7.12.2007

Latino Migrants as Recession Buffers (Don't You Love This Country?)

America derives an enormous benefit from its undocumented servants.

They boost the nation's wealth, shore up government programs, perform the most laborious and dangerous jobs, serve as scapegoats on-call--especially America's slacker class, fight and die in our wars, and remind us that some people still value hard work and families.

They also perform a tremendous benefit to their home countries. For example, Their migration North allows the elites to live in higher on the hog without having to support a social programs for the poor and working classes. And they return money, remittances, from their meager earnings to support their families.

Of course, we all know this already, right?

But here's a benefit I hadn't thought about: migrants as recession buffers.

Yes, consider the current recession in residential construction. According to U.S. government, data residential construction has fallen some 25 percent since early 2006. But employers shows a drop of less than 2 percent in jobs in the sector.

How is that possible?

There are different theories for this phenomenon in Is Mexico paying for U.S. housing downturn? (Reuters - 7.12.07), but it's clear to me that Latino migrant workers allow construction to expand and contract to meet market demands. As markets tighten, migrant workers are shed, company expenses are slashed, allowing Citizen owners and employees to weather the downturns without as much as scratch.

Latino migrants as human recession buffers!