Immigration: Another Bush Administration Failure
By Michael Orshan and Ricardo Valenzuela
Over the past few months I have interviewed key people around the border of Mexico. Enclosed are our conclusions. The main conclusion is that this is another failure of the Bush Administration and we’ll explain why.
First, where is the problem? In the early 90’s NAFTA started. During the negotiations Mexico did whatever it could to ensure their continued profitability via oil. To do that it was forced to give up something. Mexico gave up on protecting agriculture. Agriculture is a major Mexican industry. What did this do? Well, without protection, without subsidies, the United States agricultural industry overwhelmed the Mexican agricultural industry. This has forced the massive migration we have seen over the past ten years into the United States to work on construction or agricultural jobs. We are talking about a 400% migration growth over less than 20 years. We say that is unusual.
Mexico needs to take equal blame for this problem. The reforms that Mexico needed in order to be competitive in this new scenario, were sabotaged by the politicians hardliners who did not want Mexico be part of the first world, and they wanted to do something to again get control of the country. They decided to do it causing the 1994 devaluation that cost the country over $500B and the whole economy fell in to an abyss causing more unemployment and desperate people.
On top of that issue, there is the issue of Mexico being a developed country rather than a low cost labor country. Mexico graduates more engineers than the United States, yet they are underemployed. Outsourcing to India or China occurs much more than to Mexico, yet Mexico’s labor is just fine, their location is better and in many cases the outsourcing companies have facilities already in Mexico. We suggest that there is a social issue here that will end up hurting the United States in the short term.
Then there is the issue of population. 35% of the United States population is under 25 while 60% of the Mexican population is under 25. Where is our youthful work force today? Non-existent, we simply do not have the hands and feet to grow in any direction, neither manual nor white collar workers. Can we continue to outsource to India and China? Probably not. Already the newly experienced Indian and Chinese workforces are creating competing products. So, the United States need this young Mexican population of loyal and educated people.
When Fox was the Mexican president there were high hopes that the Bush and Fox administrations could address these issues. 9/11 occurred and Mexico had to take a back seat to all the issues that needed resolving at that moment. With his relationship with Bush damaged, Fox decided to play death and let the river run while the problems were getting bigger. Instead of promise, Fox’s tenure lead to revolts as the out of work farmers went to the streets to be heard.
So, where are we now? Well, we are building a wall between neighbors when there are three hour waiting lines for trucks filled with products waiting on both sides of the crossing stations. We are debating whether the immigrants should stay or go. Did you know that if all the illegal immigrants paid taxes it would certainly be more than $1B?
We need the Mexican government start aggressive economic development in Mexico. Remember this government, before Fox, was run by less than 10 families, who still have influence. Even they see the future. Mexico is actually importing oil, and the oil revenue is dwindling as PEMEX has done little R&D. In fact, the largest revenue source for Mexico is the money that the worker’s, legal and illegal, send back to Mexico.
Without assistance from the United States and Canada, it is doubtful whether the Mexican government can create economic development on their own. As we are now seeing, the United States has a reason to lend a hand. What would you rather do? Send more police to the border or open more border crossings because commerce is growing? This is a negotiation process that should have been ongoing during the past 6 years, but was been forgotten. Now we are stuck with making decisions that few really strongly support.
The solution, when all the dust settles, will be the creation of the North American Trade Union. Like Europe, we will need to invest in those underdeveloped nations. The EU spent funds on developing Spain, Portugal and Ireland and the results have been great. Germany, France and Britain now do manufacturing in those countries while they engage in R&D and automated services. As the methods of marketing products and services change, more and more engineering R&D will end up in Spain, Portugal and Ireland. This is okay and a natural progression. The US, Canada and Mexico must begin to look at themselves this way. The United States will need to spend funds on economic development in Mexico or expect to change their standard of living because smarter regions of the world are figuring it out.
Mexicans don’t want to come to the United States, but with no opportunities there they have to. The real solution in the long run is the economic development of Mexico which needs to be growing its GNP in the range of double digits. If that happens, the United States will have no immigration problem. The United States can have an incredibility growing market right now. Mexico, even with facing so many issues, is the #2 trade partner of the United States. We can have a market of 120 million people demanding American products like never before which is going to pale the billion dollars Mexicans spend every year in cities like Tucson, Arizona.
Remember President Salinas’ popular saying during the 90s: “We don’t want aid, we want trade.” That drove the Salinas’ government to build the Mexican miracle in which even young Americans started to immigrate to Mexico. If someone analyzes the economic history of those years, they would learn that Mexico really can create miracles and most of the people want to do it again. But this can only happens again if we all work together building bridges not walls.
That brings me to my final conclusion. As Professor Zolberg noted, “Countries decide on how they want to grow and their immigration policy follows this”. The people of the United States need to understand that the Latin migration to this country is here to stay. The people of the United States need to understand that a stiff immigration policy will retard the economic growth and health of this country. I believe that the debate over immigration is more social than legal or economical. The United States needs to understand our future strengths and weaknesses and ensure a healthy country in the future and that future includes the Latin influence.
Both are principals at
http://www.MARSOUN.com the producer of “Build Bridges not Walls” a series of interviews on influential people focused on economic development along the United States Mexican border.