Housing Drop and Illegal Immigrant Labor

[admin]

On a previous post there was discussion on how hard the housing drop will be and how serious an impact it will have on the economy. Chris J made some good points that so many jobs will be lost that it could have disastorous effects if prices dropped too far. But my skepticism is the nature of these jobs lost. More specifically, it is obvious that the most directly affected jobs will be in construction, and then there will be many industries indirectly affected due to less consumer spending. But I am curious how many of the jobs that will be lost are illegal immigrant labor, I suspect a significant portion.

I think there is a clear relation that the huge boom in construction over the last 5 years also cooncided with an enourmous increse in illegal immigrants workers to this country (I think the numbers have roughly doubled in that time period). The construction boom was so great that there was simply not enough of a labor pool to support all the work, so I think that is one major factor that has driven up the illegal immigrant numbers. This can probably be extrapolated out to the entire economy as well. As real estate and housing construction has exploded, it has raised consumer spending and thus increased the need for workers, hence more illegal workers.

So based on this assumption, I believe many of the jobs that will be lost in the upcoming housing crash will actually be illegal workers (and also legal immigrant labor for that matter), basically poeple that weren't even working in this country 5 or 6 years ago. So I have no idea what the percentages would be but for sure I think this needs to be taken into account. If in fact the majority of jobs lost are actually immigrants, I don't see that as a bad thing, as these are workers who at best are temporary guests in our country, and at worst are illegally in the country.

I am curious to hear your thoughts, because I don't have any hard numbers but it seems obvious to me that there is a clear relationship here.

 

 

 

[PD]

Illegal or not, they are still spending and contributing to the local economy.  If large numbers of people leave because of a reduction in jobs, it will have an impact.  They are lower wage earners, so you could argue that the impact would not too large.  However, all of the those people have to pay rent, buy groceries and shop at Walmart.

The loss of jobs in real estate will have an impact, too.  How large that will be is also debatable.

Another big unknown is whether consumer spending will dry up when people quit feeling house rich and start feeling house poor. 

[powayseller]

The group of people you describe is termed informal employment by economists. They are measured regularly in phone surveys by the Census Bureau. The informal employment is largest in California, employing 1.5 million people, or 10% of CA’s labor force! That is more than 4 states combined.

The informal sector includes self-employed people like realtors and mortgage officers, and illegal immigrants. They do not include illegal jobs such as drug dealing and prostitution.

It is accepted that the realtors and many contractors are included in this 1.5 million informals. This number will be reduced.

You’re probably right that the large influx of illegals from Mexico coincided with our spending boom in the past 5 years. They will return to

Impact on the economy? Not sure.

[Anonymous]

That 10% number is amazing, but I would speculate that the real number is actually much higher because I don’t think there is any accurate way to estimate the number of illegal workers. Many of them are disguised as legitimate workers with bogus SSN so not sure how that skews the statistics.

In terms of the impact, nobody knows but that is my curiosity. Clearly the majority of job growth since 2000 has been related to the housing boom. I contend that not only are most of these newly created jobs low wage jobs, but a large portion (majority?) of these new low wage jobs are filled by illegal immigrants. It would be fasinating to know what actual percentage of the new job growth since 2000 has been filled by illegals, but that is a statistic we will never know for certain.

[Author]

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