Why Immigration Reform Is Critical To The Texas Economy

About 35 percent of construction-industry workers in Texas, and about 10 percent of workers in the state overall, are undocumented.

By Rhonda FanningNovember 2, 2018 11:24 am| ,

According to the Department of Labor, it’s 1969 again, meaning unemployment now stands at 3.7 percent, with earnings up over the past year by more than 3 percent. That’s in part because, since March of this year, there have been more jobs than workers every single month.

But low unemployment is an issue if you’re hiring staff for the holidays: where do you find the workers, and how do you keep the good ones? Well, offering more money is a start. But higher wages might also mean higher prices, and it appears that is already happening: The Wall Street Journal reported this week that everything from kitty litter to Clorox and Coca-Cola costs more now than it did this time last year. Got a plane to catch during the holiday season? Better book it now because prices are already taking off.

So, what do all these numbers add up to politically? If past is prologue, not much for the midterms, but then again, these are no ordinary midterms. Ray Perryman is president and CEO of The Perryman Group, an economic research and analysis firm based in Waco. Perryman says Texas is doing particularly well economically, especially during the last 10 years since the Great Recession. Some unemployment numbers are higher along the southern Texas border because there are higher numbers of young people, but he says on the whole, Texas has a pretty healthy economy.

“We’re creating jobs at a remarkable rate, we’re leading the nation – over the past 12 months over 400,000 jobs, just us and Florida are the only two states in that league,” Perryman says. “Certainly some challenges out there but there’s very positive indications.”

Recently, the head of the Federal Reserve Bank of Dallas said that immigration is key to growing the economy, and Perryman agrees, saying immigration reform is essential.

“It’s absolutely critical that we have immigration reform and be able to use that workforce,” he says. “Roughly one in 10 people who go to work in Texas today – about 1.2 million people – will be undocumented. We only have about 500,000 unemployed people in Texas, and very few of them have the skills that some of these workers have in construction and other areas. So basically, our economy would be in dire straits without the workforce we use now.”

But Perryman says the key to immigration reform is updating the laws so that hiring these workers isn’t a legal risk for employers, and so that the workers have less restrictions on when and how they can come to the U.S.

“Immigration is a huge issue and I know it’s become very politicized … but I have to tell you at the end of the day, it’s not Republican or Democrat, it’s just math,” Perryman says.

Immigration has an outsized impact on the construction industry. Perryman says while 10 percent of Texas’ overall workforce is made up of undocumented workers, it’s about 35 percent of workers in the construction industry. Right now, the industry is booming with projects all over the state, including cleanup projects from Hurricane Harvey along the Gulf Coast. In past years, Texas could draw workers from other states but Perryman says now, most states have full employment.

“We’re in a situation now where our population and workforce is simply not growing fast enough to keep pace with economic growth, and so we desperately need many, many solutions, one of which is some responsible immigration reform,” Perryman says.

In terms of how politics and the midterms play a role in all of this, Perryman says normally, the party in power doesn’t greatly influence economic growth. But with recent Trump administration policies related to trade and immigration, Perryman says politics are having an impact.

“We really do have some fundamental issues … that are really having a profound effect on Texas, and could really impact our ability to grow both short term and long term,” he says. “I hope the rhetoric cools down some after the election, on both sides, and that we can get together and come up with some reasonable solutions.”

Written by Caroline Covington.