Follow the money. I find most political arguments and party rhetoric can easily be debunked by the pesky thing called ‘reality’. One of the best unbiased sources of reality is to follow the money. Money speaks louder than words, more accurately than politicians, and more clearly that all the good/bad intentions ever will.

The Federal Reserve Bank of Dallas recently released a white paper titled “The Impacts of Unauthorized Immigration on US Labor and Housing Markets“. It contains a lot of interesting data – something much needed and all to often missing in modern discussions of policy topics.

On the job front, it found that illegal immigration created an almost 1-to-1 increase in local employment and did not measurably affect wages. This is likely due to the fact each new person that showed up needed the equivalent amount of services: food, transportation, and work. The ongoing housing shortage, however, meant that there was a 30% growth in house prices and a 20% growth in rent prices since there was now an increase of demand without increase in supply of homes.

The report said the large increase in unauthorized immigration into the U.S. from early 2021 to early 2024 added roughly “seven million people to the U.S. population, nearly double that of legal immigration.” The white paper said illegal immigration is responsible for “roughly 30% of total employment growth over March 2021 to March 2024.” 

The authors of the white paper concluded, “We find that unauthorized immigrant worker flows increased local employment approximately one-for-one, without generating significant declines in local wages during the early 2021 to early 2024 boom period. At the same time, these inflows raised local house prices and rents, with little evidence of increases in housing supply. Thus, while the influx of these immigrant workers acted as a positive supply shock to local labor markets, it acted simultaneously as a demand shock to local housing markets, boosting rents given relatively inelastic short-run housing supply.” The U.S. was also dealing with COVID-19 during much of this time period, which economists at the time said had an impact on employment and housing. 

This kind of data gives us proof and evidence instead of rhetoric and simply wishing for certain things to be true when they may not. It debunks the idea that immigrants are likely stealing jobs or driving down wages (though local phenomenon could see these effects). It also tells us the very real problems of housing shortages and zoning laws – problems almost entirely created by political policy, land use laws, and zoning/permitting issues, and not a lack of organizations or companies wanting to build houses.