How much would an immigrant have to earn to defray the cost of added infrastructure?

After two weeks in South Florida, where the interstate highways serve mainly as parking lots from 6:00 am to 8:00 pm daily (Ft. Lauderdale/Miami is a 1.5-hour, 28-mile experience; see image below for traffic parked in both the regular and the $12 “express” lanes of I-95), I’m wondering why there isn’t more discussion around U.S. infrastructure and immigration. The Interstate highway system was set up in 1956 when the U.S. population was 169 million. Due primarily to immigration (immigrants and the children of immigrants) the population has doubled since then (Pew). Consequently, we sit in traffic jams instead of working or enjoying leisure and family activities.

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A naive analysis of immigration might start from the assumption that we could be better off economically any time that we could accept an immigrant who earns an above-median wage (also factor in whether kids are likelier-than-current-American-average to wage jihad? see Omar Mateen and Syed Farook, for example). But a larger population requires more infrastructure. Most of our infrastructure is inherited from 1850-1970 or so. If it costs us more today, in inflation-adjusted dollars, to build a bridge, highway, subway system, or tunnel, then we could be making ourselves worse off by adding population even if the new additions to the population earn an above-median wage. Does it cost us more? “Why California Stopped Building Freeways” is a 1993 article that describes “skyrocketing costs” through the 1980s. (See also Longfellow Bridge repairs will now take about as long as the original construction for how 2015-18 repairs will cost 4X, in inflation-adjusted dollars, what it cost to build the bridge in the early 1900s.)

Plainly there are some immigrants to Florida who boost the overall economy. A retired Wall Streeter fleeing New York income and estate taxes who buys a $10 million house and pays breathtaking property taxes will more than compensate for his or her burden on the infrastructure. But has anyone calculated the break-even point?

[Of course I realize that boosting an economy is not the only reason to welcome immigrants. However, it is an argument frequently made by advocates for continued and/or increased immigration.]

22 Comments

  1. Neal

    April 12, 2017 @ 1:08 pm

    1

    About half of increased traffic congestion is due to population growth since 1970. The rest is due migration from rural to urban areas.

  2. Neal

    April 12, 2017 @ 1:37 pm

    2

    “half of increased traffic congestion” should read “half of population driven increased traffic congestion”. Increased per capita mileage is also at work. I doubt it is fair to “blame” immigrants for more than a quarter of the “problem”; certainly not more than a third. I put blame and problem in quotes because while immigrants do use transportation infrastructure, the ultimate problem is our failure to build adequately which can’t really be blamed on them.

  3. bobbybobbob

    April 12, 2017 @ 3:26 pm

    3

    Most public physical infrastructure in the US is actually a capital furnace and was from the 50s onward, regardless of the scale. Nobody comes close to covering their share of costs of the roads and highways, regardless of income and national origin. The road system mostly just enables people to waste fuel. Road specific taxes and usage fees are practically a gesture. I think the situation is actually even worse in China, despite how everyone likes to talk about their ability to cheaply build roads and train lines. These things consume capital with no return, year after year.

    https://www.strongtowns.org/journal/2017/3/20/failure-to-act-like-professionals

    https://www.strongtowns.org/journal/2017/1/9/the-real-reason-your-city-has-no-money

    The situation is only aggravated by immigration, but we can’t pretend it’s workable in the first place.

    The clearer problem with immigration is the social spending. And also that the long term sustainable population of CONUS is probably about 170 million. These projections of 500 million plus are nonsense. Not gonna happen in a century of declining oil and natural gas and phosphorus.

  4. bobbybobbob

    April 12, 2017 @ 3:36 pm

    4

    This is a good demo of the mess that is “infrastructure”. It’s all tragedy of the commons on a grand scale.

    http://mapstoryblog.thenittygritty.org/costofstreets/

    Guy in Ames, Iowa maps out every block and shows that almost all of the town comes nowhere close to covering infrastructure costs.

  5. Russil Wvong

    April 12, 2017 @ 3:51 pm

    5

    bobbybobbob: That’s really fascinating. I’m amazed that cities like Ames wouldn’t have a long-term infrastructure maintenance plan that’s financially sustainable. Or maybe they do, they just make unrealistic assumptions about continued growth.

  6. Ivan

    April 12, 2017 @ 4:08 pm

    6

    Krugman, “the conscience of a liberal” as he calls himself, claims that “unfortunately, low-skill immigrants don’t pay enough taxes to cover the cost of the benefits they receive. ” and low-skill immigrants threaten to unravel that [social] safety net.

    George Borjas, whom Krugman references in his musings, comes up with a number:


    The higher cost of all the services provided to immigrants and the lower taxes they pay (because they have lower earnings) inevitably implies that on a year-to-year basis immigration creates a fiscal hole of at least $50 billion—a burden that falls on the native population.

    http://www.politico.com/magazine/story/2016/09/trump-clinton-immigration-economy-unemployment-jobs-214216

  7. dean

    April 12, 2017 @ 4:34 pm

    7

    It seems that we have been financing roads sufficiently. Let’s say there is 50 cents/gallon state tax and average driver drives 40 miles per day. Assume that is 1/2 USD per day per vehicle. Let’s say 200 cars are using same road daily, this is a lowballing. We have $100 per day or about $36,000 per 40 mile road. Seems to be enough to cover repairs on this ‘hard’ asset once or twice per year. Should not be more than 100 potholes, $3,600 per pothole seems enough, with enough money to put a way for once per 20 years capital repairs.

  8. superMike

    April 12, 2017 @ 4:48 pm

    8

    Is this another “cost disease” problem? Could it be that roads have gotten expensive because the constituency for keeping them inexpensive has been overpowered by the constituency for making them expensive?

  9. dean

    April 12, 2017 @ 4:56 pm

    9

    * correction: $360 per pothole based on low revenue estimate, seems enough

  10. dean

    April 12, 2017 @ 5:00 pm

    10

    superMike #8: Current work rates for road building and maintenance are based on regulations that were designed by FDR’s ‘Great Deal’. Even with them it seems trivial to raise enough funds for road repair and maintenance and make drivers pay less then what they do now.

  11. Ivan

    April 12, 2017 @ 6:40 pm

    11

    If memory serves right, the US spends about 6M per mile per lane on average vs Germany 12M in USD. Similarly, Germany presumably spends about twice as much on maintenance/repair that leads to autobahns generally higher quality. The average maintenace cost in the US is about 6K per mile per lane (per year ?).

    https://illinoisepi.org/countrysidenonprofit/wp-content/uploads/2013/10/ILEPI-Economic-Commentary-Per-Lane-Mile1.pdf

    On the other hand, per capita road mileage is about 2.5 higher in the US (according to Wikipedia) which makes per capita highway cost about the same in both countries. It may be not quite right, though, given imprecise nature of the relevant data.

  12. Ivan

    April 12, 2017 @ 6:51 pm

    12

    @bobbybobbob

    I am not sure I understand the Ames reference. How’s the road construction/maintenance is paid for there, eventually? The guy seems to imply that there’s a budget deficit. How’s it covered ? I did not see any local bonds issued on their diagram, or anything of this nature. Could you clarify ?

  13. bobbybobbob

    April 12, 2017 @ 9:06 pm

    13

    It’s an accrual accounting vs. cash flow accounting problem. New development has yielded cash, but nobody is properly planning for the end of life maintenance and replacement. Many places have been running a growth ponzi scheme for decades, maintaining older areas with revenue from newly built areas.

  14. suburbanist

    April 13, 2017 @ 8:50 am

    14

    The problem could be addressed with private for-profit tolled highways. High profits would provide incentives to build more highways.

  15. ilya

    April 13, 2017 @ 10:31 am

    15

    Surely the increase of population in Florida is more relevant for the traffic jams then the nationwide statistics? That seems to be from 5 million in 1960 ( https://www.bebr.ufl.edu/sites/default/files/Research%20Reports/FloridaPop2005_0.pdf ) to 20 million now ( https://en.wikipedia.org/wiki/Florida ), so about 4 times.

    How much of that is due to immigration? I don’t know, but the Pew statistics has some nationwide numbers.

    Specifically, the immigraton is responsible “for 55% of the U.S. population increase from 193 million in 1965 to 324 million today.”, that is, it added about 37% to the 193 million living in the US in 1965.

    Is it likely that the the factor of immigration, that adds +37% population nationwide, is the main force for Florida’s approximately +300% increase?

  16. jack crossfire

    April 13, 2017 @ 1:17 pm

    16

    South Fl*rida is all Cuban refugees, so maybe Fidel Castro’s sons should chip in.

  17. Ivan

    April 13, 2017 @ 1:40 pm

    17

    Apparently, in Fl, 36% of the population growth during 2014-2015 was due to immigration from other countries:

    “During the past year, there was a net migration of 202,510 people moving to Florida from other states and a net migration of 129,525 people moving to Florida from other countries”

    http://www.floridatoday.com/story/news/local/2015/12/22/florida-population-tops-20-million-census-report-says/77739200/

  18. dean

    April 13, 2017 @ 1:45 pm

    18

    suburbanist #14:
    Recently a private company acquired state highway where I commute, paying $1 billion USD for 20 years of busy well trafficked highway tolls. The tolls amount about $1 per 8 miles, company (well) maintains the highway and turns nice profit to its foreign investors. It gets not a single penny from any state or federal fuel and vehicle taxes and fees. No changes to transportation department bureaucracy has occurred as a result of this transaction, except our state loosing highway profits for the next 20 years (the complex highway system was a toll road before the sale too). I am sure this could be organized much batter, on either public or private basis. Bringing a few extra people to milk the tolls does not seem as the most cost – efficient way to manage roads built with public funds.

  19. Smartest Woman on the Internet

    April 13, 2017 @ 7:13 pm

    19

    The “Big Dig” was about ten years and $10 B over budget.

    In 2013, the WaPo reported that the perpetual US wars in Iraq and Afghanistan have cost the US well over $4T (including medical care for wounded US military).

    If I recall from my daily commute from twenty years ago, that photo looks like I-95 north between exits 14 and 16, at the northern edge of Miami-Dade County before entering Broward County.

  20. Ivan

    April 14, 2017 @ 7:54 am

    20

    @Smartest Woman on the Internet

    Two weeks ago, I made a mistake of leaving Miami Open at 5pm instead of staying for the night session, and as a result it took me about 4 hours to get to Jupiter with the last 2 hours spent on the stretch between Boca and Jupiter where the express lane disappears, as I recall. In the morning I drove to Key Biscayne in just under two hours.

    Besides, locals drive like lunatics, worse than I’ve ever experienced on the 128 stretch of I-95 here in MA. They surely beat MA drivers in the unpredictability department.

  21. Smartest Woman on the Internet

    April 14, 2017 @ 5:17 pm

    21

    @Ivan: Jupiter is a hidden gem. I’m shocked it’s remained so wonderful for so long. Must have some strong zoning laws and city leaders that want to keep it that way. I’m not much further north. Left S. FL over twenty years ago.

  22. John V

    April 24, 2017 @ 1:44 pm

    22

    I’ve been thinking about this since last week. To be fair, shouldn’t you also apply the same analysis of children of US citizens? And maybe their share would be even higher, due to 16 years of public schooling.

    Possibly you should post a bond before having a child (would $1 million be enough?), and then you would have it returned when their annual income exceeded $90,000 or similar?

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