It’s the Jobs, Stupid – Border Encounters Edition
I wanted to share something with you. I was talking with TPM Reader LG (who in this case I will identify as Leo Gugerty, a Professor at Clemson University) about the DOJ-in-Exile project and the conversation moved to something very different: the pace of border crossings at the southern US border over the last 15 years. With his permission I’m sharing with you here the graph he shared with me.
The rates of undocumented immigration are obviously highly politicized in this country. On the right there are a stunning level of conspiracy theories about it. You can routinely hear very ‘mainstream’ Republicans talk about how Biden ‘brought in’ 20 million immigrants for various evil reasons – both absurd as to causes and like an order of magnitude more immigrants than actually came into the country. I have always assumed the high rates are a mix of growing human mobility and a mix of political and economic instability that are significantly driven by climate change. (There’s actually some good scholarship pointing to climate driven economic dislocations playing a non-trivial role in the origins of the Syrian Civil War, which spurred radicalization and sectarian far-right parties in Europe.)
But as you can see this chart suggests a pretty strong correlation between employment demand/shortages and immigration. For these purposes, I don’t think we even need to get that focused on legal vs illegal. That’s more a second order factor we impose on a fairly straightforward supply and demand dynamic. When Gugerty showed me this I looked at it and felt stupid that something so obvious hadn’t even really occurred to me.
Now, let me say that I don’t imagine that people who study these things haven’t thought of this. And I certainly have too – but in a general sense. I had not focused on the fact that these recent surges line up pretty well with periods of particularly acute labor demand/shortages in the US. It really makes perfect sense.
There’s an additional point that occurs to me. There used to be a pretty widespread school of thought, generally but not only among more right-leaning economists, that unemployments below 5% introduced inflationary pressures into the economy. This was a big debate in the 90s and was one of the drivers of Greenspan Era Fed policy, etc. People don’t tend to believe that these days, or don’t think it’s so fixed, in large part because we’ve spent a lot of time under 5%. These immigration surges have to provide at least some substantial cushion on whatever dynamic is really in play there. Those debates aren’t really my area. I don’t want to go into too much level of detail and get into trouble for fumbling the details. But these surges clearly play an important role in shaping whatever dynamic exists between relative labor shortages/’frictional’ unemployment and inflation.
I don’t imagine that one graph settles this analytic or political question. I don’t think Gugerty does either. As he explained to me, this isn’t his specific field, though he works with statistical information. It was something he put together when he was trying to make sense of why these surges were happening. (I should add here that I have not independently verified the data. But given Gugerty’s background and the way I’m sharing this I don’t think that’s necessary.)
No big phenomenon has a single cause and we could quibble with the precise statistics he uses as proxies for the rate of in-migration and labor demand. But the correlation is strong enough that I think it has to be a major part of any explanation and it certainly is now in my mind.
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