Without A Mexican." The premise of the movie is one day, dawn arises in California, and there are no Latinos.

Given that immigration is such a hot issue going into this election, let's discuss the topic a little. This likely won't be my last post on this issue.

The first question I would pose is this: What if all the illegal immigrants, of all nationality and stripe, were legal. That is, let's assume that there are no illegal immigrants, that all immigrants all here legally. Would there be an issue that we have too many poor people? Too many laborers? Too much cheap labor? A health care crisis regarding the vast number of poor we have in many metro areas?

I ask the above question because it is productive to tease out the myriad complicated sub-issues that cloud the discussion. I mean, is it that we are just a racist society? [I believe that we are fundamentally not a racist society.] Is it that we feel threatened by the changes to the status quo? A gradual [or in the case of Orange County in the 1970s, not so gradual] increase in the number of new, foreign residents can trigger something of a backlash [even if it does coincide with a dramatic rise in the value of your home.]

So we have an influx of new and perhaps undocumented people coming to America. So what? The free marketer in me asks "What are the impacts?" Well, first, the housing stock, particularly, the rental housing stock will increase in price. Secondly, wages will decrease. Thirdly, the goods and services produced by the cheap labor will decrease in price. And lastly, the entrepreneurs utilizing the labor will have more profit, and will thus expand their businesses [thus creating more of a demand for cheap labor.] To the extent that that labor supply is unlimited or seemingly unlimited, the cost of these goods and services will be artificially depressed. And so will wages. While the cost of rent and housing continues to increase. Sound familiar? Welcome to Southern California.

In short, the immigrants who are already here do a grave disservice to themselves by encouraging others to join them. The market never normalizes, never acclimates to the supply of cheap labor such that the other factors come into balance. One would expect that the most ardent anti-immigrants should be recent immigrants.

What else? In California, everybody likes to discuss the infrastructure. Hospitals, schools, police, jails, roads, administrators [both petit and grand] all get stretched to the limit. But how to measure the impact. Infrastructure is much like taffy. You have some, but it stretches and stretches when more is needed. Up to a point.

So let's think about this. How can we measure the net impact on infrastructure. Two ways. First, is there really a net impact on the infrastructure by the addition of millions of new personages? Well, my first argument against this proposition is that the net replacement population in American is 2.09. That is, for every woman in the United States [during her life], 2.09 children are born. So essentially, we repopulate.

Given that metric, we are in no serious danger of a population boom due to reproductivity rates. That being said, the United States has been growing by about 1% [a still sizable number, about 3 million per year] since 2000. Still nothing of a shock, especially given the United States' historic growth rates. [America doubled in size between 1870 and 1900. Even during the decade containing the Great Depression, America grew by almost 7%.]

But maybe the above numbers omit all illegals. One credible source estimates that 2 million illegal immigrants came to the United States between 2000 and 2006. That means 333 thousand come over each year, or about one-tenth of one percent of the current population of the United States.

So, just looking at the sheer numbers, it appears that the notion of infrastructure should not in and of itself be unmanageable. But we omit two truisms: all infrastructure is expensive. No one wants to pay for it.

So assuming that there is a marginal impact on infrastructure, do the new immigrants pay their share for the increased cost? First note: They aren't getting concierge service, folks. Get over that notion. Second note: they might be. It's possible. They're just not paying for it directly [for the most part. To the extent that they have forged identities and are paying into the pool, then they are in no worse position than your average garden-variety Wal-Mart worker.]

Before you light you club-shaped torch and come hunting for me, let me make the following observations: Cheap labor and increased home and rent prices have certain advantages you may not want to give up. The small incremental increased amount you pay for more cops, roads, border patrol, hospitals, jails and administrators is very likely more than offset by the amount of money you are not paying in the increased cost of produce, home construction costs, restaurant expenses and so forth. In order to do a nuanced study, you'd have to look at the net impact of population increases on wages and taxes, absent all other influences [such as the impact of Proposition 13]. That's more econ modeling skill than I have, and I would presume, than most of you have either.

So, close those borders at your own peril. The immediate inflationary impact on the costs of goods and services would be real and dramatic. The vast pool of unrented housing stock would stagger the Southern California market, sending ripples throughout the already teetering housing market. Take 12 million people out of an economy and see what happens.

Those are my views. People expecting a discussion of so-called "social justice" or "terror threats" related to immigration issues, I am sorry to disappoint you: I will not bite.

I'm back

Maybe.