The economic consequences of xenophobia

From an article in today's New York Times:

RIVERSIDE, N.J., Sept. 25 — A little more than a year ago, the Township Committee in this faded factory town became the first municipality in New Jersey to enact legislation penalizing anyone who employed or rented to an illegal immigrant.

Within months, hundreds, if not thousands, of recent immigrants from Brazil and other Latin American countries had fled. ....

With the departure of so many people, the local economy suffered. Hair salons, restaurants and corner shops that catered to the immigrants saw business plummet; several closed. Once-boarded-up storefronts downtown were boarded up again.

Meanwhile, the town was hit with two lawsuits challenging the law. Legal bills began to pile up, straining the town’s already tight budget. Suddenly, many people — including some who originally favored the law — started having second thoughts.

So last week, the town rescinded the ordinance, joining a small but growing list of municipalities nationwide that have begun rethinking such laws as their legal and economic consequences have become clearer.

Read entire article

Boarded up businesses in a previously thriving downtown are among the consequences of measures that make immigrants feel unwelcome and drive them away on the local level. Farmers moving their operations to Mexico or having to contract with the government for convict labor in order to harvest their crops are among the consequences we are starting to see on the national level as a result of making it more difficult for illegal immigrants to enter the country.

What would be the economic consequences if we could, as some people claim to want to do, deport all the illegal immigrants form the United States? People who understand how important illegal immigrants have been to the nation's economic growth of the last 20 years or so talk about economic stagnation and recession -- the national equivalent to Riverside's boarded up downtown. The impact on the Social Security system would be huge -- the illegal immigrants have been paying in while getting nothing back.

As the baby boom generation starts to retire who would serve them in restaurants or make their beds in hotels and nursing homes?

Actions taken based on negative emotions such as fear and xenophobia often turn out to have been mistakes.