The Economic Impact of Illegal Immigration.

Discussion in 'Politics' started by SouthAmerica, Aug 29, 2006.

  1. .

    August 29, 2006

    SouthAmerica: In May 2005 I posted the following on this message board regarding immigration (legal and illegal) and its impact on real estate prices.


    “Running Out of Bubbles”
    Published: May 27, 2005

    Remember the stock market bubble? With everything that's happened since 2000, it feels like ancient history. But a few pessimists, notably Stephen Roach of Morgan Stanley, argue that we have not yet paid the price for our past excesses.


    SouthAmerica: There are two economists that I respect their opinions, and in the above column one of them is mentioning the other one.

    Regarding Paul Krugman’s column:

    Years ago one of the top real estate economists in the US was Mr. Jack Lessinger.
    I remember reading one of his books more than 12 years ago – “Penturbia.”

    In that book he gives a full analysis of the real estate market in the entire country, county by county.

    There is one thing that I remember that he mentioned on his book – that the real estate market in the New York Metropolitan area, and in the Los Angeles area were at least 50 percent above the price that was justified in economic terms. Rentals were inflated as well.

    He said that the main reason for the real estate price inflation on these two markets was

    If wasn’t for the high volume of immigrants moving to these areas the rentals, and real estate prices would be 50 percent lower.

    That is the only information that I remember after reading that book many years ago.

    Today, Homeland Security rules make it very hard for a lot of people to come to the US.

    In the domestic front, seems to me that when I watch CNN News - the US has started a war against its illegal immigrants.

    Life is becoming miserable for the illegal immigrants, and very soon many of them will have no choice but return to where they come from.

    States are making very hard for them to get a driving license. It is illegal for them to get a mortgage to buy a house. Employers will receive very heavy fines if they hire an illegal immigrant.

    In some of these debates on television they estimate that there are close to 20 million illegal immigrants living in the US today.

    The flow of new illegal immigration also is slowing down since it is well publicized in most countries when the US has deported the illegal immigrants that they catch.

    This illegal immigration factor should affect in a negative way real estate prices at least in these two metropolitan areas.

  2. .

    August 29, 2006

    SouthAmerica: I am not in favor of illegal immigration or of an illegal immigration amnesty in the USA. But I found interesting what is happening here in NJ mainly regarding to the fact that immigration – legal and illegal – has a major impact in the value of local real estate prices.

    When you magnify these trends to communities around the country you can bet that will have a major negative impact on the value of real estate values around the country.

    Last Thursday when I had to go to Newark, NJ I stopped in the Ironbound section of Newark, an area of Newark where the Portuguese and the Brazilians are concentrated. I got a hard copy (this newspaper is also published on the web) of the latest issue of a Brazilian newspaper “Brazilian Press” that is distributed to the Brazilian communities around the country in the USA.

    One article called my attention about a town in New Jersey – Riverside – that started a war against illegal immigrants. A town with a total population of 8,500 people of which 4,000 are illegal immigrants – and out of the 4,000 people who are illegal immigrants 2,000 are Brazilians.

    Local militias armed with rifles and baseball bats started burning cars and houses of illegal immigrants and gave them 72 hours to leave their town. The local police confirmed the events.

    The new law passed by the city of Riverside allows the local government to fine $ 1,000 to anyone who rent a property to an illegal immigrant. The new law also allows for suspending business licenses of anyone who hires an illegal to work for their business.

    Overnight over 2,000 Brazilians were chased away from that town in South New Jersey, and most of them started looking for a safer place to stay somewhere else. These events started happening since July 26, 2006.

    The Philadelphia Enquirer also has been reporting on the events that are happening in Riverside, N.J.


    Brazilian Press – August 23, 2006

    Commentary: “Lei tira 2 mil brasileiros de cidade Americana”

    Em vigor desde 26 de julho, uma lei municipal antiimigração de Riverside, no Estado americano de New Jersey, provocou a saída de 2 mil brasileiros da cidade nos últimos dias. Das 4 mil pessoas "sem-documento" do município, com 8,5 mil habitantes, 2 mil são brasileiras - quase todos os imigrantes já abandonaram o local, muitos ameaçados por milícias armadas.

    De acordo com o jornal Folha de S.Paulo, a lei que determinou a fuga em massa de brasileiros considera crime dar emprego ou contratar serviços de imigrantes, sob pena de o infrator pagar multa ou ser detido. Entidades de defesa dos direitos de imigrantes contestam a lei, afirmando que caberia apenas ao governo federal americano legislar sobre o tema.

    Brasileiros relatam que milícias queimaram carros e casas de imigrantes e, armadas com espingardas e tacos de beisebol, deram prazo de 72 horas para que estrangeiros em situação irregular deixassem a cidade. A polícia local confirma os testemunhos.

    "Invadiram minha casa, jogaram uma bomba de querosene e quebraram meu carro", declarou a brasileira Rosilei Pereira, 39 anos, que trabalha como faxineira em Riverside.

    A nova lei também proíbe o espanhol e o português em anúncios, estipula multa de US$ 1 mil para aqueles que alugarem imóveis a estrangeiros e determina suspensão da licença dos comerciantes que empregarem imigrantes. Os reincidentes são passíveis de prisão.


    “Protest roils Riverside” - houting crowd taunts immigrants' supporters.
    By Joel Bewley and Nancy Petersen - Inquirer Staff Writers
    The Philadelphia Inquirer – August 21, 2006

    A peaceful demonstration yesterday in Riverside against a law punishing those who hire or rent to illegal immigrants was met by a larger, slur-spewing crowd that tried to drown out the protesting speakers from the other side of a police barricade.

    The immigration ordinance, which the Township Council approved last month, is racist and intolerant, said the Rev. Miguel Rivera, president of the National Coalition of Latino Clergy and Christian Leaders.

    "It is a law that causes division," he told about 500 supporters outside town hall. "It is a law that causes the animosity that we see here today."

    After an hour of prayers and speeches, Rivera and the protesters headed up Scott Street, the Burlington County town's main drag, as hundreds on both sides of the street cursed, spit and shouted at them to leave and never come back.

    Some in the crowd were intoxicated. Some waved Confederate flags, while others thrust their right arms up to resemble a Nazi salute. Dozens had signs calling for tighter border control.

    As the protesters walked along the center line, police kept the opposing crowd on the sidewalks. When the march ended and the two groups were allowed to mingle, the verbal attacks continued.

    Some claimed illegal immigrants took jobs away from citizens. Some said they were angry because some illegal immigrants pay no income taxes. For others, the matter seemed personal.

    "You spread germs," screamed Mary Goff, 32, a lifelong township resident. "You're ignorant, disgusting and lazy. Go somewhere else and give us back our town."

    Police arrested a man wanted on a warrant, but nobody was taken into custody for misbehaving.

    Officials in this town of about 8,000 said the ordinance was needed to ensure public safety by, among other things, limiting the number of people living in a single residence.

    The number of illegal immigrants in Riverside has been pegged as high as 3,500 by Mayor Charles Hilton, who did not attend the protest. Most are from Brazil.

    Rivera urged all immigrants, regardless of their status, to remain in Riverside while the ordinance is challenged in court. A lawsuit has also been filed to stop a similar measure in Hazleton, Pa.

    Three banks have pledged to work with immigrants in Riverside to help them obtain mortgage loans, Rivera said. He vowed to start a local Spanish-speaking church, and said pastors planned to return on the first day of school to make sure immigrant children attended without harassment.

    The Riverside law has made it acceptable to pick on immigrants, regardless of whether they are legal or not, said Marlene Lao-Collins of the New Jersey Catholic Conference.

    "It has created an environment of fear for all immigrants," she said. "How can you tell by looking at someone whether they are documented or not?"

    Mario Arriola said his mother had been heckled recently while walking to a store. Being an illegal immigrant makes him more anxious about the future than afraid for his safety, he said.

    "We want a peaceful solution to this," said Arriola, 18, who is studying business administration at Camden County College. "We are hardworking, and we cause no harm. Give us a chance."

    During a campaign swing through Delaware County, U.S. Sen. Rick Santorum (R., Pa.) told a crowd of party faithful that he could not support any measure that would grant amnesty to people who were in the country illegally.

    He said that his position set him apart from many other senators and from President Bush, but that it was an issue that resonated with the state's voters.

    "People here are very much for legal immigration," Santorum said to about 100 GOP voters at the Catholic War Veterans Post in Havertown. "Their families did it the right way."

    But those people also don't think it's fair to grant amnesty to people who came here illegally with forged documents and continue to work in this country using forged documents, he said.

    "I don't think people should be rewarded for breaking the law," he said.

    The Senate bill that Santorum derided did not offer unconditional amnesty. It would have required undocumented workers to pay fines and back taxes and hold a job before they became legal.

    A competing House bill, which Santorum favored, took a harder line.

    Santorum said one of the biggest reasons that wages at the low end of the economic scale were flat was the influx of illegal workers competing for those jobs.

    He said he would support a temporary-worker program that would force people here illegally to return to their home country and then apply to reenter under the terms of the new program.

    Santorum is in a tight reelection race against Democrat Bob Casey Jr., who has said he supported the Senate bill.
    For more coverage of the immigration debate, visit

    Also, see a slide show of protest photos at

    Contact staff writer Joel Bewley at 609-261-0900 or

  3. .

    “Businesses suing rivals for hiring illegal immigrants”
    By Peter Prengaman
    AP - Associated Press – August 23, 2006

    LOS ANGELES - Frustrated by lax enforcement of immigration law, businesses are taking their fight against illegal immigration to court, accusing competitors of hiring illegal workers to gain an unfair advantage.

    Businesses and anti-illegal immigration groups said the legal action was an attempt to create an economic deterrent against hiring illegal employees.

    "We see the legal profession bringing to this issue the kind of effect it's had on consumer product safety," said Mike Hethmon of the Immigration Reform Law Institute, a Washington-based group backing the efforts.

    A temporary-employment agency that supplies farm workers sued a grower and two competing companies on Monday.

    Similar cases alleging violations of federal antiracketeering laws have yielded mixed results. The California lawsuit is believed to be the first based on a state's unfair-competition laws, legal experts said.

    Santa Monica-based Global Horizons contended in the lawsuit that Munger Bros., a grower, hired illegal immigrant workers from Ayala Agricultural Services and J&A Contractors. All the defendants are based in California's farm-rich Central Valley.

    The suit alleges that Munger Bros. had a contract with Global Horizons to provide more than 600 blueberry pickers this spring, but nixed the agreement so it could hire illegal immigrants.

    "Competitors hiring illegal immigrants is hurting our business badly," Global Horizons president Mordechai Orian said. "It's to the point that doing business legally isn't worth it."

    Ayala Agricultural Services manager Javier Rodriguez had not seen the suit, but said the company did not hire undocumented immigrants.

    "If somebody doesn't have a green card or work documents, we don't hire them," he said.

    Messages left with Munger Bros. and J&A Contractors were not immediately returned.

    With an estimated 11 million illegal immigrants in the United States, undocumented workers are a large part of the nation's workforce.

    But immigration-law enforcement at work sites is limited. In fiscal 1999, authorities arrested 2,849 people at work sites, compared with 1,145 arrests last year, according to the federal Immigration and Customs Enforcement agency.

    To prove competitors hire illegal immigrants, businesses could use public records involving prior violations, testimony from former employees who have worked alongside illegal immigrants, and recovered W-2 tax forms that show people working under fake names and Social Security numbers, said David Klehm, the lead lawyer for cases in Southern California.

    Companies planning to file additional lawsuits include farms and factories that depend heavily on immigrant labor, Klehm said.

    Legal experts said the cases could be difficult to win. Under the California statutes, plaintiffs must prove a competitor directly harmed their business.

    "Unless you've got smoking-gun evidence, it's hard to tie economic loss of one business to another's practices," said Niels Frenzen, a law professor at the University of Southern California.

    He believes it is the first time the unfair-competition law has been used to target illegal immigration.

    The Global Horizons lawsuit came after a settlement was reached in a Washington state class-action suit involving employees of Zirkle Fruit Co., who sued their employer for driving down wages by hiring undocumented workers.

    Based on federal antiracketeering laws, the case was settled for $1.3 million in January after the U.S. Court of Appeals for the Ninth Circuit overturned a lower-court decision to dismiss it.

  4. .

    “Riverside bolsters its ban on illegal immigrants”
    By Gaiutra Bahadur - Inquirer Staff Writer
    The Philadelphia Inquirer – August 21, 2006

    Riverside's council last night reinforced the ordinance that has triggered a court challenge and made the small Burlington County community an unlikely field in the increasingly bitter battle over illegal immigration.

    It approved several amendments that do not alter the thrust of the ordinance, which bans hiring or housing illegal immigrants, but were designed to help it withstand the legal challenge.

    More than 250 residents attended last night's raucous meeting. Many expressed anger at the Rev. Miguel Rivera, the leader of a Latino clergy group that has sued the town in federal court and held prayer vigils and protests against the ordinance.

    "This so-called reverend says he's not done with Riverside," resident George Highland said. "But I say we're not done with him either."

    The township became one of a handful of municipalities across the country to take immigration enforcement into its own hands on July 26.

    The ordinance fines landlords at least $1,000 for renting to an illegal immigrant. It also denies business permits and licenses to any employer of an illegal immigrant, for a period of at least five years. A dozen or so other municipalities are considering similar crackdowns.

    The ordinance has deepened divisions in the Delaware River community of 8,000, a faded mill town recently transformed by immigrants from Brazil and Central America.

    A Sunday prayer vigil organized by Rivera's group, the National Coalition of Latino Clergy and Christian Leaders, to protest the ordinance grew ugly when hundreds of counter-demonstrators, some bearing Confederate flags and some making Nazi salutes, showed up. Some spat and cursed at immigrant supporters.

    Mayor Charles Hilton Jr. opened last night's meeting with a plea to the audience to be respectful and polite.

    "Nothing good will come from personal attacks, and they will not be tolerated," he said.

    Still, a few residents shouted and jeered at Andrew Viola, an attorney for a coalition of businessmen and landlords opposed to the ordinance.

    He said the law "subjects our local businessmen to repercussions if they cut the wrong person's hair, if they sell the wrong person eggs or give them directions on the street."

    Aida Cordova, a legal immigrant from Ecuador who rose to defend the town's immigrants, also was heckled. "I am a resident," she said, her voice trembling. "I pay taxes. I live in this town for six years. My children were born in this country."

    The council inserted the word knowingly to provisions describing employers and landlords who do business with illegal immigrants. It set $2,000 as the maximum limit for penalties, in accordance with state law. And it inserted a definition of illegal immigrant into the ordinance.

    The absence of that definition was one of the grounds for the suit against the township and Mayor Hilton filed in U.S. District Court in Newark last week.

    The legal challenge contends that the ordinance is vague and could lead to racial profiling. The suit, which seeks $10 million in damages, also says that the ordinance is unconstitutional because it trespasses onto turf reserved for the U.S. government.

    Township solicitor Doug Heinold has said the ordinance is legal because it penalizes businesses rather than illegal immigrants.

    The suit against Riverside makes similar arguments as another, also filed on Aug. 15, against Hazleton, Pa., the community that inspired the town and about a dozen others nationwide.

    The lawsuits are the first challenges to towns wading into immigration enforcement.

    Contact staff writer Gaiutra Bahadur at 215-854-2601 or

  5. The economic impact is not the cause of most worries. Its that immigrants from down south refuse to assimilate. They dont want to be Americans. They want to live in America and be Mexican. They are lowering the standard of living. By refusing to learn English, by cramping 25 people in a house built for 6 and by gobbling up resources they dont pay taxes into.

    Immigrants in the past came here because they wanted to be proud Americans. My great great grandparents moved here from France. They refused to speak French outside of the home and thrashed my great grandpa when they caught him doing just that. There were PROUD to be English speaking LEGAL immigrants.

    This is a new culture coming here...and they need to be dealt with firmly before its to late.

    All i`m saying is when you come here. Follow due process, file paper work, pay taxes, learn the language and you will be welcome with open arms. I would be proud to have a new citizen as my neighbor.
  6. neophyte321

    neophyte321 Guest

    He said that the main reason for the real estate price inflation on these two markets was

    IF this is accurate, I'm certain he was refering primarily to LEGAL immigration. And if so, your "theory", would not be supported by this statement AT ALL.

    REMARKABLY, Paul Krugman is on record stating ILLegal immigrants are a net cost. They consume far more in government services than economic activity they generate.

    One family of five kids, consumes close to 60k a year in educational expenses alone, for example, while they pay virtually nothing in taxes.
  7. .

    August 29, 2006

    SouthAmerica: reply to sws capital

    About 8 years ago I was living at that time in Nutley, NJ – which used to be a town populated by Italians and their descendants. It was a nice middle class community about 10 miles from New York City.

    We had a nice and quiet neighborhood and in most houses there were just a regular American family living on those properties. Then one day my neighbor told me that a house only a block away from where we lived an American family sold the property and moved out – that family was a father a mother and 2 or 3 kids. They sold the house to a family from India. Instead of one family 5 families moved to that house and overnight they had over 25 people living in that house.

    Needless to say the neighbors of that area were not happy with that kind of change in the neighborhood. These Indians wanted to transform our neighborhood into a Calcutta. I don’t know how over 25 people could live in a house built for a single family.

  8. I think one problem is that we have entered an era of 'symbolic' and 'theme' law

    under the rule of law, illegal immigration is illegal, no ifs, ands or butts

    yet, when confronted, the immigrants and their aiders and abettors, talk about statue of liberty, and themes of a 'welcoming society', and 'a nation of immigrants'

    what exactly, its the due process of law, in creating these themes and symbols?

    what consent did the average citizen give, in superceeding the rule of law with themes and symbols?
  9. neophyte321

    neophyte321 Guest

    Interesting point, and you made it without even mentioning the major theme, "Racism, Bigotry, etc ...."
  10. Pabst


    Without doubt immigration, both legal and illegal, has propped up home prices in the U.S.

    There's been a tremendous trickle up effect. Since I'm a native Chicagoan I know Chicago RE like the back of my hand. In the last 25 years an estimated 500,000 Mexicans have moved into Illinois. At the same time, the population of Chicago has been declining. Hence without the influx of Mexican's, many homes in older industrial neighborhoods that would have been virtually unmarketable to younger whites have found buyers. These Mexican buyers have allowed old school white "ethnics" an opportunity to then buy formally unobtainable homes in Chicago's middle class suburbs. The owners of those middle class homes have in turn found buyers which has given them an opp to move up to an even nicer suburb or one of those numerous new hi-rise condo's popping up all over the near North Side. Take Mexican's out of the equation and home prices within ALL sectors would be weaker.

    I'm not making a case for illegal immigration but rather I'm just stating an economic reality.
    #10     Aug 29, 2006