Sunday, March 04, 2007
The Housing Bubble Caused Illegal Immigration
Immigrants, particularly illegal Mexican immigrants, have found good jobs in industries associated with the housing bubble. Large numbers of immigrants work at jobs in the construction, landscaping, and road construction industries. Employment in the construction industry alone is currently nearly two million jobs above trend (7.7 vs. 5.9 million). Of course many of the illegal immigrants are not even counted in such statistics, but just take a look at residential, landscaping, and road construction sites and you are likely to find many non-English speaking immigrants.
Therefore immigrants have a powerful economic incentive to move to America – lavish government benefits plus good-paying jobs that are the result of the housing bubble. The boom phase of the business cycle and bubbles naturally misallocate labor from one industry to another, and in the case of the housing bubble it has been to allocate labor to the construction, mortgage and real estate industries with immigrants helping to fill the gaps in the construction industry.
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