01 March 2008

Immigration and $4/Gallon Gas

I got through college economics by the skin of my teeth. I have only a fleeting understanding of the workings of the economy.

But this opinion piece makes a great deal of sense to me.

How are illegal immigration and inflation tied together? In 2005, Bear, Stearns Senior Managing Director Robert Justich and a team of his economists issued a study on the impact of illegal immigration on U.S. economic indicators. They found that undocumented immigrants account for some 8 percent of U.S. workers, a much higher figure than the government reports. Justich's report explained that the number of people counted in productivity calculations is artificially boosted when there are more people working than are reported to the government. U.S. productivity is based on the amount our economy produces divided by the number of people working. If there are a lot more people working than the government takes into account, this makes productivity look artificially high. It can also help to conceal underlying inflation.

My personal belief is that inflation is and has been a lot higher than the government has been reporting, and undocumented workers play a large part in concealing the true inflation rate.

What difference does this make today? Inflation causes the dollar to be weaker abroad. A weak dollar makes everything we buy overseas more expensive. One of the things we buy a great deal of overseas is oil. There is some talk about $4/gallon gas. This week I heard Senator Obama say that we have to do something to strengthen the dollar to prevent that from happening. I agree with him on that.

I find it very interesting that the Seattle Post-Intelligencer, of all places,published this story. when coupled with the Obama quote, I ask: is there about to be a liberal backlash against illegal immigration? Boy, that would sure mix it up.

1 comment:

Clifford said...

you know uncle tony i do agree with you about immigration. Thats why my vote is going to come down on who can get american jobs back for american people. Due to the over abundance of companies and corporations bringing over Indian workers who barely pump any money back into the economy its part of the reason our economy is in such shambles.