CSM: Immigration predicts 2008 recession
Wed May 02, 2007 at 08:19:35 AM PDT
Faye Bowers reports in today's Christian Science Monitor that fewer immigrants are attempting to cross into the United States from Mexico this year. Unfortunately, this does not mean that U.S. border enforcement has suddenly become more competent. It means that jobs for immigrants are drying up, an early warning sign of recession:
A slowing US economy, resulting in fewer jobs, is discouraging immigrants from slipping into the United States, according to economists at Arizona State University in Tempe. In fact, falling border apprehensions may be an early predictor of where the economy is headed.
If that's true, then Americans should prepare for rough economic times ahead, says Dawn McLaren, a research economist at Arizona State's business school.
Economist Dawn McLaren's research shows that attempted immigration is a reliable leading indicator of recession:
For the past decade, Ms. McLaren has been tracking the relationship between border apprehensions and economic growth. Every time apprehensions declined, the economy slowed about 12 months later, she found. "About a year before a recession, or a down cycle, there was a slowdown in the number of arrests" on the border.
The connection is straightforward: New illegal immigrants hold some of the economy's most marginal jobs, which are some of the first to be left unfilled when a slowdown looks imminent. When jobs are scarce, word quickly gets out to would-be immigrants.
"Because it is difficult and dangerous to cross the border, they're not going to come unless they have a job lined up," McLaren says. "If they get a call from someone saying it's a good time to come, they do. If the caller says wait for the times to get better, they do that."
The decline in jobs for immigrants can be largely attributed to the current recession in the housing industry. This is corroborated by a recent New York Times article which shows an anomaly between current statistics which show a large decline in the number of houses built, but only a small decline in the official statistics for home building employment. This anomaly is explained by the fact that the official housing employment statistics do not include illegal immigrants:
Technically they don’t fire them," said Myrna Martínez, coordinator for the Fresno office of the American Friends Service Committee, a nonprofit organization working on social assistance projects for immigrant workers. "They just tell them that there is no more work."
As building jobs have grown scarce, many of the workers who left farm labor a few years ago are returning to where they came from. They can be seen once again hunched in clusters under the unremitting sun, cutting heads of lettuce or slicing off spears of asparagus for minimum wage, clinging to the hope that home building will resume again.
As this quote shows, the collapse in homebuilding has a cascade effect on other industries that hire illegal immigrants, increasing the supply of workers who are already in the United States, and thus decreasing the demand for new migrants.
According to McLaren's research, the recession which the immigration slowdown is predicting will arrive around the first quarter of 2008, during the presidential primary season. While the electorate is presently focused on Iraq, this suggests that voters in early 2008 will be looking for a candidate who can articulate policies to create jobs and restart an economy damaged by seven years of labor-hostile government, irresponsible fiscal deficits, lopsided trading relationships, and speculative excess in housing.
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