Economics Of A Border Wall : The Indicator from Planet Money President Donald Trump has made building a border wall between the U.S. and Mexico one of his signature issues. Today, the Indicator looks at the economics of a border wall.
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Economics Of A Border Wall

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Economics Of A Border Wall

Economics Of A Border Wall

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CARDIFF GARCIA, HOST:

Jesus Morales lives in Naco, Ariz. That's a little town of about a thousand people right on the border with Mexico. Jesus is the fire chief.

STACEY VANEK SMITH, HOST:

Is it, like, desert-y (ph)?

JESUS MORALES: No. No, there's plenty of trees. We're in the middle of three small mountain ranges. We've got the Huachucas. We've got the San Jose Mountains. And then we've got the Mule Mountains.

GARCIA: Jesus' family has been in Naco for a really long time.

MORALES: My mom was born here. My grandma was born here. My grandpa was born here. My great-grandparents were, while my great-grandmother on my grandpa's side, my mom's side, she was born here way before this was even a state.

GARCIA: Oh.

VANEK SMITH: Amazing. So you've got deep roots in Naco.

MORALES: Naco, Mexico, Naco, Ariz., both sides of the border.

VANEK SMITH: The border. Jesus has always had family on both sides of the border. But when he was young, Jesus says it didn't really even feel like a border.

MORALES: Early '90s, I still can remember you still had a chain-link fence. That's what we had as a border. There with a big hole on the fence. I mean, you can drive a car through there. And they would just jump through there. They'd come to the convenience store, buy their groceries and just walk right back.

VANEK SMITH: (Laughter).

MORALES: That's how it was.

GARCIA: Jesus says that the lack of border enforcement was mostly totally fine. But he does say that in the 1990s, a lot of drug trafficking started happening near where he lived. And he even remembers seeing a couple of high-speed car chases.

MORALES: Sometimes they would even go in through town. I mean...

VANEK SMITH: Ooh.

MORALES: ...Border Patrol and sheriff and DEA. And all of them, law enforcement, would chase them.

GARCIA: Jesus says that that was part of why Naco eventually put up a huge metal fence.

MORALES: What they did, they put a - actually kind of like a solid metal wall that you couldn't see through.

VANEK SMITH: Naco, Ariz., built a border wall. This is THE INDICATOR. I'm Stacey Vanek Smith.

GARCIA: And I'm Cardiff Garcia. Today on the show, the border wall. There has been a lot of talk about the wall recently, especially from President Donald Trump, who has even threatened to shut down the U.S. government if Congress won't fund the construction of the wall.

VANEK SMITH: And part of the logic behind building a wall is economic. It's about jobs. There's this idea that undocumented workers take jobs that Americans would otherwise take, and then they push down the wages for those jobs.

GARCIA: A new report from economists at Dartmouth and Stanford looks at the economic effects of a border wall. And we're going to discuss that right after the break.

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GARCIA: Donald Trump has been talking about a wall along the U.S.-Mexico border ever since he was on the campaign trail. It's one of his big issues.

VANEK SMITH: But this is not the first time a president has pushed for a border wall. Back in 2006, President George W. Bush passed the Secure Fence Act. The amount of wall built then is actually roughly the same amount of wall that President Trump is proposing to build.

GARCIA: Melanie Morten is an assistant professor of economics at Stanford. And she's one of the authors of a paper about the economic effect of the Secure Fence Act.

MELANIE MORTEN: And this was a policy that built about 550 miles of fence between the period of 2007 and 2010. So in total, the current border has about 660 miles of fence. And so this gives us a great opportunity to understand what happened to migration and then what happened to the labor market.

VANEK SMITH: The first question Melanie and her colleagues asked - did the wall work? Did the number of undocumented workers coming from Mexico drop as a result of the wall? To measure this, Melanie looked at data about consulate ID cards. These are ID cards that undocumented workers will often get from the Mexican consulate after they arrive in the U.S. And the card allows you to do things like open a bank account or wire money.

GARCIA: So Melanie's team looked at the number of cards issued before the wall and after.

MORTEN: And so we find that the wall did change migration patterns but that the total effect was small.

GARCIA: Really small. The number of undocumented workers coming into the U.S. fell by .6 percent after the wall went up. That's our first indicator - .6 percent.

VANEK SMITH: It seems like not a very big change to me. Is that right? I mean, why'd it have such a small effect?

MORTEN: While I can't say for sure, my sort of sense is that if the main reason that you're migrating is to take advantage of the much larger income gains that you would have in the U.S., perhaps the wall isn't a particularly large deterrent given the large income gains that you're going to have.

VANEK SMITH: Melanie says people seem to have found ways around the wall. And Jesus Morales in Naco, Ariz., says this was consistent with what he saw.

MORALES: When they put that metal wall, the solid metal wall, about a - I'd say a month, two months later, they actually cut it. And they did a little door and put (laughter) hinges on the Mexican side. So when they had their scouts, you know, looking, when there was no Border Patrol, they would open that little door. People would run in. They'd close the door. And then, about a week later, they found it. The Border Patrol's over there, you know, welding the door shut. So it's (laughter)...

VANEK SMITH: (Laughter).

MORALES: ...Like a cat-and-mouse game. That's all it is. And they can build the biggest wall. They can do the wall 50 feet high and then put alligators, I guess, outside or whatever. They're still going to get across. I mean...

VANEK SMITH: What makes you think people will still cross even if they build it, like, 50 feet high?

MORALES: Because of the opportunities that they have over here. Most of the people that we've dealt with, they're just looking for work. I mean, they're hungry. They're broke. They - there isn't much work where they're coming from.

GARCIA: Work. This was the other thing that Melanie Morton, the economist, looked at. Her team specifically looked at the wages of U.S. workers before the wall was built and then after, the main question being, did the U.S. workers benefit when fewer people were coming across the border from Mexico? And granted, there weren't a lot fewer. There was just that small downtick.

Melanie and her colleagues divided workers into two groups, workers with some college education and workers with no college education. And here's what they found.

MORTEN: We estimate that the wall led to a gain of income of only 40 cents per year for low-educated U.S. workers.

VANEK SMITH: That is indicator number two - 40 cents per year. That was the increase in wages that low-skilled U.S. workers saw because of the border wall. That was the only positive economic effect Melanie and her team could find.

GARCIA: Forty cents a year - so tiny.

VANEK SMITH: It's very tiny.

GARCIA: Basically negligible. And it was a huge wall. In fact, the cost of building the wall was more than $2 billion. And Melanie's team calculated that every U.S. citizen paid the equivalent of $7 to build the wall. And so Melanie says even the low-skilled workers who saw a tiny uptick in wages lost money in the long run.

VANEK SMITH: Jesus Morales in Naco, Ariz., says putting up the wall did change some things. On the downside, he says, it was hard on some local businesses. Also, a lot of people get injured trying to jump over the wall. The firehouse where he works is right by the wall, and he says he's just seen a lot of broken ankles and broken backs.

GARCIA: On the other hand, Jesus says, there haven't been any car chases through the town in years. Mostly, he says, he doesn't like the way the border is being used by politicians.

MORALES: A lot of people up north make it - you know, a lot of these politicians make - they kind of make it public and kind of demonize the border. Oh, yeah - no, no, it's hell on Earth. No, it's not, man. They're just exaggerating too much.

I actually invite them to come and look at the border. Just - you know, I mean, we have a beautiful town here. Naco's a nice little town. Just come down. Stay here for a week or two, you know. Just kind of get the vibe, you know, of how we live over here.

VANEK SMITH: Jesus says he doesn't think Naco should go back to the days of the chain-link fence. But he says all of the border wall talk he's been hearing, pro and con, just doesn't seem to have anything to do with his experience of the actual border or how the border wall works. He says it's a lot more nuance and a lot more boring than everyone seems to think.

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VANEK SMITH: THE INDICATOR's produced by Constanza Gallardo and Darius Rafieyan and is edited by Paddy Hirsch. Our intern is Echo Wang. And we're produced by NPR.

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