A Towering Wall With Towering Costs
On Tuesday, House Democrats will vote to prevent President Trump from using a national emergency as the basis for diverting federal funds to building the southern border wall. Even if it passes through the House and Senate, both President Trump’s veto power and the high unlikelihood of garnering Republican support for a veto override stand in the way; it’s an ill-fated effort and a frustrating reminder that partisan political mire can so often cloud reasonable economic judgement.
We don’t know the price of the wall--neither does President Trump. But we do know it will certainly be higher than the “$15 billion” quoted by Trump. To extend the existing 317 miles of pedestrian fencing to the Trump administration’s goal of 1000 miles, “Congress will still need to front at least $10 billion over 10 years. The entire fence would price out at $18 billion, accounting for inflation. Add in the costs associated with acquiring private land and building in less accessible areas and the price tag goes even higher.” (1)And what if the wall were not a fence but the “impenetrable” concrete wall President Trump has been mentioning lately? For the full 1,000 miles, MIT engineers estimate “Trump’s 30-foot wall (with a 10-foot tunnel barrier) would cost $31.2 billion, or $31.2 million per mile”. (1)Two other estimates yielded costs “in the $25 billion range. An internal Department of Homeland Security report from February 2017 concluded the project would cost $21.6 billion for ‘a series of fences and walls’ along 1,250 miles of the border.” (1)Add that to the cost of the recent 35-day government shutdown which S&P Global Ratings estimated to be $6 billion and the cost of maintenance, for which estimation is difficult. Congress allocated “$1.2 billion for the 700-mile border fence in 2006” but ended up spending “$3.5 billion for construction of the current combination of pedestrian fences and vehicle impediments. In 2009, the Border Patrol estimated it would need to spend an average of $325 million per year for 20 years to maintain these barriers. The Congressional Research Service found that by 2015, Congress had already spent $7 billion on the project”.(1)
By extension, the price of the 2006-2010 wall has also fallen on Americans’ incomes. Rather than the anticipated increases in American workers’ welfare, “college-educated U.S. workers lost an equivalent of $4.35 in annual income, while less-educated U.S. workers benefited on average by only 36 cents.” “Employees with a high school degree or less who live near the border in Arizona and California were the ones who benefited the most from walls and fencing, but even they saw their incomes improve by just over $7 — about the cost per American to erect the wall.”(2)
The wall expansion from 2006 to 2010 under the Secure Fence Act “reduced the total number of Mexican-born workers coming into the United States by only 0.6 percent.” (3)The persistence of illegal immigration issues stems from the attempt to cut the weeds instead of uprooting them. The primary advocates of the border wall seek to reduce illegal crossings without considering the economic incentives behind them. So long as these incentives remain, migration and visa overstaying will be shadows of the future.
How do we solve these issues without bankrolling the Mexican economy or heightening the barriers to entry? The solution is quite simple; by “simulating a 25 percent reduction in trade costs between Mexico and the United States”, Morten, Dobbin, and Allen found “that trade policy would be more effective in reducing migration than the border wall and that it would benefit workers in both countries.” Instead of the aforementioned loss in income, “college-educated U.S. workers would see an equivalent economic boost of $80.59 in annual income, while less-educated U.S. workers would see their economic gain rise, on average, by $58.67 in annual income.” (3)Part of the reason is that when Mexican imports are taxed, Americans bear the burden of higher-priced goods. “Sen. Marco Rubio (R-Fla.) said as much to Trump during a presidential primary debate in January 2016, explaining that the Mexican government ‘doesn’t pay the tariff-the buyer pays the tariff.’ Evidently, the lesson failed to stick.” (1)Further, UPenn sociologist Douglas Massey argues that enhanced border security over recent years has in fact encouraged workers to overstay their visas. He calculates that “as of 2009, 5.3 million fewer immigrants would have been residing in the United States illegally had enforcement remained at the same levels as in the 1980s.” Massey suggests “that a large guest worker program, similar to the one that the United States last had in the early 1960s, would reduce not just border crossings but the population of immigrants living in this country-seemingly a nationalist two-for-one.” (1)
Indeed, analysis of the bracero--or “manual laborer”--program between the 40s and 60s reveals that sending workers abroad to the United States alleviated domestic unemployment and strains on resources in Mexico. An added benefit of a guest worker program would be that workers are not permanent immigrants and therefore do not deprive their home countries of employment and the chance to elevate their industries. Recognizing that such a program might also have the consequence of economic dependency, a combination of a guest worker program and reduced trade barriers could potentially solve the short-run problem of Mexican instability while promoting long-run success in the Mexican economy.
Editor: David Casazza
Sources:
(1)https://www.cato.org/publications/commentary/why-wall-wont-work
(3)https://news.stanford.edu/press-releases/2018/11/15/border-wall-cameefit-u-s-workers/
