The Decline in Immigration from Mexico: What It Means for the United States—Posner

In 2008 there were believed to be 7.03 million unauthorized Mexican immigrants in the United States, and by 2010 that number had fallen to 6.64 million, a drop of 390,000—6.64 percent. (I am dubious that these statistics are accurate, but doubtless there has been a significant decline in illegal Mexican immigration.) There are three possible reasons for the decline: reduction in employment opportunities in the United States, as a consequence of the severe economic downturn, involving heavy unemployment, that began with the financial crisis of September 2008; increased efforts at border control and apprehension of illegal immigrants to prevent unauthorized immigration, especially from Mexico (which is believed to be the source of nearly 60 percent of all illegal immigration to the United States); and improved employment opportunities in Mexico. The first two factors are probably the most important—especially the first. Many unauthorized Mexican immigrants were employed in the construction industry, and the economic downturn caused a tremendous surge of unemployment in that industry—a layoff of something like 600,000 construction workers, in all. But the second factor has a played a role. There has been toughened border enforcement, which has pushed up smugglers’ fees, which are paid for by the unauthorized immigrants; and so an increase in those fees discourages immigration. 

I attach less weight to the third factor—Mexico’s improved economic situation—because the improvement of the Mexican economy has been a gradual process, beginning in the 1990s. Mexico’s per capita GDP is still a third lower than that of the United States. Approximately 18 percent of Mexicans live in extreme povery, and another 47 percent in less extreme poverty, so that a total of 65 percent of the Mexican population is poor. And Mexico has a total population of 113 million. So there is an enormous pool of potential immigrants to the United States, where wages are much higher than in Mexico. 

The growing hostility to Mexican immigrants (and to immigrants in general) is understandable, though ill informed. It mainly results from the belief that immigrants “take away” jobs from Americans; a more precise formulation would be that an increase in the supply of labor, if more than proportionte to an increase in demand, will push down wages; and American workers who refuse to accept a reduction in their wages will lose their jobs to immigrants. In addition, immigrants place pressure on U.S. public services, such as public schools and emergency rooms, though unlawful immigrants are not entitled to Medicare or social security, or to many other public benefits. 

Unemployment in the United States is very high, and rising, but it is doubtful that restricting immigration would have a positive effect. Immigrant workers spend much of their income in the United States (some of it, however, they remit to relatives in their country of origin), and so increase demand for goods and services, and indirectly employment; and by reducing wage levels they reduce the cost of goods and services, a reduction that also stimulates consumption and hence production and employment, although the net effect on the economy must be small—there are not that many illegal Mexican immigrants. Weakness in consumption is a major factor in the nation’s current economic weakness, however, and there is no good reason to weaken it further by expelling or preventing entry of worker-consumers. And efforts to curtail illegal immigration are costly, without doing much for employment. Probably, therefore, restricting immigration is not a sensible policy from the standpoint of stimulating the U.S. economy. A better policy would be to increase the lawful Mexican immigration quota, since lawful immigrants are likely to be more productive workers with better educational backgrounds and to place less strain on U.S. public services.

Comments

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Unemployment in the United States is very high, and rising, but it is doubtful that restricting immigration would have a positive effect.

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