Does a Day Make a Difference?

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The mass demonstrations that drew some half million immigrants and their supporters to the streets of Los Angeles last week had a symbolic impact perhaps not equaled since the days of Vietnam War protests.


Less certain was the economic effect.


Many of the organizers of the two May 1 marches had a stated goal of crippling the economy in Los Angeles and elsewhere as a way of highlighting the important role of immigrants legal and otherwise in the region. But it’s far from clear that was achieved.


Indeed, many restaurants, warehouses, small shops and other businesses closed their doors; goods movements practically halted at the ports; and strawberries and other fruits and vegetables went unpicked in fields across the state.


But economists said the actual, short-term dollar impact was likely small, if it even could be measured though there’s an argument that the long-term effects could be substantial if it results in a stronger union movement that drives up wages and benefits.


“I think the focus is misplaced. I think the real economic impact is the added confidence it gives to immigrant workers in Los Angeles,” said Goetz Wolff, a professor of regional economic development in UCLA’s Department of Urban Planning. “Mindless quantification does not take into account social networking. Think about the Vietnam War; we counted all those dead bodies but lost the war.”


Even so, preliminary economic estimates last week by the Los Angeles County Economic Development Corp. placed the economic impact at about $55 million in lost wages and production, as well as a multiplier that took into account lower purchasing and other losses by businesses.


That figure may rise to $100 million when all the data has been gathered, but still those losses have to be measured against the size of the county’s economy. The most populous in the country, Los Angeles County generates some $1.2 billion each day in economic output, which would make it the 16th largest economy in the world if it were its own country.


“Basically you had a significant business interruption, but put it into the perspective that the county is a $1.2 billion a day affair,” said Jack Kyser, a senior economist with the development corporation. “You can characterize it as a hiccup, and I think probably a lot of the impacts were ironically felt by the Latino community.”



Displaced activity


One of the key reasons that the economic impact was so small was that it was planned in advance, allowing participants and others to prepare for the shut down.


For example, while some 90 percent of short haul, independent truckers did not show up for work at the ports of Los Angeles and Long Beach, port officials said the shipping complex had recovered by the end of the week.


Part of the quick recovery: some extra shipping was done on Sunday in anticipation of the boycott, and then additional shipping was done in the days following the Monday demonstrations.


“Ultimately, the trucker boycott on Monday was akin to a national holiday cargo was delayed, but no real economic impact, and it took the terminals about a day to recover,” said Theresa Adams-Lopez, spokeswoman for the Port of Los Angeles.


Esmael Adibi, director of Chapman University’s Anderson Center for Economic Research and an expert on the Southern California economy, said the difficulty in measuring the impact of any boycott is that it’s hard to determine what economic activity is truly lost.


While wages might be truly foregone (though they can be made up in overtime in some cases), consumption and production losses are far harder to measure.


“It’s basically a delay in spending, or something that was already spent. And sure it did have some impact on production, but we don’t believe it has been very significant. You could make that up quickly the day after,” said Adibi, who agreed with Kyser the overall losses were relatively minimal.


However, union organizers were counting on the marches as way of politically energizing the immigrant community in response to legislation on Capitol Hill that would make illegal immigration a felony.


Wolff said the mass demonstrations would also have a spillover effect of energizing the area’s unions, which under U.S. law can organize workers even if their immigration status is undocumented.


“Workers are treated as workers first, whether they are documented or not is second,” Wolff said. “We really need to step back and not be overly preoccupied on how much money was lost.”


Wolff added that increases in wages and benefits would add overall dollars to the economy, since national and international firms, who make a share of their profits outside of Los Angeles, employ many immigrant workers.

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