Monday, May 08, 2006

Mexican prosperity to bring more immigrants, not less

Open border advocates like to deflect criticism directed at Latin America from restrictionists by stating that we need to help those to the south by ensuring that these countries are prosperous with lots of economic growth. One wonders how taking millions of "hard workers" from these countries each year is aiding that goal. And one should also wonder whether a wealthier Latin America attenuates or augments the flow of workers into the US:
For years, economists and politicians have said the solution to surging emigration is prosperity at home. If Mexico and other Latin American nations that send millions of migrants to the U.S. could grow fast enough, the theory goes, their residents wouldn't head north for work...

Now the theory looks wrong -- or at least simplistic. Emigration often surges along with economic development. In an expanding economy, would-be migrants gain the skills at home that pay better abroad. They also are better able to save the relatively modest sums -- $200 for a cut-rate airline ticket; $1,000 or so for a reliable border-crossing guide -- that workers looking to enter a better labor market need to take their skills north.

The theory propagated, true to its Marxist form, is missing the crucial element of cultural, in addition to being incomplete (the migration curve is not linear, it's S-shaped). As the US increasingly resembles Latin America, the wage premium required to entice migrants to head north will decline. The pressure to assimilate, having been under siege for forty years, is moribund in the Southwest. Instead, the white middle class, unable to assimilate to the border states' level of Hispanicization, is heading into America's interior. Meanwhile, growth in the sending countries make it easier for aliens to get into the US.

It's easy to comprehend why a small premium is necessary to get low-skilled laborers to come to Los Angeles. If you lived in the rust belt and made $20,000 a year, would you move to Chicago for $100,000 a year, free education, and free healthcare? What if, having arrived, your child would enable you to bring your extended family in as well? If your rust belt wages rose to $25,000 annually, would that dissuade you from Chicago? Likely the only thing to stop you would be physical barriers keeping you out or the fear that after arriving you'd be forcibly repatriated. Your decision might be effected, however, if the destination was Osaka instead of Chicago. Well, four in ten Mexicans--about 41 million people--see the US as Chicago, not Osaka:
Meanwhile, separate PHC surveys conducted in Mexico show that about four of every ten adults in the Mexican population say they would migrate to the United States if they had the means and opportunity and that two of every ten are inclined to live and work here without legal authorization. The willingness to migrate, even illegally, is evident in all sectors of Mexican society including the middle class and the well-educated as well as those who are poor and who only completed low-levels of schooling.
Make the US a Mexico with higher wages and more handouts, and unsurprisingly much of Mexico will want to come to the US. With a PPP of $10,100, Mexico is one of the wealthiest countries in Latin America. So it's likely that the proportion of the populations in other Latin American countries wanting to come to the US is even higher than in Mexico. Thankfully, Mexico's border with Guatemala is less porous than the Mexican-US border, making it more difficult to get from Central America to Mexico than from Mexico into the US!

When will the free flow stop? Only when equilibrium is reached:
Call it the Development Paradox. The more conditions in "sender" countries improve, the more emigrants those countries will send, at least until living standards in sending and receiving countries achieve rough parity.
That's a long way off, even if we fallaciously ignore differences in IQ. The most conceivable process toward equilibrium is not a progression of the standard of living in poorer countries, but a regression in wealthier ones. Who wants equilibrium? Do we want an average IQ of 90? A life expectancy of 64 years? A literacy rate of 82%? A per capita purchasing power under $10,000? We do better in all these categories. Why regress toward them?


No comments: