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Friday, August 5, 2011

Hispanics Continue to be Victimized by US Immigration Policies

Professor Douglas Massey of Princeton has an excellent Op-Ed piece in today's New York Times that connects the dots between the current US immigration policy, the sub-prime mortgage practices that led to the housing bubble, and the rather astounding drop in household wealth among Hispanics as a result of the Great Recession. The latter finding is drawn from a new Pew Hispanic Center report that analyzes a just-released set of data from the U.S. Census Bureau's Survey of Income and Program Participation (SIPP). Among the highlights of Massey's comments are the following points:

Hispanic families saw the largest decline in wealth of any racial or ethnic group in the country during the latter half of the last decade: from 2005 to 2009, their median wealth fell by an astounding 66 percent. The reason? The implosion of the housing market, where Hispanic families had invested much of their wealth.But that’s only the latest chapter in a much longer story. Over the past two decades Hispanics have moved from the middle of the socioeconomic hierarchy, between blacks and whites, to a position below both. On virtually every indicator of socioeconomic welfare, Hispanics fell relative to blacks.This has nothing to do with nativist tropes like work ethic or resistance to assimilation and everything to do with misguided government policy: our immigration and border-control system has created a class of people cut off from traditional legal and economic structures and thus vulnerable to the worst depredations of the market system.Because of the irresistible draw of the American economy, militarization of the border didn’t really affect undocumented in-migration, but it did reduce out-migration — migrants knew that once they left it would be hard to get back in. Whereas there were an estimated 3 million undocumented migrants in 1990, the number rose thereafter to peak around 12 million in 2007 and 2008, at which point half of all Salvadoran immigrants, 60 percent of all Mexican immigrants and two-thirds of Guatemalan and Honduran immigrants were here illegally.
Thus the sudden creation of a new class of people, working low-wage jobs outside the legal labor markets. Not only was it difficult for them to safely accumulate wealth, but they were left uniquely vulnerable to economic exploitation — such as the promise of a mortgage with little documentation required at signing.When the Great Recession arrived, many Hispanics got hit with a double whammy: not only were many Hispanic homeowners left with negative equity, but the collapse of construction jobs, which had been a primary draw for immigrants beforehand, eliminated the very means by which they could continue making mortgage payments.
There is no easy solution to any of this. A lot of Americans benefit economically from the exploitation of undocumented immigrants, and the current family preference system favors family members of current legal residents over people who are coming to the US to fill spots in the labor force. There is no single policy that can solve the current problem without harming some people at the expense of others. The dilemma (essentially a conundrum) is to work out a plan that does the least harm to the greatest number of people. This is not easy, which is almost certainly why it hasn't been done. 

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