Saturday, October 1, 2011

The Great Wall of the United States?

copyright Charleston Tea Party 2010
     To start with, let’s take a look at some of the numbers concerning the cost of the US/Mexico border fence.  Over 2 years, 2007 and 2008, 288 miles of border fencing were completed at a cost of roughly 3 million dollars per mile, that’s $550 a foot.  To put this price tag into perspective, that is the equivalent of paying $550,000 for a 1000 square foot home.  (And even then, the fence is measured in foot length, not square feet so this is a conservative comparison.)  The southern border is nearly 2000 miles long.  At $3 million per mile we would have a cost of $6 billion for construction alone.  This price is estimated to climb significantly higher because the cost of land acquisition from private landowners varies significantly and the terrain on which the fence must be constructed also varies significantly.  For example, the final ten miles of fencing that was approved for construction for the San Diego fence was done so at a total price tag of $35 million; that’s $10 million per mile.  This does not include maintenance costs nor does it include the costs of the manpower required to police the fence.  Every time the fence is breached, the US Army Corp of Engineers has estimated that it would cost about $1,500 to fix.   The fence has been breached nearly 5,000 times since we began construction in 2005.  First of all, that’s an average of more than 2 breaches a day (a breach is when the fence is damaged in a crossing attempt.  It does not include the number of times people successfully cross the fence without damaging it.) With this being said, the maintenance cost for breeches alone has added another $7.5 million to the cost of the fence and the fence is not even halfway done.   
     To see a video that demonstrates the ease in which the fence can be passed, watch this video and then decide for yourself if the idea of a fence is going to serve its intended purpose.  The two women in the video both reached the top of the fence in less than 20 seconds and a rope would significantly reduce this time.  Also, you will notice from this video, my cost estimates are quite conservative.  Many estimates are significantly higher; some of them reaching the $60 billion mark for construction alone.  That’s $5,681 per foot or according to the same calculation above, $5.68 million for that 1000 square foot house. 
     To make the idea of a fence even worse, there has been recent talk of a US/Canada border fence
This is getting out of control.  Aside from the monetary costs involved with these projects, there are other questions that come from these prospects of fencing ourselves in.  Is the current US society this overwhelmed by a fear-based mentality that something as ineffective as a border fence would be viewed as a rational solution to the problem of border security?  At the height of a national economic crisis in which fiscal liberalism is under extreme scrutiny by the Republican party, does it seem like an inconsistency in preference ordering for many of their affiliates to be in favor of an expensive yet ineffective initiative to combat illegal immigration?
     This is just the tip of the iceberg when thinking about the efficacy of a fence along the border.  Volumes could be written on all of the intricacies that surround this debate, unfortunately this is a blog post, not a novel. 

Tuesday, September 27, 2011

Some Brief Economics Concerning Mexican Immigration

     Giovanni Peri, in an economic report compiled for the Migration Policy Institute, found that “Immigration unambiguously improves employment, productivity, and income, but this involves adjustments.  These adjustments are more difficult during downturns…”[1]  So, we are currently in one of these economic downturns but immigration (legal and illegal) still show positive gains for the US economy.  In the short run, we will see slightly negative impacts on portions of the domestic economy.  For the first two years of an immigrant’s stay in the US, (legal or illegal), the effects on native employment are slightly negative; some native citizens will lose their jobs.  The four and seven year results show positive effects however; new jobs are created and more native citizens have jobs than before the immigration occurred.  
     In addition to the positive long-run implications of migration, it is also important to point out that people should be allowed to “vote with their feet” in order to promote social, economic and political change in their home countries.  Voting with our feet is an important aspect of the Political Economy of the US and is a key element of all capitalist democracies.  It has been shown to improve efficiency in autocratic societies as well. This is because migration solves market inefficiencies by allowing labor markets to move towards equilibrium.  
     The first thing to understand when analyzing the effects of migration is to understand the cycle of migration flows.  Migration is dependent on labor markets; labor will flow to where there is the most demand for labor.  In this case labor flows from Mexico to the US.  The demand for labor is higher in the US when the economy is prospering and likewise the demand for labor goes down when the economy is retracting.  This is important to understand because it shows another discontinuity in the logic of the anti-immigration argument.  If migration is lower during the economic downturns than it is during the times of prosperity, why does the anti-immigration sentiment grow when we are in an economic downturn?  The market self-regulates this imbalance without the need of government intervention.  Government intervention in the market where there is no market failure is discontinuous with the logic of market capitalism, and it is ironic that the argument is being made when migration is at its low points.  Aside from the problems of logic that this data poses for anti-immigration arguments, the economic data from 1994 through 2009 suggests that rises in the net immigration rate has a statistically significant correlation with a rise in the domestic employment rate. What is most interesting about this data is that when illegal immigration is controlled for (as a variable in the multiple-regression analysis performed by Peri) there is no correlation at all between the effects of immigration on the employment rate.  This suggests that illegal immigration may be the cause of the economic benefits that net immigration brings to the domestic employment rate. 
     Now that we have looked at the supply-side concerns of migrant labor, we should look at the demand-side concerns as well.  Capital demands labor for the production of agricultural, industrial and service goods.  The means of production are diversified among these different sectors of the market and therefore the demand is not determined by any unified voice amongst Capital, but is rather determined by the market itself.  This is because, as Samers points out, the market for migrant labor depends “upon product markets, the productivity and intensity of labour power, the organization of production and the ability to substitute native workers, the cost and levels of technical innovation, wage rates, [and] social welfare costs.”[2]  The context of Samers argument was the arrangement and effects of migration on the individual state economies of the EU, but the economic principle still applies.  The massive capital accumulation in the US provides a fertile market for labor.  The macroeconomic policies of the US and Mexico have only served to fuel the migration of Mexican workers to the US in search of jobs.  NAFTA and IMF reforms imposed on Mexico as part of a process of opening the Mexican economy has had a wide array of unintended consequences.  While NAFTA and economic reforms have shown improvements in the Mexican and US economies since their inception, they have at the same time relaxed the controls over the US/Mexican border, increased the volume of traffic that crosses the border, and narcoticized large portions of the Mexican agricultural economy.[3]  The Mexican State, pre-NAFTA, supported its agricultural sector with subsidies that allowed them to compete with a much more technologically advanced US agricultural sector.  Under the new free trade agreement and the economic restructuring of the IMF, these subsidies were retracted.  This had two primary results; (1) native-Mexican agriculture laborers moved to find new opportunities for work to the US, and (2) large agricultural lands were converted to the farming of Marijuana.[3]  Markets respond to incentives and these programs, although unintentionally, incentivized these two responses.  Not only has NAFTA contributed to the narcoticization of the Mexican agricultural sector, but it has increased the cross-border traffic between the US and Mexico which has facilitated the ease of transporting all types of contraband; drugs, guns and even people across the border. 
    The point is, that immigration is good for the US economy; period.  The arguments that make wild claims about the "evils of illegals" are a product of our own ineffective foreign policy decisions, and the arguments about the negative implications for our economy are simply unfounded.  The most recent Republican debate had a lot of conversation about what to do about "all this illegal immigration" and who was being soft and who would be tough on it.  Undoubtedly, everyone wanted to be seen as tough on it.  There was even mention of building that ever elusive fence along the border...Can we really afford that right now? Ah, but that is a topic for a later date.....

1: Giovanni Peri. Immigration Policy Center. (2010 йил 8-January). Immigration Policy Center: American Immigration Council. Retrieved 2010 November from
2: Michael Samers.  ‘Globalization’, the Geopolitical Economy of Migration and the ’Spatial Vent’.  1999.  P.172.
3: Peter Andreas.  The Illicit Global Economy & State Power.  P. 125-141.