For all the fuss over Donald Trump’s wall, there has been scant talk about what it would actually do for the economy.
Of course, the U.S. President insists his beloved wall is an economic winner.
In his recent Oval Office address, Mr. Trump insisted the wall would “quickly pay for itself” as Americans reap the benefits of a more secure border and a revamped North American free-trade agreement.
“All Americans are hurt by uncontrolled, illegal migration,” he said. “It strains public resources and drives down jobs and wages.”
To hear Mr. Trump tell it, walling off the southern border would create a paradise of more and better jobs for all Americans.
There is no denying that Mr. Trump’s promised wall – now at the centre of the U.S. government shutdown conflict – is a political winner. He likely wouldn’t be President without his build-the-wall slogan.
Unfortunately, the best evidence suggests the wall is an economic loser. New research by economists at Dartmouth College and Stanford University finds that, on balance, a wall would be a bad investment. A massive extension of existing border barriers would produce just a 1-per-cent drop in illegal workers in the United States, boost the incomes of low skilled workers by less than US$1 a year and depress the incomes of college-educated workers by nearly $8.
Most notable is the finding that the economic benefits are meagre, relative to the steep cost of US$5.7-billion, or roughly $15 for every American.
That money would buy less than 300 miles of wall along the nearly 2,000-mile border. Building even more wall would inflate the costs, and the resulting economic damage.
For every migrant the wall keeps out, the United States would lose US$30,000 in economic output, or a total of US$4-billion a year, according to economists Treb Allen of Dartmouth and Cauê Dobbin and Melanie Morten from Stanford. They base their findings on an examination of the 2006 Secure Fence Act, which allocated US$2.3-billion to erect barriers along nearly 600 miles of the U.S.-Mexico border. They concluded that the overall economic impact was “largely negative,” although there were “paltry” benefits for low-skilled workers.
So, no Mr. Trump, the wall would not pay for itself.
Most Americans don’t even want it. Only 40 per cent of Americans think it’s a good idea, according to the Pew Research Center.
Even worse, there is almost no talk about policies that may actually accomplish what Mr. Trump insists he wants. The poisoned partisan atmosphere in Washington has stifled rational discussion about immigration reform and border policies.
That doesn’t mean there aren’t good ideas out there. For example, the Dartmouth and Stanford economists also modelled a “counterfactual” policy proposal. They calculated that reducing trade costs between the United States and Mexico by 25 per cent would raise wages on both sides of the border, including substantially increasing the incomes of both low-skilled and college-educated workers in the United States – by US$58.67 and US$80.59 respectively for each worker.
Many other issues aren’t being talked about, including what it would cost to wall off the entire U.S.-Mexico border. A mere down payment would be US$5.7-billion. Estimates range from a low of US$8-billion to US$285-billion for the whole enchilada.
A complete border wall would also do damage to the Mexican economy and disrupt fragile environmental ecosystems along the border. And once the entire border is walled or fenced, where might desperate migrants go to get into the United States? The influx of migrants into Europe via the Mediterranean suggests that seas won’t stop people determined to get into the United States. Human smugglers could easily exploit the vast shorelines of the U.S. in the Gulf of Mexico, and along the Atlantic and Pacific Oceans to get migrants into the country. And that would require substantial new money for the U.S. Coast Guard.
And while we’re pondering what-ifs, Canadians might want to think about where the wall-building crowd in the United States will look next once they’ve finished work on the southern border.
Imagine how that would change the lives of millions of Canadians.