Wednesday, August 30, 2017

A few facts and an observation about labor economics, immigration politics, and the aftermath of Hurricane Harvey

If readers will forgive an off-topic aside, here are a few facts and a quick observation regarding Texan labor economics, Hurricane Harvey, and the current political moment:

Fact: Hurricane Harvey is about to leave Houston facing one of the biggest reconstruction jobs in the history of the planet.

Fact: Between 28 percent and half of Texas construction workers are illegal immigrants. And Texas home prices are already rising because many of them are departing.

Fact: If President Trump's border wall is funded, either large numbers of illegal immigrants will assist in its construction, ironically, or there won't be enough workers to build it. And that's before any national infrastructure plan adds additional large jobs to the plate of the Texas construction industry.

Fact: The feds have promised ramped up immigration enforcement and the Texas Legislature passed SB 4 (aka, the "show me your papers law") mandating greater law enforcement cooperation with immigration authorities and authorizing more aggressive police tactics toward illegal immigrants. Their stated aim was to increase the number of deportations of people picked up by law enforcement, even for minor traffic violations.

All of which leads to this observation:

Despite high-profile roundups after President Trump took office - sending ICE agents into Texas courthouses to arrest domestic violence victims, for example - as a practical matter the threat of mass deportations, at least in Texas, probably ended after Hurricane Harvey. Somebody actually must perform the labor involved in rebuilding America's fourth largest city.

White Texans aren't going to learn the skills to participate in the booming building trades overnight, nor would most of us be willing to endure the labor conditions typically involved in that industry. Anyway, we're basically at full employment already in Texas and there are only so many workers.

Regardless, just as Bush II was judged on Hurricane Katrina, President Trump will be judged in a major way based on how well he handles Harvey's aftermath. This president cares deeply about others' opinions about him, and IMO he will soon come to understand that what happens in Houston going forward will define his historical legacy.

In the medium term, once someone explains the labor market issues to him, Grits suspects Hurricane Harvey may turn out to stymie the President's anti-immigration fervor for the foreseeable future. And maybe even scrap the border wall, too, at least in Texas. It will be impossible to rebuild Houston while simultaneously deporting the construction industry's labor pool, much less build a pointless 18-30 foot high wall across the desert.

In the end, you can't do all the contradictory stuff he says - eventually you have to pick - and Hurricane Harvey in all likelihood just made a lot of President Trump's choices for him.


gravyrug said...

That assumes that Trump is a reasonable human. He is not. He is a con man who believes his own hype, and genuinely believes he can make things happen just by repeating it often enough.

Gritsforbreakfast said...

I don't assume he's reasonable. I'm assuming the economy, particularly the labor market for construction workers, doesn't care if he's reasonable and will exert its own demands on the situation.

Anonymous said...

Jeez, the water hasn't even drained from Houston yet and you're already taking political shots at the president. Couldn't stand to be outdone by Joel Osteen and the Texas Rangers, eh?

Anonymous said...

full employment is a rather loose term these days. Pay and benefits will bring people into the industry.

Anonymous said...

If there were pay and benefits why were these jobs staffed by illegals to begin with?

Anonymous said...

There are so many people out of work with construction experience in other states that I challenge the premise of the entire tirade. Sure, those people aren't going to come down here to work their trades for minimum wage and no benefits but the belief all illegals work under those conditions is false, stop by one of the local spots they congregate in the morning and negotiate with them to see just how false. BTW, those out of work tradesmen were often the type that voted for Trump, they got sick and tired of waiting for the promises of the democrats to be fulfilled.

Steven Michael Seys said...

I wonder why, after at least four decades of debate and all sides admitting to the need for some immigration, these people who support the construction industry are only able to enter the country illegally. It would make more sense to set the immigration law to allow for legal immigration of necessary workers.

Anonymous said...

It is time to change the focus to punishing employers for employing illegal immigrants. The risk/reward (economic forces) of employing illegals benefit the employer. If business owners were to receive fines and be required to submit to IRS audit to determine the amount of back taxes, interest and penalties they owe for wages paid to illegals, the economic incentive for NOT hiring US citizens would go away. I believe that immigration law already allows for legal immigration of necessary workers though a sponsorship by an employer, but this takes time and money, so hiring illegals is cheaper, beside if something happens such as injury or deportation, the employer can just move on to the next illegal worker.

Wise Texan said...

The problem is the immigration system itself. It's ridiculously complicated and expensive. Let's fix it and make a path to citizenship for those who want it and a path to legally being here to work in the meantime. Then we won't have to waste billions on a stupid wall that isn't going to address the root cause of the problem. It's not a good argument to keep insisting illegals will do jobs that Americans will not do. Illegals are often doing work for next to nothing with no benefits because they can only get low paying jobs. That's comparable to slave labor. So to insinuate that employing illegal immigrants at next to nothing is just something we should accept is akin to saying slavery isn't that big of a deal.

And for those griping about taking political shots at Trump, in case you haven't noticed, this is a blog and an extremely well written one at that. The author can discuss anything he wants so if you don't like it, move on to the next piece.

Anonymous said...

The President cannot be accurately described as "anti-immigrant." He's married to a recent immigrant. He sounds like is is anti-illegal alien, as everyone should be.

That noted, the entire system should be trashed for something more humane, quick, cheap and effective for immigration and guest workers, and adequate border controls established.

Anonymous said...

Why not utilize some of the inmates inside TDCJ? Surely a few of them would be willing to work off some of their time without making a run for it.

As Lester Maddox once said "If you can't trust a trusty who can you trust"?

Gritsforbreakfast said...

Hey folks, first, this isn't a political shot, it'a an economic analysis. Whether the water is drained yet or not, Texans must understand what Harvey means for the state going forward. The facts listed aren't political, they are simply reality. My "observation" is admitted speculation, but based on the facts I think it's accurate.

@7:15 who said full employment is a loose term these days, even those most critical of UE numbers think Texas is at full employment, our job growth over the last decade has far outpaced the rest of the nation. That's why the illegal immigrant population is here in the first place: Immigration laws didn't keep up with labor demand.

To those that say pay more and people will work - maybe you're right. But the money the feds lay out will be based on past costs, not future ones. They're not going to give a 40% premium so employers can hire white people or retired Yankees.

Ditto on punishing employers. In the long run, maybe that would have the effect you want. In the short term, it will mightily inhibit the rebuilding of Houston. So pick which you want more: Fewer Mexicans or a rebuilt America's-Fourth-Largest-City. Because unless Congress passes comprehensive immigration reform, that's the choice we face.

@WiseTexan, this post isn't interested in "shoulds," I was more interested in simply describing reality, since that to me seems like the missing gap in these discussions. I agree Congress should pass immigration reform. But I don't think they will anytime soon. And Houston still must be rebuilt. Now. Do you fantasize that undocumented laborers won't be used? When you say we shouldn't "accept" undocumented labor, what does that that mean? Just leave the city messed up? Pay double historical rates for the repairs? What are you suggesting should happen? (Besides Congress all of a sudden becoming functional and passing good laws.) Because the Hurricane was a reality, and the response must also be grounded in reality.

@4:06, nobody but you said Trump is "anti-immigrant." All I said was his stated positions on immigration undermine the project of rebuilding Houston and both can't be implemented simultaneously IRL. It's true.

@2:16, I'm sure some prisoners will be used, but probably not as much in Houston - more in the surrounding counties where more prisons are located.

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