The Real Cost of Deportation

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Transcript

SPEAKER_00: 0:00

Do you think immigration helps or hurts? This is going to surprise you. Welcome to Pyconomy. Here we cover everything from finance, economy, and how it affects you. Please welcome your host, Kyle Talks. Thank you. Thank you. Let's jump into it. We have a big episode today. I'm not going to yap. This is probably the shortest yap session I have because we have so much things happening. to dive into today. But what I wanted to start to say is, if this is your first time checking out Kyle Talks, if this is your first time checking out Fi Economy, you are plugged in. Give yourself a pat on the back. You, yourself, care about setting yourself up for a successful future, and by what, what do I mean by success? You just know what the heck to do with your money. You're plugged in, you're learning how to think about things, you're expanding your financial literacy. This is what Phyconomy is about, expanding what we know so we can make better, more informed decisions. So if this is something you enjoy, please go ahead and check out every other week. There's a new Phyconomy episode. And thank you for those who have continuously supported me and listened to the show multiple times. I want to jump into today's topic as it's very, very important. There's lots of politics involved. There's a lot of economics that present themselves that are also involved. So let's jump straight into these articles. Before we start, I also want to let you guys know these articles are linked in the show notes. So I can't go over all of them. Maybe I missed something. Maybe I have a bias that I can't see. That's why I provide these articles so you can look at it yourself. You can read it yourself. or plug it into ChatGPT, you know, whatever you do, I don't judge, so you can give yourself a better holistic view of what's going on. One last quick thing is I don't know everything. I'm only 28 years young. I don't know what I don't know yet. There's so much of the world I don't know. But I did go to school. I went to school, that kind of thing. I went to school for business management and finance, and I've worked in public markets, private markets, the political stratosphere. So I know a few things, but I don't know everything about it. So I'm going to go through these articles, give my takes, what this could means to the future, what I've heard, and how we can best learn and best position ourselves as individuals going forward. So we're jumping into our first article. It is linked in the show notes below. It's called segment one, the 275 billion, billion B, not million, not thousands, millions, billion question. If you guys, as you guys know, there has been Mass deportations happening in California, in Los Angeles, California, where I reside. It's taking a quick break from the money. We're talking about people that are... Now, it's not everyone, right? Let's think about this. There's people who do intend harm, but there's Americans who intend harm. There's those people. But there's also people who came over, immigrants, who came over in search of a better life. and have had families and are working to care for their family. And they are getting taken away from their homes simply because they are, what's the word, undocumented. Yeah, it's unfortunate. If you're providing, if you're building, if you're working, setting good family structures, then... It's unfortunate that these people are ripped from their homes. And we can do better as a state, as a country, because we're going to go over this. This country is built on immigration. Yes, you say that. That's a big talking point. But do you truly understand what that means? Do you understand the tune of$275 billion? Okay, let's jump into the economics now. The article is down below. I'm gonna go over it, give a quick summary, read a couple of lines. I can't cover it all, so please, I urge you to read this article for yourself. Let's jump into the article. According to a new report by the Bay Area Council, oh my gosh, Bay Area Council Economic Institution, mass deportations could cut California's economy by up to$275 billion. Keep in mind, this is up to. What it's currently at is a little different, but this could slash 10% of the state's total output, or it could slash 10% of California's total economic output, and that has fast simplifications for the country at large. What industries are most at harm here? What industries are getting cut the most? What industries are gonna face the hardest how to progress forward. I can't think of the word. Let's go over the industries. So construction. In the state of California, over 20% of the workforce is undocumented. Move it to agriculture, where harvest, seasonal harvest, whether it be, I mean, I don't know, agriculture, Apples, plums, oranges, whatever it may be, whatever season that those are pertinent for. Over 40 to 60% of agriculture is undocumented individuals who are getting paid less, that more in a second. Hospitality and food service, they have a major immigrant presence. We're talking 30, 40% plus immigrants and hospitality and food service within California. What does this mean? Your construction, your agriculture, your food services, your hospitality services, your experiential things are all gonna take a dip. We need to understand why it's taking a dip, because we have people who've done this work for years, who have built your home, they've built a Taco Bell, they've built, I don't know, Wendy's, your hospital that you're staying in, whatever it is, They have built that. And what do I mean by that? Immigrants who have come into this country illegally. And they have built these things. So quite literally, California, and we'll get to the country as a whole, built on immigration labor. You're looking to face about 30 to 40% decrease in services and decrease in funding across construction, across agriculture, across hospitality and food services. There's that point. The second point I wanna make here And I'm taking this article bit by bit because there's a lot here. We need to do something about these businesses that are taking advantage of immigrant labor. I was having a few conversations with a couple individuals that I agree and don't agree with. And they agree and don't agree with me on many different things as well. But interestingly enough, with people I agree and don't agree with, Every single one of them brought up the prospect of dealing with companies that are taking advantage of immigrants. Also, an immigrant comes to work for construction. They want to make good life, good wages, good for their family, which is noble. It's hard to say that's not a good thing because it is. And, you know, we have minimum wage laws. We have minimum wage protections here in the states. So when a undocumented immigrant comes across wanting to build that better life, in construction and agriculture and hospitality and food service, these agencies will take advantage of it saying, oh, you're not a, what's the legal word here? Legal American citizen. So what we're going to do is we're going to pay you,$5 on the hour,$3 on the hour. I've seen as low as$2. I've seen as low as$1 on the hour to perform this work. There's two issues to this. One, you see that for the individual who's trying to make a better life for themselves, that immigrated to the States to build something for their family, they are completely getting paid under what I would call a human right, just a basic living wage. And even the minimum wage isn't a basic living wage. So this is worse than that. Minimum wage is not even a living wage. This is even worse than that. And on top of that, so they don't, immigrants don't see any direct benefits to this, but businesses see huge benefits to this. Let's just talk about construction, where over 20% of the workforce is undocumented. 20% of your workforce, if you're a construction owner, you're paying$1. Let's say you have 100 guys that work for you. 20 of them are getting paid$1 an hour. 20 of your workers are getting paid, maybe one or two of your workers might get paid in total an hour. And that's just looking at construction. We're not even looking at agriculture and food service hospitality. There's an issue that presents itself there. And really what's unfortunate is these are illegal. These are illegal things that can happen because businesses are there to make top dollar. Of course, that's what business does. Businesses are not your friends. They're trying to make money. And they're making money and taking advantage of immigrants who want to build something better for their lives. Two points there and something we all need to look at. What's the ripple effects of this? We talked about what this means for businesses. We talked about what it means for immigrants. We talked about what it means for you. Not only if you live in the state of California, but what happens across the country as well. What does this mean? There's fewer workers. Less productivity. There's less productivity. Bigger supply shortages. Higher prices. Oh, you want this? I don't know. Think of a place that you go to a lot that you enjoy. Oh, you want us to build this building? It's going to have to go up at least 10 times and it's going to take longer. More money, it'll take longer and won't be done as efficiently or quite honestly as well. You're dealing with these effects of having fewer workers, less productivity. Your tax base shrinks. This is something that's for all. all of us, this is something that's relevant, tax-based. So immigrants, both documented and undocumented. And by that, I just mean they're a legal citizen or not a legal citizen. They pay into sales tax. Can't get away from it. You can't get away. Even if you're a immigrant who is not fully a US citizen yet, you are paying the cost of sales tax. Can't get rid of it. That's crazy. Property tax. and income taxes. Deportion of mass that we've seen is gonna drain this. So you're gonna have much less taxes, much less, well, anything government runs not good anyways, to be super honest. And it's gonna be even more so not good. Consumer spending, you're gonna see much less of it. Why? Because when you deport hundreds and thousands of residents, you have fewer consumers. You're hurting small businesses, landlords, schools, local economies. So if this can happen in California, what is the effect of this nationwide? California in and of itself is a huge state and it represents 15% of US GDP. This could set off national economic turbulence. You can see the ripples and effects of this across the country simply just from California. If you're thinking to yourself, this doesn't affect me, I live in Maine or Rhode Island, wherever you live, that is blissful ignorance, my friend. This will affect you. And I think the big question that we can get at this article as a whole is can we deal with the smaller labor force? Can we deal with smaller economies? Can we deal with smaller taxes? Because Immigration is so big into who we are today, and I mean who we are as a country. Many immigration, they've built. This article alone, we're going to go through more that will prove this point even more. Whatever you feel about immigration, they have built this country, and we are, we Americans, legal Americans, are benefiting from that. So can we absorb these smaller labor forces? This is just... Is it just small chaoticness, long-term growth, or is it small chaotic, and then will it continue to be chaotic in the long term? This isn't just numbers. These are real people with real lives. This is a real impact on cities, impacts on jobs, small businesses. When you take workers away, when you lower that labor force, there are going to be effects, positive or negative. There's gonna be effects on this. Again, this article link is in the show notes. Please go read this for yourself. Let's jump into the next one. The immigration tipping point. So we've talked about the money. We've talked about how this may affect Let's dive a little bit deeper. So this article is also linked in the show notes. Let's continue. For the first time in over five decades, the U.S. is expected to lose more immigrants than it gains. That can be a positive or negative, depending on what you believe. But financially, economically. Remember, red is red, blue is blue. Let's try to be. If we're just looking at the economics of this. It ain't good. It's not looking good for us. So let me read that sentence over the article again. For the first time in over five decades, the U.S. is expected to lose more immigrants than it gains. This reversal is driven by stricter policies, targeted deportations and a general climate of fear. especially in mixed status families and communities. What does that mean, mixed status? Maybe your mom is a U.S. citizen and your father is not, et cetera, et cetera. We're looking at even more economic risk of losing one of the key engine growths of the United States, GDP slowdown. We're looking at a GDP slowdown. So let's double tap, let's enlarge this image. California itself is 15% of the nation's GDP. And by nations, I mean the U.S. Our economy could be cut up to$275 billion. By ours, I mean California because I'm in California. So we're looking at$275 billion loss in services GDP, which is gross domestic product. GDP is just what a certain country state puts out, how useful they are in numbers. services etc and that's about 10 of the california's total economic economic output and if california itself is 15 of the u.s is economic output and taking a 10 cut there will ripple and will go to other um economies as well looking at a five percent to seven percent shrink in gdp so overall in the country you're having less detailed We're producing less because of the immigration issues. There is a social security threat. So younger immigrants, documented or undocumented, contribute to social security, helping to support an aging U.S. population. I have worked in aging. I have done work in aging. This is something that affects me. Maybe it doesn't affect the work that I do. This may not sound super pertinent for us that are in our 20s, which is the vast majority of people who listen to this podcast. But if we just look at it from our elderlies, those who are wise beyond their years, there is a small social security threat. Now, this doesn't mean like, oh, your social security is going to dry up in total. This is it. No, um, that's, this is like bottom of the totem pole issues, but it is still a very real issue that can be faced. And if, when I believe this, when social security fund, no one's going to use it when we're old, I don't think we're going to use social security. Um, when that dries up, I'll tell you what has nothing to do with immigration. I promise you that, um, we'll do that ourselves. Um, there's, there's labor gaps. So we talked about it. Um, the, Jobs, they're taking advantage of undocumented immigrants. What they're doing is, hey, I'll pay them a dollar an hour compared to the 15 I'm mandated to federally. Oh, I'm up. If I'm a business dude, I'm up. I'm making so much money and he's producing so well for me. I'm up so much. That's ethically wrong, I would say, but it's completely legal. It's completely legal, and our laws, in fact, by nature of our laws, support that. So we're gonna see larger labor gaps. So the US already has a tight labor market. We talked about how many workers in a previous article. We're losing more workers. It's gonna deepen the gap in our labor forces, and there's gonna be a lot of jobs to fill. So hopefully we're applying. There's going to be a lot of jobs to fill. What are some underlying causes of all this? As we know, there's been targeted deportations in California. There's policies like expedited deportations. There's worksite raids and visa restrictions are creating instability in workforce and in personal lives. Legal government, in this article, This part surprises me. Through all this, even legal immigrants are second guessing whether to stay or to come at all. Whether you believe, whatever it is you believe, looking at this from an economics point of view, if I'm coming here as an immigrant and I want to build something better for my life and I see this, I have issues. Now, the goal of To the best of my knowledge, at least, the goal of these raids is to get illegal immigrants, people who are here in the United States illegally, out of the country. Sure, you know, legal laws, they're not here illegally, whatever. But there does become a problem where you have people who are wanting to build something good for them and their families and return this money illegally. and build up the U.S. GDP, build up our foods and services, constructions. There might be some issues there. And there's political takes on maybe they should have first to become illegal immigrants. That's not what we're discussing here. We're discussing the strictly economic, which is hard to do. And there's lots of political rhetoric going on where there's uncertainty. So with that in mind, what are some other... What are some other agencies? What are some, my work language came out. What are some other countries doing? So for example, countries like Canada, Australia, UK, they're expanding their legal immigration. In the US, the United States, there is a risk of falling behind and attracting talent in construction, in trade, in agriculture. All of these sectors that we've spoke about have risk factors. So whether you're pro or anti-immigration, whatever you are, we want people here that are from all kinds of walks of life, different ideologies, different beliefs. I want you here at this podcast. If you're pro or anti-immigration, I want you here. So whether you're pro or anti-immigration, the data is clear. The economy depends on people coming here, not leaving. And there is a tipping point. We're at the States in the, in the States right now. Um, I believe that, um, the economy, I think statistically has depended on people coming and working and providing and contributing to the GDP. Um, before we move away from this article, I want to say, uh, I want to add a little bit of my two cents, even though no one cares, you know, um, And I understand both sides. I understand the fact that they are like, they're technically not legal in the US, in the States. And there are bad actors who obviously come to the States and do bad things. There's bad Americans and there's people who come to America. There's people in America who want to do better for themselves. I think that's true. I think both of those things can be true at one point. They're not all good people and they're not all bad people. Those are the facts. That is what it is. That is not even an opinion. That's just real. Before moving away from this immigration topic, oh, my voice cracked. What I do want to say is that there are people who are building this economy in California and at a national state level. They are providing. And there are aspects of becoming a legal citizen that I am not aware of. I was born here. I don't have to worry about that. Thank God. I don't have to. I was born here. I won the lottery from the office. A member of creed was like, I will already won the lottery. I was born in the U S of a baby. True. I believe that's more true today than ever. So that's looking at economic view politically on those people who are building something good and building families and contributing to this GDP. Maybe they should be given fast tracks. Immigration. I don't know. Maybe that's a hot take. Let me know what you think. Maybe if there are good people doing good things, raising a family, contributing to the GDP, maybe they should be given priority status. I don't know. Maybe that's controversial. I don't know. But that's what I generally believe about immigration. So we went over immigration. And let's jump into the last thing. And this is rather new. The current president, President Trump, versus the money managers of America, the Fed. So for President Trump has publicly, let's jump into the article. This article is also in the show notes. President Trump has publicly criticized the Fed chair, the main man, the head of the money managers of America, Jerome Powell, for not cutting interest rates quickly enough, especially as inflation remains sticky. This piece explores how Trump's pressure campaign could backfire undermining the Fed's perceived independence. So we'll go into a few pieces of this, but before we get started into this article, know we've already looked at why inflation is hard. We already have looked at why pricing and spending is up, because we're looking at 50% of GDP being cut in one state alone, 10%, and that has massive implications for the country. So we can see why inflation is hard. Things are going up, construction, Agriculture, hospitality, food service. We're all seeing these prices go up. And who has to pay those prices? Me and you, the people who are consumers of this. So keep that in the back of your mind as we go through this article. And one more thing to remember. If you've been to this podcast, you've heard this a million times. If you haven't, I'll give you the quick, quick kind of dirty version. Sit down. Money is not made when it's printed in the United States. Money is made when it's loaned. For example, I want this nice Hellcat GTR or whatever, but I don't have$30,000 in cash to pay for this Hellcat. No problem. I go to the bank, tell them I want this Hellcat GTR. Oh, beautiful. We'll give you a loan for$30,000. Boom. Money's created. You just made$30,000 appear out of thin air. That's how money works. It works in loans and interest. So that's why when we talk about increasing or decreasing interest rates, so if interest rates are lower, money's cheaper. If interest rates are higher, money's more expensive and you won't buy as much. You'll hold that money to yourself. That's kind of the quick, super layman version of interest rates, but that's how that works. So keep both of those things in the back of your mind. Let's jump forward. Trump wants aggressive rate cuts to stimulate the economy. Powell and the Fed are hesitant, citing inflation risk and long-term credibility concern. Markets fear that markets fear a Fed. So the Federal Reserve is the money managers of America. The markets fear that it's that the money managers are politically compromised because they're looking at Trump's comments and he is the current president, sitting president. So are they making decisions on what's best for the economy or we're getting pressured by the president to make this decision? Let's continue. There's some implications from this. Investors believe that the Fed, the money managers of America, are being pushed around. Yields could rise. There's less trust in there because they're beholden to whoever the current administration is. Whether it's politics, or excuse me, whether it's Democrats, Republicans, the Green Party, whatever, the money managers become, succumb to, okay, who's in seat? How can we please them? Instead of for the best of everyone. The Fed's ability, there's also credibility issues like we just, that comes with credibility issues. The Fed can't anchor inflation. They can't, Settle expectations. It all perceives on their perceived neutrality, but if they're not neutral, that presents some questions on their credibility. There might be rising borrowing costs. Inflation might go up. Interest rates might go up. There's also political pressure, as we've discussed. It might make the Fed more cautious. Do we want the money managers of America beholden to whatever the current administration is? And that means Democratic, Republican, et cetera, D all the above. Do we want the people who manage our money beholden to politics, to a certain party's politics? Now, I don't care if you're a Democrat, Republican. I really don't care. But that idea should scare you. Whether you think you are completely right and the other side is wrong, genuinely doesn't matter. It should scare you that if your party switches in a second or believes something that you don't, all of a sudden it's a problem. You don't agree now. Oh, but you did a second ago. You said everything they believe and that's you. Which is why there is a... Hear me when I say this, beautiful people. There is a danger... And these ideologies that say vote blue no matter who, vote red no matter who, whatever the conservative one is, I don't know, whatever it is. These are dangerous ideologies. Vote blue no matter who, vote red no matter bed, I don't know. It's... Scary, because these politicians, as we've gone over the numbers that we've discussed earlier, simply care about making more money. They do not care about you. The government is not going to come save you. If they did, federal minimum wage wouldn't be at$7.25. You see what I'm saying here? You get what I'm trying to say? They do not care about you. That's why these ideologies are dangerous. That's why you need to require to think for yourself, look at issues, and do the research. What can we look at in history? What does this look like in history? In the 1970s, President Nixon pressured Arthur Burns, who was the head guy money manager of America, to make decisions based on his political leanings. And that led to crazy inflation in the 1970s. Could we be seeing a repeat of that today? The last thing the markets want is a Fed chair who looks over his shoulder. Did I say the right thing? Does that line up with what you think? Did we do right, Mr. President, whoever it is? Independence should not be optional. It should be foundational for them and for the people of this country. There it is. There's everything. That's all the things here. So what did we talk about? We talked about the economics of immigration. Then we talked about the economics of deportation. What sectors are going to face the most heat? What are some practical issues that we will face based on all of immigration happening? And then we looked at practical implications of President Trump pressuring the Fed, wanting them to kind of bow their knee to his political ideologies. And we talked about why that's bad, and we looked at some historical examples that give us an idea of why that's bad. There's immigration crackdown. There's a shrinking labor supply. There's the tariffs that we have talked about in a previous episode, and there's trade tensions. Fed inaction. Fed is stuck between a rock and a hard place, quite honestly. So my question for you, looking at all these articles, I have a few questions for you. Are we heading towards high inflation and low growth? Is our prices going to start up? Are prices going to go sky high and we get less growth? Or is this just an adjustment period? President's only been a president for about a year now. We got to focus on things. This is just a growing thing. Which one is it? Are we headed for the worst or is this just growing pains that will figure this stuff out? And here's the thoughts I want to leave you with. These are jobs. These are rents. These are groceries. And they all affect you. Things may look rocky, but you are positioning yourself to be ahead. You are positioning yourself to know what's going on. To be plugged in. To know what to do with your money. And understand the issues that come from this. To understand what's happening. You're not just floating around. You're not just letting things happen to you. You're being aware. You're plugging in. Keep doing that. And it's going to pay you great dividends in the future. That's it for me, guys. If you've enjoyed, please leave a review. A little review. It may seem small, but it's going to help us become even the fastest growing podcast ever across multiple platforms. So wherever you're listening to this, please leave a review. Spotify, Apple, Podify, wherever. Please leave a review. If you've learned anything from this podcast, go ahead and share and like on Instagram, X, Kyla, I will repost it. Let's have a conversation. Let's dive into conversations. Thank you guys so much. Your part in listening and reviewing and sharing does more so more people can hear this information. So more people become aware of what's going on. Thank you guys so much. Enjoy the weekend. Have fun. Be safe. Make education safe.

UNKNOWN: 32:54

I'll see you guys next time. Peace.