2008 April 23 Wednesday
Money Flows To Mexico From Illegals In US Decline In Recession

A Washington Post story headline claims the economic downturn in the US is actually increasing the lure of America to Mexicans who can't count on cash flows from unemployed relatives in the United States. But even with the decrease in money flows the absolute amount is still over 5 times the amount sent 10 years ago.

Buoyed by increased migration and lower money-transfer costs, remittances to Mexico peaked last year at just under $24 billion, more than 5 1/2 times the amount sent a decade earlier. Remittances recently vaulted over tourism to become the second-largest source of foreign currency in Mexico, topped only by oil exports.

The point about remittances being topped only by oil exports is important. Mexico's oil production has peaked. Their biggest oil field, Canterell, is heavily depleted and will never produce as much oil per day as it did at its peak.

The money has transformed the landscape of many small towns, paying for new houses and new kitchens, cars and childcare, medical care and clothes. But some economists also say the giant sums sent to Mexico have created a sense of complacency, especially among government officials who have failed to right the country's wobbly economy.

"This is demonstrating that there is an increased dependence on remittances and a great vulnerability for the country," said Rodolfo García Zamora, an economics professor at the University of Zacatecas and one of Mexico's leading authorities on remittances. "Neither the government nor the families who are affected have a good alternative to remittances."

The complacency in the Mexican government is bad news for Americans. Unless we close Mexico's safety valve with a border barrier and immigration law enforcement Mexico's elites aren't going to try to reform Mexico's schools and economy. Oil production in Mexico fell 7.8% in the first quarter 2008 and exports dropped 12.5%. With less money coming in from oil sales Mexicans will feel even more motivated to head north. We need to build a very substantial layered barrier to keep them out.

But the Wall Street Journal reports border crossings are way down due to job cuts in the US.

The number of illegal immigrants apprehended along the U.S.-Mexico border is falling steeply, an indication that the economic downturn and beefed-up security could be deterring unauthorized crossings.

The U.S. Border Patrol said Tuesday that the number of apprehensions dropped 17% to 347,372 between Oct. 1, 2007, and March 31, 2008, from the same period in late 2006 and early 2007.

One academic quoted in the article claims she can spot recessions in the US at least a year in advance due to declines in arrests of border crossers. So it is hard to tell how much of the current decline is due to economic factors versus improved border enforcement and interior enforcement.

Arrests at the U.S.-Mexico border have been falling for more than two years. However, the dramatic drop in the first half of the fiscal year means that the number of apprehensions for the whole year ending Sept. 30 could dwindle to less than the 858,638 in fiscal 2007. That would be roughly half the nearly 1.64 million arrests during fiscal 2000, the peak year. Immigration experts also believe state laws to crack down on employers of illegal immigrants are discouraging attempts.

In Arizona, an employer-sanctions law has made finding work more difficult as companies start using an electronic system to verify worker documents. The state, currently the main gateway into the U.S. for illegal immigrants, has also stepped up enforcement beyond the border.

A big build of a border barrier during this recession could prevent an eventual post-recession surge of border crossers. We ought to take this recession as an opportunity to get ready to stop the next surge of illegal crossings.

Share |      By Randall Parker at 2008 April 23 10:03 PM  Immigration Border Control


Comments
Robert Hume said at April 24, 2008 12:15 PM:

Unfortunately, no matter what Mexico's government does, Mexico will never be at the front of GDP/capita because of the average low IQ of its citizens.

The best hope would be to adopt low-population policies, coupled with very strong border control and try to reach the condition where many citizens would be able to raise high-value food on modernized farms. You don't need to be too smart for that industry if you have a good governmental advisory system. This is probably a 50-year program and is probably beyond the imaginative and non-PC capacity of the Mexican government.

Of course, as the US continues to experience a decline in our average IQ we may reach a tipping point where even the GDP per high-IQ citizen will decline ... although it seems that the euro-Spanish in Mexico live pretty well. But that may be only because they have historically convinced their indigenous folk that there was actually equality.

scottynx said at April 25, 2008 10:49 AM:

But that may be only because they have historically convinced their indigenous folk that there was actually equality.

And convinced them that they were all one "bronze" race. See sailer's "mestizo myth".


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