Repeat: What If There Are A Lot More Of Us?

I'm repeating this column because I'm out still and because I want to revisit certain themes I've touched on in the past. One of which is that census data has consistently under reported the actual number of people living in the US. I think this under count has skewed everything from retail sails to city populations. I first published this in 2006

What IF There Are A Lot More Of Us (Fun With Census Data).

With President Bush set to give a major speech on immigration on Monday I thought we should take a quick look at some census trends & data to see what themes might arise out of this debate.To start the US Census Bureau says that there are roughly 300 million Americans. I have not been able to find a number that states how many illegal immigrants this includes but I will assume that it includes a large percentage of the 11 million or so that are deemed to be in the country at this time. When you try to look at numbers of illegals in this country you see estimates all over the map. I've seen as low as 5 million and as high as 20 million.Based on anecdotal evidence here in Chicago I'm reasonably confident that 5 million is way too low and 20 million may not be high enough. We'll cover this in more detail in later posts but for now lets just say for the sake of argument that the real population of this country is between 305-311 million people. In other words we are under counting right now anywhere between 5 and 11 million people that supposedly don't exist but in the real world work and spend money and who have to eat and live somewhere. Now what should we start to think about?

1) All our assumptions about retail spending may be wrong. That is retail store analysis is done based on an economy that is severely under counting its population. That means that the reason for the strong retail economy could be because there are more people than we think spending money that we don't know about. Most of this would also be cash something harder to trace and analyze.

2) It would explain the paradox of how for example a city like Chicago supposedly has lost population in the past 10 years but is (along with this whole region) experiencing a building boom unlike any that I have seen in the almost 20 years that I have lived here.This is one of those issues that irregardless of one's feelings it is just better to follow the money. Doing that can tell you what is ultimately going to happen in spite of the current political rhetoric.

Let's say there are 15 million illegal immigrants here. They are mostly young and mostly doing menial day labor and service industry type jobs which most Americans do not want to do. The US needs younger people in order to make up the monetary deficit that is being created by social security and has a entry level employee vacuum. Even at minimum wage a day laborer earns more in a day than he can in a week in many places like Mexico. Perfect Adam Smith as supply is meeting demand and this will continue until the demand side of the equation goes away.They will continue to come and we will continue to employ them. We are not going to deport what would amount to the equivalent population of some small countries. Instead we will have to figure out how to assimilate them into proud American citizens (which by the way many would clearly like to be). As I mentioned above I will have more to say on the investment themes regarding immigration. However, each of these themes is best left to future posts where we can explore them in more detail.