The Pew Hispanic Center’s report that the historic wave of immigration from Mexico has reversed is a profound turning point, not least for the economy. One small/big element: Millions of illegal immigrants paid into Social Security with no hope of ever seeing benefits, but helping fund the system.
The American economy had grown an insatiable appetite for cheap immigrant labor, especially in construction, which became the nation’s last, big low-skilled factory. This destroyed most of the old, often unionized construction trades in the Sun Belt, with jobs held by citizens, and pushed wages very low. Hotels, restaurants, meat packing and, of course, landscaping, were another big draw. The tradeoff: Cheaper housing, food, etc. What was once confined to the southwest became a nationwide phenomenon in the 1990s and 2000s.
Hundreds died every year in the Arizona desert, the survivors paying their life savings to coyotes to be smuggled across to El Norte. Unscrupulous smugglers would hold the immigrants in drop houses for additional ransom from their families in Mexico, helpfully wired by Western Union. Some employers paid on this end, too, for coyotes to bring workers. Once here, they were exploited and often robbed, fearing the police and lacking any protections. Such were the human costs of our appetites. People railed against the illegals even as they enjoyed the benefits of their work.
The illegal immigrants lacked a pathway to become documented workers, much less citizens, much less acquire skills to become more productive and more of an asset to the nation. This largest wave of immigration was highly destabilizing. They and their children were costly to state schools and health care, especially in the border states, although their net economic benefit offset that. They paid sales taxes on top of Social Security. As with so much American, it was not sustainable.
The housing crash took away jobs. So did the increasing hostility in places such as Arizona, although its SB 1070 was more about voter suppression of Hispanic citizens and ginning up fear and votes among the Anglos who had moved from the Midwest. Meanwhile, Mexico has been growing a middle class. Many illegals sent much of their wages back home and could return in relative prosperity.
A friend who had covered the issue for years said, “Illegal immigration isn’t our most complicated issue. It’s worse.” But that was then. Legal America was living way beyond its means and now that’s over, at least for average people. Reality bit. Just remember: This was not the result of gunned-up vigilantes on the border screaming “What part of illegal don’t you understand?!” It was an economic collapse that still holds us back.
Context for understanding Social Security:
Before you write that Social Security is bankrupt || Nieman Watchdog
Addressing Social Security’s challenges the right way || Center on Budget and Policy Priorities
Today’s Econ Haiku:
Amazon pays up
What happens in Vegas stays
Taxes, not gambling