50 million Americans are missing (in 2050)

One of the big mysteries is why the housing market crashed after 2006.  The later part of the crash (2008-12) was obviously partly due to the Great Recession.  But what about 2006-08?  I’ve occasionally argued that a decline in expected immigration may have played a role.  Here are some census estimates of the US population in 2050, first made in 2008, and then in 2012:

That’s a striking decline in just 4 years.  More recently, the Census Bureau has further reduced their 2050 estimate, to 388 million.  (Current population is 328 million.)  And while part of the explanation is falling birth rates, immigration seems to be the main story:

A comparison of the bureau’s 2008 and 2012 projections for the year 2050 indicates that most of the 39.2 million gap in the total population forecast is due to scaled-back assumptions about the level of new immigration to the U.S. But another notable factor in the lowered population projection was that the bureau also lowered its forecasts for birth levels.

Ignoring the amnesty bulge in 1990-92, US immigration levels peaked in 2006, at over 1.26 million per year (close to the earlier 1907 peak).  At this time, there was also a high level of illegal immigration, including Mexican workers drawn in by the housing boom.  Total immigration might well have been close to 2 million per year.  It looked like immigration was about to push America’s population much higher.

All that changed after 2006.  Bush’s push for immigration reform (which would have boosted immigration levels) failed in Congress.  Border security was tightened and the net level of illegal immigration from Mexico slowed to almost zero. Not just due to tighter border security, but also a weaker economy in the US and relatively better prospects in Mexico. (Also lower Mexican birth rates.)  Now net immigration is probably closer to 1 million/year, although it’s hard to be certain.

The massive wave of expected immigrants was disproportionately pouring into the “sand states”, such as southern California, Nevada, Arizona, Texas, and Florida.  With the exception of Texas (which never had a house price “bubble”) those areas were the epicenter of the housing crash.  I am not saying that the immigration slowdown was the only factor. I’ve already mentioned the recession, and tighter lending standards also played a role.  Maybe there really was a bubble. But I don’t see how such a massive drop in expected population growth could not have played a significant role, especially in the states that were expected to receive those immigrants.

Over at Econlog I have a related post.  It punctures two myths:

1.   The myth that immigration is making America more diverse. (We’re going to stay about 75% “white”).

2.  The myth that immigration is reducing the share of Americans who vote Republican.

Check it out.

PS.  I’m not sure why I didn’t know this, but it’s really quite interesting:

The Immigration Act of 1924, or Johnson–Reed Act, including the National Origins Act, and Asian Exclusion Act (Pub.L. 68–139, 43 Stat.153, enacted May 26, 1924), was a United States federal law that set quotas on the number of immigrants from certain countries while providing funding and an enforcement mechanism to carry out the longstanding (but hitherto unenforced) ban on other non-white immigrants. The law was primarily aimed at further decreasing immigration of Southern Europeans, countries with Roman Catholic majorities, Eastern Europeans, Arabs, and Jews.^[1][2][3][4] The law affirmed the longstanding ban on the immigration of other non-white persons, with the exception of black African immigrants (who had long been exempt from the ban). Thus, virtually all Asians were forbidden from immigrating to America under the Act (subsequent court rulings would determine that Indians were not white and could not immigrate).^{[citation needed]}

Contrary to popular belief, Latin Americans were not prohibited or limited from immigrating under the law. In most states and under federal law, persons of mixed white and Native American ancestry were considered white; this principle was interpreted under the Act to allow Latin Americans to immigrate as “white persons.” Moreover, unlike Eastern and Southern Europe, no nationality-based quotas were placed on Latin American immigrants. Thus, the law allowed unlimited Latin American immigration, just as it allowed unlimited northwestern European immigration. Ironically, the 1965 immigration law that replaced the 1924 Act, though abolishing racial preferences and national quotas, would effectively place greater restriction on Latin American immigration.

So the racist immigration bill of 1924 (I’m not being sarcastic, it was racist, as people defined “race” at the time) favored blacks and Hispanics over Eastern and Southern Europeans?  Can someone confirm the accuracy of this Wikipedia post?  This means the 1965 bill did not have the effect that everyone seems to think it had, as the immigration surge after 1965 was mostly from Latin America (until recently). And what about when Eisenhower expelled illegal Mexican workers?

PPS.  Below I have a graph of immigration up to 2006, when it seemed to be exploding (mentally block out the 1991 spike to see the trend), and then another showing immigration up to 2016. (2017 data, not shown, showed a slight slowdown from 2016):

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