The Right To Move

A few days ago, Mexican President Felipe Calderon made a remarkable statement. He essentially demanded that the United States change its immigration policy so that it respected a person's "right to work wherever one can make the greatest contribution.”

Some of these words will ring familiar to economists. It is, after all, a standard classroom exercise in labor economics to show that world income would be maximized if people can freely move to "wherever one can make the greatest contribution." President Calderon simply invented a new "right" to justify this type of migration.

One could easily argue about why it is that only those who want to migrate have "rights." After all, maybe those who are in the receiving areas also have rights to decide what the receiving area should be like.

But let me instead address another thorny detail. I suspect President Calderon is listening to his economics staff a tad too much--and they are being a bit disingenous. It is obvious that most governments, including Mexico's, enact lots of policies that work directly against the goal of maximizing a country's national income--in other words, they enact policies that explicitly prevent persons from working where they can make the largest contribution. Just consider minimum wage legislation. An inevitable outcome of setting a high minimum wage is that some workers who could have worked at a lower wage are no longer employable. So instead of making a contribution valued at, say, $5 an hour, they now make a contribution of exactly zero dollars to economic output.

In short, because of various considerations, governments actively choose to prevent workers from making economic exchanges where they would be most productive. And this happens all the time; countless policies describe which types of potential trades are allowable and which types are not. And the "various considerations" used to justify these restrictions can be social, political, or distributional.

Immigration policy is no different. Although the maximization of the size of the economic pie seems like a worthy goal, it is by no means the only goal in life. And that is the point that President Calderon conveniently forgot to mention in his lecture.

Comments

[secret asian man]

Somehow I doubt that Calderon will support the right of Americans to move down to Mexico, get jobs, and buy property on the beach.

[Peter Schaeffer]

Perhaps Calderon could demonstrate his sincerity by legalizing migration from Central America and removing the guards along his southern border. Better yet, he could open Mexico to immigration from the really poor nations of Asia and Africa. After the "right to move" should never be infringed. Mexico is a middle income nation and billions of people would benefit from the opportunity to work in Mexico.

[Dawson Lemus]

Hi! I've been reading, and enjoying, your blog for a long time now, and today I felt compelled to comment. I'm a Mexican-American (My mom is Mexican, my dad American) who has lived in both Mexico and USA. I just wanted to tell you the mininum wage in Mexico is about 5 US dollars A DAY. It is way below the market equilibrium, so really few earn that. I agree with your reasoning, but I thought this was an interesting fact. (By the way, there's almost no immigration patrolling in the south border of Mexico, and most of it is focused on preventing drugs, not people, from entering the country.)

[Peter Schaeffer]

A moderately long, quite serious article about abuses along Mexico’s southern border can be found at “Mexico's Forgotten Southern Border Does Mexico practice at home what it preaches abroad?” (http://www.cis.org/articles/2002/back702.html).

A knowledgeable American living (legally) in Mexico has also written about this. See “More Hypocrisy: How Mexico Handles Its Own Illegal Immigration” (http://www.vdare.com/awall/060518_memo.htm). The article has quite a bit of useful information. However, the following quote caught my eye.

“"Undocumented Central American migrants complain much more about how they are treated by Mexican officials than about authorities on the U.S. side of the border, where migrants may resent being caught but often praise the professionalism of the agents scouring the desert for their trail." [Few Protections for Migrants to Mexico, AP April 19th, 2006]”

[yave begnet]

I lived in Argentina shortly after the recent economic crisis, and the Bolivians collecting scraps of metal and cardboard from the streets of Buenos Aires to sell outside the city were widely denigrated. Most countries are probably more punitive towards their immigrants than the U.S. is towards theirs. Likewise, racism, in my experience, is a greater problem outside the U.S. than in it. Sometimes it is good to be the outlier that convinces others to change.

[PaulK]

secret asian man,
President Calderon actually does support Americans moving to Mexico legally, getting jobs and buying property on the beach - especially ones like me who create jobs for Mexicans in Mexico through tourism development, thus providing a way for Mexicans to earn a living at home. It is pretty easy for an American to get a work visa in Mexico and to buy beachfront property through a bank trust or fee simple through a Mexican company (wholly owned by American shareholders). The economies of the Mexican/U.S. border states are so intertwined that no two economists could absolutely agree on the proper solution at this point (fences, guest worker programs or otherwise). That's why the border states have the annual Border Governor's Conference every year where Calderon made these remarks (and I was fortunate to be able to attend). The states are trying to work it out themselves while the U.S. figures out its immigration policies. Unfortunately, the states don't really have the power to make changes on the macro level. So they implement stopgap measures.

And yes, I agree Mexico really needs to do its part through continued work on job creation in Mexico (hey, I'm trying to help Calderon out). We actually have a labor shortage in the town I work in (Puerto Penasco, Mexico), so the builders all bring in Mexicans from the poor southern states (Chiapas, Oaxaca, etc.) and they live in bodegas on the construction site and send most of their paycheck home. So the northwards migration continues and money flows south, with the American consumer purchasing condominiums in Puerto Penasco or hiring a Mexican electrician in Phoenix being at the top of the tree.

[Gary]

The professor may be right, that Calderon is focusing a bit too much on the economic aspect only. But that is exactly what our governing class does as well. Too much of the time, both Democrats and Republicans act as if the United States is nothing more than a generic infrastructure that was set up to facilitate economic activity that can then be taxed to generate revenue for the ruling class to redistribute to favored constituent groups. There seems to be little or no appreciation that history, culture, traditions, language, literature, and attitudes are actually important building blocks that form the basis of a society.

[Robert Hume]

Paul K, What about Peter Schaeffer's argument. Should Calderone throw open Mexico's doors to Africa, India, China, etc.? What would happen to Mexico's culture? Would it matter?

[PaulK]

That's a good question Robert. I think if Mexico didn't have half of its country living in abject poverty (i.e., very cheap labor), you could make an argument that they should open their borders (as the U.S. has ostensibly done for Mexicans). But just because Mexico is a "middle income nation" doesn't mean it is in a position to support this type of immigration from places like Peter mentioned. In the U.S., businesses want immigrants because they work hard and work for less money and the business may be able to delay closing the factory and moving it into Mexico for awhile. Hence, few laws punishing employers for employing undocumented immigrants. In Mexico, no one needs immigration because there is so much cheap labor already. So policy makers (i.e., the rich business owners who run Mexico) have no incentive to open borders. Mexico is slowly building a new middle class through the increasing availability of consumer credit. I say give them some time to work to become a first world nation before we start complaining about their border policies.

Anyway, I'm sure the U.S. is happy that Mexico tries to keep the Guatemalans out, because the Guatemalans are often on their way to the U.S.

As for culture, the large cities in Mexico are already inundated with plenty of outside cultures (lots of U.S. culture) and influences (Wal-Mart, Burger King, Ford and Nissan cars, European banks, U.S. law firms, etc.), as are tourist cities (which are multiplying rapidly). You do see some reports in Mexico about Mexicans being resistant to this outside culture, but everyone I know so far in Mexico loves American stuff. Just not our immigration policies. Mexico City itself is a melting pot of may different cultures and in northern Mexico, you will even see a large Chinese influence from legacy Chinese immigration during the railroad building days. Much more homogenous than the U.S., but still on its way to becoming more globalized. Many of the Mexican professionals I know went to Harvard or London School of Economics, have traveled the world and often go shopping in Scottsdale, AZ on weekends. Our cultures and economies have become intertwined since NAFTA.

[Peter Schaeffer]

"In Mexico, no one needs immigration because there is so much cheap labor already"

Mexico's wages are considerably higher than its neighbors (much less Africa and Asia), hence illegal immigration along its southern border. However, the real point is that billions of people live in countries poorer than Mexico. They would be vastly better off if they were allowed to migrate to Mexico. How selfish of Mexico to deny them this fundamental “right”.

However, the really funny part is that Mexican landowners regularly complain that “Mexican workers are lazy… They won’t work in the fields… These are jobs Mexicans won’t do… You can't depend on Mexicans... They don't work hard… they're irresponsible…”

See “Don't try sneaking north across Mexico's other border” (http://www.msnbc.msn.com/id/13006798/site/newsweek/)

In fact, the many of the illegals in Mexico are working in the poorest parts of country with the lowest wages.

Sound familiar?

[Craig]

"Too much of the time, both Democrats and Republicans act as if the United States is nothing more than a generic infrastructure that was set up to facilitate economic activity..." - Gary

Very well put, Gary.

One thing I would say about the minimum wage is that I used to be strongly against the minimum wage. The free marketers had me convniced that a minimum wage is bad for everyone. But in their rush to open borders, they've lost me because of the obvious contradiction in their arguments.

First, they say that our economy is creating "so many jobs" that we need immigrants to fill them. Then they turn around and argue that we shouldn't raise the minimum wage because it would harm job creation. See the contradiction here? If the economy is creating more jobs than we have workers, then why would it matter if job creation was slowed?

So, unable to end the support of our corrupt politicians and judges for open borders, I have chosen the next best solution: raise the minimum wage and slow job growth. The downside there is that Americans may lose jobs while immigrants keep theirs. Ideally we would have greatly reduced immigration and no minimum wage, so that highly unskilled people could market their labor without unnatural competition from immigrants, but that option has been denied to us.

[PaulK]

Peter,
I won't claim to know the situation on the ground in southern Mexico (I have never been there). My statement about Mexico not needing immigration stems from an estimated 40 million Mexicans just trying to scratch by to feed their family and put a shelter over their heads. It is hard for me to believe that so many workers in southern Mexico act lazy or won't work hard when he or she and family has little or nothing to eat. So to say that 40 million Mexicans are lazy, won't work, etc. so Mexico should let in the Guatemalans, Africans, Asians, etc. is really perpetuating a negative stereotype that Americans have about Mexicans (they're all lazy!). The Mexicans that come to Puerto Penasco (where I work) make $15-$20 per day and put in 10-12 hours a day in 105 degree heat. They know if they dont' work hard, they will get sent home and someone else will be brought up to replace them.

The situation in the U.S. is a little different because many of the Mexicans coming into the country don't displace American jobs - they create new jobs (e.g., many people in the southwest U.S. can afford a gardener and housekeeper, while in the northeast U.S., fewer exist so it isn't so cheap). And the Americans who may lose their job due to immigrant labor are at least trained and generally able to get another job (albeit a lower paying one or one without benefits, etc.). The American having to downgrade their job and losing benefits may have to give up the late model truck and move into a small house and not eat so much, but they will be nowhere nearly as bad off as the Mexican losing their $5/day job to a Guatemalan willing to work for $3.50/day.

I'm not saying I think the U.S. should open up its borders - the U.S. needs to protect the interests of its people. And I do agree that the Mexican government is speaking out of both sides of its mouth on this issue, but in my mind the situation is a little different in Mexico, where they are just trying to eat and the U.S., where they are trying to maintain the typical American lifestyle. The need for Mexico to protect its workers to keep them from starving may be a little more urgent than the need for the U.S. to protect its workers.

[Peter Schaeffer]

There may well be 40 million poor Mexicans. However, they are probably far better off than billions of people in Africa and Asia who would benefit from jobs in Mexico. Of course, immigration into Mexico need not be a zero sum game. Adding tens of millions of foreign workers will expand the supply of labor in Mexico and enable Mexico’s economy to grow (much) faster. After all, that argument is endlessly used to justify immigration into the United States and Europe (I am personally skeptical).

For the record, I was not criticizing workers in any part of Mexico, including the south. I was quoting Mexican employers who sound suspiciously like American employers and who behave in ways that are remarkably similar.

Too some extent, Mexican workers expand the market for housekeepers and lawn care. However, our host has repeatedly pointed out that “the grass gets cut and food gets served” even in areas that don’t have large scale immigration. Indeed, the Pew Hispanic Center has shown that even in agriculture, the vast majority of workers (75%) are legal.

The fact that both American and Mexican workers are both being hurt by immigration justifies neither outcome. Both countries should implement better border control.

However, let me add one more comment. Mexicans aren’t hungry. Obesity and diabetes are rising very rapidly in Mexico for the same reasons we have these problems in the US (plus apparent genetic factors that are specific to Mexico). By contrast, many of the billions who could benefit from immigration to Mexico really are less well nourished.

See “Sins of the fleshy Mexico now enjoys two important characteristics of rich countries. Unfortunately, they are obesity and diabetes” (http://www.economist.com/displaystory.cfm?story_id=3507918). I would argue that to some extent, Mexican obesity is an unwanted American import… And one that Mexico should send home.

[D Flinchum]

"our host has repeatedly pointed out that “the grass gets cut and food gets served” even in areas that don’t have large scale immigration"

Indeed they do and so does meat-packing and construction.

In 2003 we had a house built in SW VA. It was built entirely by US citizens, many of whom could trace their roots in SW VA to before the Civil War. Furthermore, our builder, with our knowledge and support, gave low level jobs to young men who had been in a little "trouble" - which generally meant DUI or drugs - in order help them get back into normal lives.

Right after we moved in, the plumber had to come in and make an adjustment that necessitated cutting a hole in the mudroom ceiling. He left the room as good as new. I commented on his great job and he explained that he had started at the bottom and learned construction from the ground up. He now owns his own business and does a lot of water testing on wells outside of town limits.

Not everybody in the US can do college work and many who can just don't want to. Where are the young US citizens who would love jobs in the building trades? We have 'em here but in Northern VA they are nowhere to be seen because illegal aliens are cheaper and less likely to insist on safety measures. SW VA has an African-American population of only about 4% but I'll bet I saw more young black men working construction over at VT the first 2 or 3 years that I lived in Blacksburg than I saw in the last 5 years I lived in Northern VA.

It all comes down to what kind of country you want to live in: one where a young person can still live a decent middle-class life and afford a family or one similar to a feudal system with the rich and the rest, which is where we seem headed.

It's no accident that traditional marriage and family formation are declining among lower middle/working class young people. The jobs that enabled these young men to marry and support a family are going to cheap foreign labor, both abroad (manufacturing) and in the US (service).