How Much Immigration Costs

It is all happening here in Colorado, as Governor Owens has called a special session to recraft a bill to pass the state supreme court. Brendan Minter of the Wall Street Journal examines the politics and economics of the debate. His short column is far more informative than the daily stories on local TV news (recent storms have forced me to watch). He discusses the GOP's hopes of retaking the state legislature and speculates that Owens might use the issue to re-ingratiate himself with the party faithful after he stood with the tax raisers in 2004.

What caught my eye and that of an emailer was this attempt to calculate the costs and benefits of illegal immigrants to the state:

The one good thing to come out of the political wrangling in Colorado is that voters have been treated to a state-wide debate over how much illegal aliens actually cost in government services. Estimates range from as high as $1 billion a year to as low as $31 million. The Denver-based Bell Policy Center issued the latter estimate after finding that illegal aliens receive about $225 million a year in non-mandated state services, but pay between $159 million and $194 million in property, sales and other taxes. The issue is too hot for anyone to point out that illegal immigrants working as day laborers cost the state what the working poor as a whole cost the state--a bit more than they pay in.

I have read a bucket of these studies now, and I flatly reject that an accurate accounting is possible.

Bastiat talks about the seen and the unseen. The scourge of my life is that my positions always seem to rely on the unseen. You can't possibly compare an economy without illegal immigrants to the one we have and compute any realistic numbers . There are too many variables. Here's my seen and unseen:

Seen. Immigrants cost money in public schools and emergency services.

Unseen. Immigrants fueled the housing boom (call it a bubble if you want, it has created trillions of dollars of wealth). Immigrants rent lower cost housing, providing income to those who with to move up. Immigrant labor reduces the cost of larger homes, facilitating the opportunity to purchase something larger. The trade generates income for financial services and brokers. Most importantly, the higher values allow people to refinance and use the income to start business or purchase consumer goods.

You cannot tell me that anybody has successfully and accurately tabulated how much wealth that has added to our economy. So I tell people, but I am swimming upstream.

My emailer suggests I am doomed because of cultural arguments as much as economic. Crime committed by a Spanish speaker plays into a narrative and reinforces a concern. The same crime committed by "Dirt Bag Dick and his motorcycle meth buddies on their way to a Klan meeting isn't going to have the same impact in Iowa or Minnesota or Green Bay as someone from somewhere else bringing that behavior in. It's not fair, but that is what you are really fighting when it comes to illegal immigration." (I get pretty good email. He had me until he tried to sell discount Cialis...)

My optimism is predicated on the inefficacy of legislators -- they will have to compromise, and a compromise will be mostly good. More enforcement IS better; higher legal immigration IS better; a legal path to citizenship would be better.

I liked Brendan Minter's piece because of the caution to GOP candidates’ hopes of riding this train to stardom.

Immigration Posted by jk at July 11, 2006 1:00 PM