Then and Now: The Pull of Immigration
December 25, 2014
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Circa 1976-77, my parents bought their old beater home in Boyle Heights, Los Angeles. It had 3.5 bedrooms, garage and large back yard overlooking the 10 Freeway near the corner of Marengo and Evergreen streets. They paid $50,000 and could afford the mortgage on a combined income of approximately $375 per week. They had six children. Basic health care at the local clinic was available and we had General Hospital for minor emergencies that my parents could afford to pay. Elementary schools were good in those days too. We had enough to eat. It was a modest way of life but we had a chance to chase the American Dream. Thanks to affordable higher education at local city colleges and the California State University system, we caught it.
It is tricky to get purchasing power parity PPP comparisons of income then and now because of the big shifts in relative prices. In today’s dollars estimates of my parents’ weekly $375 in 1977 range from $1140 to as much as $3,010. Compare this to bare subsistence living in Mexico’s countryside as that country marched towards its economic catastrophe of the 1980s. Prior to the 1990s the borders were loosely monitored. During the 60s and 70s my dad crossed back and forth many times, and was chased out of the US seven times.
The pull factors from differences in relative wages were massive in the late 1970s, taking into account the relative ease of crossing the border. Today the pull factors are not as strong because, according to economists, technology and, to a lesser extent, globalization. In other words, the working classes today are in PPP terms significantly worse off.
The American dream is dying.