Monday, August 20, 2012

Immigrants as Economic Engines for Cities

Readers have suggested in the past that the best way to revive Flint is to flood it with immigrants who could take advantage of the cheap housing and start new businesses. It appears Baltimore is putting that plan into action.
Steven J. Markovich at Atlantic Cities reports:
Baltimore is hoping new outreach programs and legal protections will encourage more immigrants to make the Charm City their new home in the United States. Mayor Stephanie Rawlings-Blake hopes to attract 10,000 new families over the next ten years, and expects many to be immigrants 
In March, Rawlings-Blake prohibited police and social agencies from asking about immigration status, and asked federal immigration officials to explicitly tell people they arrest that they are not agents of the city. The city’s outreach to Latinos is particularly notable with city-run classes in Spanish. While more immigrant-specific initiatives are still under development, the mayor has launched a variety of programs to make Baltimore a more welcoming place, with goals of improving schools, lowering crime, lowering property taxes, and increasing jobs.

7 comments:

  1. Sure worked in the first half of the 20th Century

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  2. Bloomberg just said immigrants should be sent to Detroit. If they can stay in Detroit for seven years, they can become citizens. His argument is almost a racial commentary on the current citizens that they're poor because they're too stupid and lazy to make something of themselves. Immigrants will come in and do all the work that they can't do. No one seems to notice that California is now worse than Michigan. So much for the miracle of immigration.

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    1. Part of the disconnect in the immigrant argument is that the notable historical successes of immigrant communities have mostly come about via details that no longer seem to be the social ideal as espoused by leading social influencers:

      Successful immigrant communities were highly prejudiced and discriminatory, and self-ghetto-ized when that wasn't de facto forced on them. If you were like them and someone knew your people in the old country were good, you were good. If you were another nationality or another skin color, you were highly suspect at best. Employment was for relatives if possible, or relatives of friends.

      Successful immigrant communities were highly religiously focused and highly family focused. Religious and family values permeated the community's shadow self-government. Parochial schools were strong.

      Successful immigrant communities were anything but socialist. Immigrants who fell on hard times were supported through their church and their extended family, not through the official government.

      Many Chinatowns worked that way. The parents worked hard so that the kids could be business owners and the grandkids maybe could be doctors. Ditto for the Irish and Italians in most big cities, the Eastern European Jews of the Lower East Side, the Poles in Chicago and Hamtramck, the Balkan folks in Flint and elsewhere, the Syrians/Lebanese in Dearborn, more recently the Cubans in Little Havana and in New Jersey, the Koreans in NYC, and the Vietnamese in Texas, Louisiana and Minnesota.

      How much of California is like that now? Not much. And not much in Flint, either.

      There are plenty of hard-working immigrants from everywhere. American society has changed a lot from how it used to be, though.

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  3. One problem during the start-up phase of any such effort is that regions and locales have import/export economies and a balance of payments, just like nations. All locales import goods and services...probably no place in the US is self-sufficient. Those goods and services have to be paid for with wealth. That wealth has to be brought into the locale somehow. The traditional way is by exporting from the locale to surrounding locales, near or distant...outward shipment of manufactured goods, agricultural and fishing production, exportable services, mined materials and so forth, or tourist/vacation/entertainment services that people visit the locale to consume. All of these economic activities bring money into the locale that then can be spent on imports from other locales, near or distant.

    A significant percentage of total economic activity in most locales is distribution-related, or a local service. Money flows from one pocket to another, but doesn't bring more goods/services or wealth into the locale. There's nothing wrong with that...economies grind to a halt without distribution...but distribution cannot take the place of exporting, because distribution doesn't create any wealth that the locale can use to pay for its imports...and in many cases, distribution is inherently a part of the importing process. Stores like Walmart, Home Depot and Meijers extract large amounts of wealth from the community in return for the imported goods they sell.

    A locale can have entirely full employment, but if almost all of that employment is in distribution and local services, that locale will become progressively poorer.

    A classic problem with encouraging low-education, low-wealth immigrants to settle in an area is that most of them don't have the wealth and knowledge to create export-type businesses. So, unless an area already has export-type businesses that can't find enough workers, or the area simultaneously is able to attract such businesses or persons who are ready and able to form them, the influx of immigrants can't result in a commensurate gain in local wealth. Instead it just creates a more-densely-populated economic trouble-zone.

    Of course, government transfer payments take the edge off this kind of analysis. When enough people are either unemployed or employed in local distribution and service provision, the wealth paid into the locale by external governments can be significant. But, that's never enough money to result in wealth progress. At best, it allows a locale to decline more gradually.

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  4. Hey J Willy-

    Please don't take offense to what I'm about to say in arguing against your post because you've commented many times over the past few years on this site and I always enjoy reading what you have to say. However, I don't agree that wealth is simply transferred from one party to another. This is what Oliver Stone was trying to say in Wall Street when he had Gordon Gecko give his famous speech saying money is just transferred and only the greedy get wealthy. This is not true. When a cabinet-maker creates a cabinet from raw wood there is value added there and wealth is created along the way. The person who cuts down the tree adds value, the cabinet-maker adds value, the person that retails the cabinet adds value, and the delivery person adds value. The real problem in Genesee County is that people here only see manufacturing and specifically automobile manufacturing as the answer to an economy's ills. If the tax environment were friendlier in Michigan and Genesee County many more service companies such as those that provide cloud computing and internet routing services could easily fill in many of the abondoned plant sites. They can't because those services require huge server and router farms and those would result in huge personal property taxes. So, I see the failures more as political failures resulting in stagnation in business creation rather than any import/export kind of thing.

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  5. I reckon it's hard to structure your tax policy to encourage business formation when the local governmental unit that would receive the tax revenues and use some of them to provide services that the new industry would want, is operating just above bankruptcy.

    As to the business types that you mention, in my black-box economics analysis, those would be desirable business types because they (in effect) export services. That's what we need...local-export activity. However, they'd also be capital-intensive rather than worker-intensive, and would have infrastructure requirements that are more cost-effectively met elsewhere than in an old city. My understanding, for instance, is that far from multi-path-redundant connectivity being the local norm, there is no fiber-suitable ducting from the Cedar Exchange building at Beech and First to the Buick City site, or from the Pilgrim Exchange building to the AC East site.

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    1. Since I hardly ever disagree with the Willy Line, especially when trying to keep up mentally in areas out of my conceptual ability, I am an easy target for the "argument of intimiation" ie Ayn Rand. I feel the exchange between Anon. and Willy aint really that far apart,but I would have to give Mr. Willy the edge. If Flint could figure some way to coax the Amish/Mennonite community to take up roots in Flint's barren landscape, It would be interesting to see how long it would take for export and politics and some of the other problematical areas to adjust or change to their peaceful and fruitful existance. Mott Weston Axle Co., buggy production and other support industry. An historical reflection of the good ole days. Eh? Albeit with tongue in cheek.....or not?

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