Mexico's One-Way Remedy

The New York Times
July 18, 2000

By George J. Borjas

CAMBRIDGE, Mass. -- President-elect Vicente Fox of Mexico has wasted no time initiating a much-needed dialogue over U.S.-Mexican immigration issues. More than seven million Mexican immigrants now live in the United States, a number equal to 7 percent of Mexico's current population. And we get an additional 130,000 legal Mexican immigrants and 150,000 illegal ones annually. What Mr. Fox wants to do, however, is radical.

He proposes that the United States immediately provide 250,000 visas a year to Mexican nationals, accommodating much of the desire to move here, and that within 10 years, our countries share an open border, with free movement of people and goods.

This would be good for the Mexican economy, reducing labor market pressures, and pleasing to many Mexican immigrants in the United States, who maintain an interest in Mexican politics and are increasingly powerful there.

But it would be far less likely to benefit the United States.

The U.S.-Mexico wage gap is among the largest between contiguous countries. A manufacturing worker in the United States earns four times the salary of a Mexican factory worker and 30 times that of a Mexican agricultural worker. These differences ensure that an open border would increase the number of immigrants.

No one knows how many more people would immigrate, but the Puerto Rican experience may be instructive. Puerto Ricans are American citizens who can move freely within the United States, and the differences in economic opportunities between Puerto Rico and the mainland are quite large. Not surprisingly, about 25 percent of Puerto Rico's population moved to the United States in the last 50 years. Even if the Mexican migration response were only half that of Puerto Rico, total Mexican immigration to the United States could conceivably be 12.5 million, compared with the current 7 million.

The new immigrants would probably resemble the Mexican immigrants already here, whose poverty rate exceeds 33 percent.

Research that I conducted with my Harvard colleagues Richard Freeman and Larry Katz showed that the large-scale immigration of low-skill workers during the 1980's and 1990's, by increasing the pool of low-skill workers, reduced the relative wage of native workers with less than a high school education by 5 percentage points. This group's wages would be further eroded under Mr. Fox's proposals.

Some may say that Mexican immigrants take jobs that Americans do not want, but a more sensible statement is that Mexican immigrants take jobs that Americans do not want at the going wage. The service sector remains alive and well even in those parts of the country that have not been penetrated by heavy immigration. It just costs more to have a manicured lawn in New England than in Southern California.

Almost 30 percent of the immigrants now living in this country are of Mexican origin. (In 1920, after decades of heavy immigration, the three largest groups -- Germans, Italians, and Russians -- together made up only a third.) Numbers like these slow assimilation because a large immigrant group can maintain its separate identity, culture and language far into the future. It is unfashionable to view the melting pot as desirable, but is balkanization good for the United States?

The free movement of people is not the same thing as the free movement of goods.

And, as we will surely relearn in the next economic downturn, the United States offers public services that are far more expensive to maintain when there are many immigrants who are poor and have low job skills.

The United States should begin to reflect more seriously on its huge income disparity with Mexico, and the onset of democracy there suggests that it may be time to think about a Marshall Plan-style program to introduce permanent prosperity.

But enacting Vicente Fox's proposals now would limit the economic opportunities available to America's less advantaged and would cause a higher level of immigration than the United States could comfortably sustain.

George J. Borjas, a professor of public policy at Harvard's Kennedy School of Government, is author of ``Heaven's Door: Immigration Policy and the American Economy.''