The Peter Zeihan Podcast Series - Undocumented Immigrants' Impact on US Labor and Economy || Peter Zeihan

Episode Date: November 8, 2024

As the election approaches, the topic of illegal immigration is getting as much airtime as Brittney Spears did in the early 2000s. And I hate to burst your bubble, but all those undocumented immigrants are probably doing more good than harm.Join the Patreon here: https://www.patreon.com/PeterZeihan Full Newsletter: https://mailchi.mp/zeihan/undocumented-immigrants-impact-on-us-labor-and-economy

Everybody, Peter Zine here coming to you from Austin, Texas. And today we're going to talk about everyone's favorite topic this election season, illegal migration. I've now down on record saying that if the United States hadn't had the wave of illegal migration that had in calendar year 2023, about 2 million people, we'd probably be dealing with inflation north of 8% by now. So I figured that's worth a bit of an explanation. In most labor markets, you've got a degree of liquidity,

where workers can move from one subsector to another based on the economic moods and remunerations of the day. But for that to work, you can't be the United States. You see, here in the United States, the baby boomers are in the process of retiring. Two-thirds of them have already gone, so we have a labor shortage. In addition, the United States

in the midst of a massive re-industrialization wave as we prepare for the end of the Chinese system. Basically, if we want manufactured product, we have to build it ourselves. So demand has never been higher, and supply has been curtailed, so we no longer have that pool of labor that can shift from one thing to the other or be tapped in terms of building booms. And so anyone who is removed from the system immediately generates a pulse that goes through the entire network that drives prices higher. So yes, there are two million people who crossed illegally last year.

Most of them are in their workforce, most here in Texas. And as for the folks that are residing here illegally, which based on whose numbers you're using are somewhere between seven and four, 14 million. That's another huge chunk of the labor force that actually outnumbers the number of folks the United States have who might theoretically be looking for jobs. Unemployment in the United States is below 4%. We're at historical lows right now. So if you were to move some of the people who were working, we'd feel it immediately. Now, not all jobs are equal. These illegal migrants do tend to cluster in three general categories. The first one is health care, particularly when you're talking about something that's on the edge of a janitorial job, you know, moving people, clearing

bedpans, that sort of thing. The second is in construction, especially industrial construction, because remember, the United States is needing to double the industrial plant. That doesn't happen without building a lot of stuff. And third, and finally, agriculture, particularly in fresh foods, whether it's vegetables or tree fruit. These are jobs, these last two are jobs that Americans just don't want to do or won't do or can't do. They're hot, they're heavy, they're outdoorsy, working stuff. It's certainly not the sort of stuff that today's youth, especially Gen Z, is really interested in. And so that just leaves us with the illegal labor pool. If you were to move that labor pool from that, we wouldn't be able to harvest any of our fruits and vegetables. So say goodbye to most of

the produce in most grocery stores. We certainly wouldn't be able to build new homes or new industrial plant. So say hello to dependence on China until China's gone and then you just don't have stuff. and if you don't want to clean your own bedpan when you go into the hospital or you retire, well, then, you know, by all means, be against migration. The question, of course, is whether we can amend our legal structure so that we actually have an updated immigration system to process these people in a way that we find approving. At the moment, we haven't had meaningful immigration reform in this country since the 1980s, and folks on both sides of the political aisle have taken steps at multiple points to prevent that from happening.

So if you were to wave a magic wand and make this all work better, you'd find a way to induce the would-be illegal migrants to actually collaborate with the system. And that's a very different sort of legal structure and enforcement, and would require a degree of policy creativity. We just have not seen in the White House and Congress for quite some time.