HARLINGEN, RGV – Deploying National Guard troops on the Texas-Mexico border will result in a loss of hundreds of millions of dollars of business activity and cost thousands of jobs, according to a new study.

The study was undertaken by The Perryman Group of Waco, Texas. Its president, economist M. Ray Perryman, spoke about findings in the study at a border militarization conference hosted by the RGV Equal Voice Network at Harlingen Public Library on Friday.

“The presence of troops has historically impacted shoppers and employees in a variety of sectors, discouraging them from full participation in their normal activities,” Perryman said, in a statement about his group’s new study. “If the deployment increases, feelings of uncertainty about the area’s stability could discourage business investment, tourism, and other desirable economic activity.”

Perryman told the Guardian that there are likely multiple reasons the border economy would be hurt by a sustained presence of National Guard troops on the border. “People being reluctant to short and purchase services in the area is one obvious one, and a lot of the effect was observed in the retail and services sectors. People may also be put off from investing and expanding due to the uncertainty, and the presence of troops can be a detriment to tourism and even make to firms making economic development decisions,” Perryman said.

Economist Ray Perryman (center) was one of five panelists at an RGV Equal Voice Network conference on border militarization.
Economist Ray Perryman (center) was one of five panelists at an RGV Equal Voice Network conference on border militarization.

Gov. Rick Perry announced this summer that he is deploying 1,000 National Guard troops to the South Texas border. The move follows a spike in the number of undocumented immigration of children coming from Guatemala, Honduras and El Salvador. “The Governor is a very good friend of mine. Our families have traveled together. But I call them like I see them,” Perryman told the Equal Voice audience.

The Perryman Group study states” During periods when troops are deployed, economic performance is significantly worse.” The group found that total loses in business activity stemming from this weaker performance include “more than $541.9 million in gross product in the Lower Rio Grande Valley each year as well as 7,830 jobs.” For Texas as a whole – including losses in the Valley – loses were found to be $650 million in annual gross product and 8,680 jobs. These amounts represent approximately 2.5 percent of local activity.

“Half a billion, in gross production and almost 8,000 jobs, those are big numbers,” Perryman said in his remarks. “That is roughly two and a half percent of the local economy,” he said, noting that the Valley economy has been growing at about four percent a year. “If you knock off two and a half percent you have knocked off a big chunk of that,” Perryman said.

Perryman said that in order to measure the economic effects of the current deployment of National Guard troops, his group had to first establish a baseline for comparison. He said this was done by comparing the Valley’s economic performance during two prior deployments – in 2006-08 and 2010. Because of the proximity of the Valley to Mexico and its dependence on border trade, production and commerce, Perryman said, the economic performance was adjusted for fluctuations in the exchange rate between the Mexican Peso and the U.S. Dollar.

“Even after accounting for various external factors, economic performance observed during deployments is significantly worse,” Perryman said, in his statement.

The Perryman Group’s economic simulation assumed a one-year deployment period. If this happened, a loss in total expenditures in the Valley would be $923.9 million, the Perryman Group study found. The loss in gross product would be $541.9 million, the loss in personal income would be $353 million, the loss in retail sales would be $126.2 million, and the loss in employment would be 7,830 jobs.

The report’s conclusion states that if historical patterns hold true, deploying National Guard troops to the U.S.-Mexico border will lead to significant losses in business activity in the Lower Rio Grande Valley. “While border security is an important issue, it should be recognized that economic performance is dampened during times when troops are deployed. Less intrusive and more effective measures are worthy of consideration.”

Perryman concluded his remarks at the conference by saying: “This is a very real economic issue that has real consequences. I appreciate what you (Equal Voice) are doing on the ground to find meaningful solutions. It is a complex issue, we need safe borders. We need public safety. We need human compassion for some of the folks who are in very, very, bad situations right now. There are also very real dollars and cents numbers that need to be taken into account.”

Editor’s Note: This is the first of a two-part series on Dr. Ray Perryman’s speech at the RGV Equal Voice Network conference on border militarization.