The Economy and Immigration

Following up on Frank’s excellent post on outward manifestations of the financial crisis, here are a couple of less obvious ways that the meltdown might affect immigrants. First, the counterintuitive: immigrants may end up with more money in their pockets. Second, the ugly: we may see an increase in hate crimes against immigrants.

The obvious answer to the question of how the economy will impact immigration is that it will decrease border crossings –fewer jobs across the board and particularly less disposable income in the hands of those who pay immigrants to work in their homes will mean less demand for labor. Combined with harsh workplace raids and tightening borders, we’d expect the financial crisis to result in a decrease in immigration. While that was the trend at the beginning of the meltdown, the recent strength of the dollar may end up reversing this expected outcome. As AP reports today, remittances to Mexico in October increased by 13% over October 2007, as a strengthened dollar bought more weakened pesos. Dilip Ratha of the World Bank predicts that this phenomenon might actually lead to an increase in immigration to the U.S., especially as inflation and unemployment climb in Mexico.

Particularly with an increase in immigration, the ugly side of the economic crisis may be an increase in hate crimes against immigrants. The FBI reports that hate crimes against Latinos have increased dramatically — by 40 percent — from 2003 to 2007 (while the Latino population grew by only 16 percent). Call it the “Lou Dobbs” effect; as xenophobic vitriol and resulting anti-immigrant sentiment has increased, so has violence against immigrants or those who appear to be immigrants. Add that to an economy in free-fall, and the result may be highly combustible. As we saw in Long Island last month and Pennsylvania earlier this year, horrifying pastimes such as “beaner hopping” may proliferate as hate-mongering politicians and journalists scapegoat immigrants for job losses and other woes. Vigilant enforcement of hate crime statutes may alleviate some of the simmering tensions, but effective change will require more flattering portraits of immigrants in the popular media and public eye.

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12 Responses

  1. Brett Bellmore says:

    I don’t think it’s too much to ask that you not deliberately conflate legal and illegal immigration, by referring to both at “immigration”; I realize that doing so is pretty much SOP for opponents of enforcing immigration laws, but still, it IS intellectually dishonest.

  2. Patrick S. O'Donnell says:

    I don’t see the intellectual dishonesty: the distinction is not important for the point being made, indeed, one might say it’s irrelevant whether the human targets of xenophobic venom and vitriol, of insecure scapegoating and forms of violence, have entered the country illegally or not: in either case it’s wrong and it does not alter the fact that we should consider what measures, what actions–legal and otherwise–might be effective in countering the political pandering to hate and fear that serves to demonize or dehumanize “the other.” Only someone historically, sociologically, psychologically, politically and ethically illiterate or obtuse would imagine that it matters if the immigrants under consideration arrived here illegally or not. Talk about intellectual dishonesty and irresponsibility….

  3. Brett Bellmore says:

    It’s intellectually dishonest, because it’s the same as pretending that somebody who’s pissed off at a bank robber is mad at depositors making an ordinary withdrawal. People DO make distinctions between legal and illegal immigrants.

    And I happen to be MARRIED to “the other”, so get off your high horse. The problems with our immigration laws, and our immigration policies, (Which amount to making sure the laws don’t get enforced.) are many and complex, but we’ll never resolve them if we deliberately pretend a fundamental distinction doesn’t exist, in order to score phony rhetorical points.

  4. Patrick S. O'Donnell says:

    Please read what I wrote: I did not say that the distinction was always and everywhere inapplicable or unimportant, but rather that it has no relevance whatsoever in the instant case, to the point Professor Ramji-Nogales is making. That is to say, it does not matter to the person who is the object of hatred and violence, scapegoating, and so forth if he or she arrived here illegally or not, the distinction simply has no relevance or bearing to her post. Those intent on violence are not predicating their actions upon discovering whether or not the person is here illegally or not (and, in any case, the legal harm remains the same), and as the good professor takes pains to point out, they engage in wholesale racist generalizations and stereotypes…. Let’s hope your spouse is spared such vitriol and venom. Irrational or unreasonable fear and anger are not appropriate ethical or illegal justifications for violence.

    It seems the view from my high horse is clearly better. At any rate, my horse trots, cantors, and gallops, I wonder if the same could be said of your hobbyhorse.

  5. Patrick S. O'Donnell says:

    erratum: “legal justifications…”

  6. Danielle Citron says:

    Jaya, Thank you so much for that important post. Is this a reprise of the late 1970s and early 1980s with the rise of bias-motivated crime for cities hit tough by recession, such as Detroit? A colleague of mine, Frank Wu, is writing a book on the murder of Vincent Chin in 1982 on this sort of idea and your post has me thinking of his work. Again, thanks for covering this issue.

    Danielle Citron

  7. Brett Bellmore says:

    …the distinction simply has no relevance or bearing to her post.

    Yes and no; While the victim of an impending hate attack probably couldn’t stop it in it’s tracks by whipping out a green card, you’d better believe the level of hatred in this country has something to do with people watching the nation gradually, irreversibly change, as a result of the government deliberately refusing to enforce a popular law, year after year, through several changes of administration.

  8. Pete Murphy says:

    Rampant population growth threatens our economy and quality of life. Immigration, both legal and illegal, are fueling this growth.

    I’m not talking just about the obvious problems that we see in the news – growing dependence on foreign oil, carbon emissions, soaring commodity prices, environmental degradation, etc. I’m talking about the effect upon rising unemployment and poverty in America.

    I should introduce myself. I am the author of a book titled “Five Short Blasts: A New Economic Theory Exposes The Fatal Flaw in Globalization and Its Consequences for America.” To make a long story short, my theory is that, as population density rises beyond some optimum level, per capita consumption of products begins to decline out of the need to conserve space. People who live in crowded conditions simply don’t have enough space to use and store many products. This declining per capita consumption, in the face of rising productivity (per capita output, which always rises), inevitably yields rising unemployment and poverty.

    This theory has huge implications for U.S. policy toward population management, especially immigration policy. Our policies of encouraging high rates of immigration are rooted in the belief of economists that population growth is a good thing, fueling economic growth. Through most of human history, the interests of the common good and business (corporations) were both well-served by continuing population growth. For the common good, we needed more workers to man our factories, producing the goods needed for a high standard of living. This population growth translated into sales volume growth for corporations. Both were happy.

    But, once an optimum population density is breached, their interests diverge. It is in the best interest of the common good to stabilize the population, avoiding an erosion of our quality of life through high unemployment and poverty. However, it is still in the interest of corporations to fuel population growth because, even though per capita consumption goes into decline, total consumption still increases. We now find ourselves in the position of having corporations and economists influencing public policy in a direction that is not in the best interest of the common good.

    The U.N. ranks the U.S. with eight third world countries – India, Pakistan, Nigeria, Democratic Republic of Congo, Bangladesh, Uganda, Ethiopia and China – as accounting for fully half of the world’s population growth by 2050. It’s absolutely imperative that our population be stabilized, and that’s impossible without dramatically reining in immigration, both legal and illegal.

    If you’re interested in learning more about this important new economic theory, I invite you to visit my web site at where you can read the preface, join in my blog discussion and, of course, purchase the book if you like. (It’s also available at

    Please forgive the somewhat spammish nature of the previous paragraph. I just don’t know how else to inject this new perspective into the immigration debate without drawing attention to the book that explains the theory.

    Pete Murphy

    Author, “Five Short Blasts”

  9. A.J. Sutter says:

    I’m not sure I see how “immigrants may wind up with more money in their pockets,” except possibly in the weak sense of there being more immgrants, whom you consider to share a collective pocket. You mention that remittances are up compared to 2007/10, but is this remittances per immigrant? Nothing in the AP article you link to suggests that this is the case.

    The stronger dollar might buy more units of currency in the immigrant’s home country, but (i) that doesn’t mean that the dollars per immigrant is going up, and (ii) the pockets that benefit are those of the immigrants’ families, not the immigrants themselves. Moroever, many source countries for immigrants to America have become net importers of food and other staples, often thanks to IMF and World Bank policies. As the dollar gets stronger, the prices of many of those imported staples are going up in the home countries. As the AP article notes in the case of Mexico, “[A]lthough the weaker peso has made Mexican exports cheaper, it has also fueled price gains as imports of machinery, refined gasoline, car parts and other products grow more expensive. Annual inflation hit a seven-year high of 6.2 percent in the first two weeks of November – making increased remittances all the more useful in covering costs.”

    Perhaps the effect you mention is “counterintuitive” because it really is too good to be true. Or do you have other evidence?

  10. Jaya Ramji-Nogales says:

    Here’s how immigrants might end up with more money in their pockets: imagine immigrant A was sending X pesos to his family in Mexico each month. As the dollar strengthens and the peso weakens, A now needs to use fewer dollars to buy X pesos to send home. A now has more dollars in his pocket. A might also choose to send more money back home and keep the same number of dollars here in the US, which may be why remittances to Mexico have increased over the past year. My post doesn’t suggest that the number of dollars per immigrant would increase. It simply indicates two possible outcomes — immigrants might send more money home or they might keep more money in their pockets.

    Moreover, while inflation in the home country might eliminate the benefits of the exchange rate differential, it’s at least equally possible that immigration from Mexico could increase in the face of the economic crisis. My post doesn’t suggest that this counterintuitive outcome is certain but simply that it’s possible.

  11. A.J. Sutter says:

    OK, so your assumption is that

    (i) the immigrant sends home a fixed number of pesos;

    I had been contemplating that he or she sends home a fixed number of dollars. Fair enough. For the immigrant to have more money under your assumption also assumes that

    (ii) the US wages the immigrant earns will not go down, or at least won’t go down as quickly as the exchange rate, and

    (iii) the immigrant is indifferent to the fact that the family at home will be able to buy less with that fixed number of pesos (or pisos, won, etc.), as a result of the import effect mentioned in my previous post.

    I’m out of my depth in terms of knowing anything empirical about this situation. Can you point to empirical evidence that shows that items (i), (ii) and (iii), rather than being mere assumptions, actually describe what typically happens? Item (ii) seems an especially risky one to bet on remaining the case for the foreseeable future; what about the others?

  12. Patrick S. O'Donnell says:

    Although it probably doesn’t answer all your questions, presumably both of you (and perhaps others) would be interested in this paper by Ezra Rosser of the Poverty Law Prof Blog: “Immigration Remittances” available through this link