The Economics of Immigration

The entire immigration debate in the United States is bordering on ridiculous. It is almost unbelievable that legislation has been passed to build a wall along a small portion of the border between Texas and Mexico. On top of this, the more strident Republican legislators feel that hundreds of millions of taxpayer dollars should be spent to expel all the illegal immigrants from the country. A witch hunt of a magnitude unparalleled since the Spanish Inquisition.

All of this defies logic for one and simple reason – economics. Here in Myrtle Beach, there is a large and vibrant population of immigrants. Where ever I go, it is just as common to hear Spanish spoken than English. But that is my point. The immigrants are out doing the things that consumers do. They are at Walmart and Best Buy. One observation. Unlike me, immigrants almost always seem to pay cash. Walmart and Best Buy must love that. One day I went to the dentist, and I was the only English speaking patient in the whole place. My humble dentist is raking it in.

So here’s the question. What if we boot all of the immigrants out of the country. What would happen? I’ll use one simple example. Immigrants don’t live on the street. They all rent houses, apartments, condominiums, etc. What would happen if suddenly there were millions less people available to rent apartments and houses? The price of real estate would plummet overnight. Pretty strange to want to boot out legitimate tenants from their houses, while housing prices are spiraling downward.

The reality is that the immigrant population has become an integral part of the American economy. Here’s a news flash! Immigrants rent houses, buy cars, go to the dentist, drink beer, and go out for a night on the town. They earn money and they spend money. The more people that our economy has making and spending money, the stronger the economy.

The American economy has been the #1 economy in the world. But that is going to end shortly. In the next 5 years, China will become the #1 economy in the world. There is one simple reason why they will overtake us – their population. China’s population is between 4-5 times the size of the US. Hello? If we are going to compete on the world stage, we don’t need less people. We need MORE people. Throwing the immigrants out would just widen the gap between us and China. Call me crazy but I still want America to be #1.

Overall, the American economy has done a splendid job of integrating the newcomers. Unemployment has never risen during this period of expansion. Yes, there are injustices where a taxpaying citizen loses priority in a government welfare office to a non tax paying immigrants. These are the friction points of the debate, but I view them as anomalies. Each and every American has benefited from the immigrants because our economy is stronger, and it helps us compete on the world stage with the Chinese.

But there is one big hole in this argument. To be honest, we have no idea on the number of immigrants in the country. In the news, we hear numbers that vary from 10 – 25 million people. But we really have no idea. How would anyone know? The reality is that no one knows how many people enter the country and leave the country. Worse yet. We have no clue. Not even close.

This election is going to come down Barak Obama and John McCain. McCain being from a border state has a fairly liberal attitude toward immigration, and so does Obama. Lost in everything is the real issue of border security. At the very least, we need to understand the numbers and the people coming in and out of the country. This will be the only way we can monitor and control our economic growth through immigration.

But I am on the opposite side of fence on this issue. We don’t need less people, we need more. We should be adding people into the economy as fast as possible as long as for each immigrant added, the economy expands. Here’s the beautiful part. If the economy stops expanding, we won’t have to turn off the spicket. The immigrants will just stop coming. The reason immigrants are in our country are purely economic. If the economic opportunity no longer exists, they will no longer come. So far so good, so bring them on!