... it's likely to be a long, hot summer out west this year ...
(snip)"One explanation as to why this hasn’t turned up in the data relates to the illegal immigrants who have been working in construction. Obviously the impact on the economy and on measures like dropping sales tax collections are the same whether it’s an illegal or an American citizen losing a job. In fact a portion of the strength in consumption and retailing is tied to this hidden sector of the Brazil American economy.
They were mostly pulled in by the building frenzy of the first half of the decade. According to the analysis by the Pew Hispanic Center, based on census data, Hispanic immigrants took 60 percent of the million new construction jobs created from 2004 to 2006. Those recently arrived took nearly half.
This is now showing up in remittances back to Mexico and Central America:
After spectacular growth in recent years, Mexico’s remittance inflows have begun to stagnate. Indeed, the pace of growth in worker remittances has begun to turn down just as the Mexican economy has started to slow. That represents an important break from the past ten years, when the pace of growth in worker remittances would normally accelerate when the Mexican economy slowed. A continued downturn in the pace of growth of worker remittances could begin to harm the Mexican economy: after all, remittances from Mexicans working abroad reached nearly 3% of GDP last year.
The slowdown in remittance growth is not limited to Mexico. The three largest recipients of remittances in Central America show a similar trend to that of Mexico. For example, in Guatemala remittances grew 11% in February, roughly half the pace experienced in 2006 (21%). In El Salvador — where remittances last year represented nearly 18% of GDP — the slowdown has been more pronounced: up just 6% in February 2007, compared to 17% during all of 2006. In the Dominican Republic, December inflows rose 7%, the slowest pace since July 2005 and well below the 13% average for all of 2006.
Notice in the big plunge in remittances from 1.758 billion to 1.695 billion just between December and February. Normally we would see a seasonal pick up going forward as building picks up in the spring, but this year? The winter season downturn this year is especially steep. This chart is through January, so line up 1.695 billion with your eye.
Housing decline hits Hispanic “immigrants”, thus explaining sales tax swoon in places like California? "(snip)
Some corroboration from a different source ...
(snip)"As building jobs have grown scarce, many of the workers who left farm labor a few years ago are returning to where they came from. They can be seen once again hunched in clusters under the unremitting sun, cutting heads of lettuce or slicing off spears of asparagus for minimum wage, clinging to the hope that home building will resume again.
“If another construction job comes up, I’ll go there,” said Cresencio B., a former Mexico City policeman who arrived illegally in the United States in 1991.
Cresencio B. toiled on farms up and down the West Coast until he got a job cutting wood segments on a construction crew two years ago, making about $11 an hour. But building jobs dried up in October. In early April, he was in a tomato field nearby, brandishing his hoe for $7.50 an hour, clearing out the weeds and the leftover garlic sprouts from last year’s crop. "(snip)
"The immigrants agree. “There are too many people for too little field work,” José Manuel J. complained. “People are scattering up to Oregon and further north because there is little work here.”"(snip)
what's going to be 'different' this time is ...
#1 many growers who had formerly relied heavily on low cost / illegal immigrant farm labor, and who found their businesses left 'high and dry' at harvest time in recent years because low skill legal and illegal immigrant labor found higher paying work in the construction industry instead, and who now face the prospect of having to pay $7.50 an hour state minimum wage to 'legal' farm workers, have now invested heavily in farm automation equipment - which cuts their need for human labor in the fields, and in turn cuts the available agricultural jobs that both legal minimum wage workers and illegal aliens will be able to fall back on.
#2 US authorities are in a cycle of investigating, making, and publicizing high profile busts of large employers of illegal immigrants - with REAL legal and monetary penalties now applying to convicted employers for the first time - which will undoubtedly make large growers gunshy. For western growers, this problem is compounded by current political tensions in Washington, where potential high profile busts in the election district of our current Speaker of the House would be of enormous political value, making California growers in particular even more gunshy.
#3 Illegal immigrants who formerly confined their activities to California are now being forced to migrate to Oregon and other nearby states in search of work. It remains to be seen how Oregon and other nearby states are going to deal with a large influx of illegal aliens in terms of police, hospitals, social services, school systems etc. - as well as the choice to be made by Oregon and other nearby states whether or not to enforce federal immigration law.
It is speculated that between the loss of relatively good paying construction jobs, and greatly reduced options in regard to other work that had classically been available to illegal immigrants, plus a decline in the Mexican economy closing off the option of returning 'home', by this summer there are going to be a whole bunch of illegal immigrants in the western US who have little / no money, little / no opportunity, and a whole lot of potential for starting trouble. From a financial standpoint, this is certain to result in increased public spending on several levels from law enforcement to social welfare benefits, probably resulting in tax increases for those who Californians who still have jobs. The same is likely for Oregon and other nearby states as a result of increased 'migration' of illegal immigrants in search of work.
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