The Border Wall: 21 billion dollars for a project that will actually harm the U.S. econonomy and eliminate jobs

With the intent of trying to bring actual facts to bear on current debates in American politics, I started looking for information on the impact of illegal immigration on the American economy and, in particular, on blue collar jobs.

After all, the president is proposing to spend 2 billion this year on a wall to keep out illegal immigrants; and that’s just a down payment on the eventual 21 billion dollars it will ultimately cost.  To keep the budget “deficit neutral”, that money is being reallocated from other areas, resulting in cuts that will have a profound impact on programs that help working families, on environmental safety, on biomedical research and on America’s influence abroad.

So it seems reasonable to ask, what is the problem the border wall is intended to solve?  Does the fact that people can sneak into the United States overland without a visa pose a sufficient threat to justify spending that much of our hard-earned money to prevent it?

I came across this very interesting interactive budget model from the Wharton School at University of Pennsylvania (known for its MBA program, and hardly a hotbed of radicalism).  Interestingly, deporting 10% of illegal immigrants would have a slightly negative impact on the gross national product and would lead to a large decrease (yup, decrease) in overall employment.

Impact of deportations on U.S. employment

In an accompanying brief, the authors note that

…although immigrants increase the supply of labor, they also spend their wages on homes, food, TVs and other goods and services and expand domestic economic demand. This increased demand, in turn, generates more jobs to build those homes, make and sell food, and transport TVs.

Most empirical studies indicate long-term benefits for natives’ employment and wages from immigration, although some studies suggest that these gains come at the cost of short-term losses from lower wages and higher unemployment.

Standard economic theory implies that while higher labor supply from immigration may initially depress wages, over time firms increase investment to restore the amount of capital per worker, which then restores wages.

It seems to me that ginning up anti-immigrant sentiment among American workers to win an election is one level of bad; but spending 21 billion dollars of American money on a project that has absolutely no benefit to citizens and will probably harm the economy and reduce employment is a whole new order of magnitude of bad.

I believe the saying is: “if it ain’t broke, don’t <spend billions and billions of dollars to> fix it.”

Addendum: it was pointed out to me that the other rationale for the wall was presumed crimes by immigrants; but it appears that this is also a fallacy:

…several studies, over many years, have concluded that immigrants are less likely to commit crimes than people born in the United States. And experts say the available evidence does not support the idea that undocumented immigrants commit a disproportionate share of crime.

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