The disparity between job growth in America and in other countries has contributed to the recent influx of migrants into the United States, such that between 10 and 12 million illegal aliens now reside in the United States. According to a Pew Hispanic Center study and the U.S. Census Bureau, more than half are from Mexico.

Success in reducing this tide requires better border security, workplace enforcement, a practical guest-worker process to match prospective workers with legitimate employment, and encouragement for labor-exporting nations to reform their laws and economies to provide avenues of social mobility now absent in their societies.

In Mexico's case, the good news is that sound fiscal policies, the North American Free Trade Agreement (NAFTA), and institutional reforms have kept lots of workers at home. The bad news is that job growth has not been fast enough to keep pace with new entrants into the labor force.

Mexico's Interior Secretary Carlos Abascal Carranza visited Washington recently with a progress report. That alone is a welcome change from what Americans have heard for the last five years from President Vicente Fox—that Mexico should have the right to export its surplus workers to the United States.

In an increasingly interdependent world, with internal problems having external consequences, it should come as no shock that the U.S. has a strong interest in Mexico's economic policies and performance.

Fox's first Foreign Secretary pushed that absurd message without regard to America's sovereignty or Americans' sensitivities. No country exists to take on the problems of others. On the other hand, all nations dwell in an increasingly interdependent world, and internal problems can have consequences that extend across borders. So it should come as no shock that the U.S. has a strong interest in Mexico's economic policies and performance.

Speaking at The Heritage Foundation on March 23, Secretary Abascal reported that Mexico's economy has, in fact, grown stronger under President Fox and poverty levels are dropping. (Click here to view Secretary Abascal's PowerPoint presentation.) For instance, from 2000 to 2005:

• Mexico's annual inflation declined by two-thirds;
• The public deficit dropped to zero;
• Foreign investment grew 74 percent.
• Mexico's non-oil exports increased 60 percent over the last decade;
• Tourism is up 40 percent;
• Investment in roads and highways has grown 144 percent since the last administration;
• Six million scholarships now help keep poor children in class through high school;
• Real wages rose 7 percent;
• Nearly 577,000 new jobs were created; and
• The number of Mexicans living under one poverty index dropped 23 percent.
• Next item on list

Still, nearly a million youths enter the Mexican labor force each year. A half million new jobs per year are simply not enough. Mexico's minimum wage is US$4.50 per day, far below the minimum US$5.15 per hour stateside. While more Mexican children are attending school, the system is still heavily centralized under an inefficient national ministry and subject to nationwide strikes. Rural facilities and attendance are poor.

Other net labor exporters in our hemisphere are worse off. Guatemala and Honduras report poverty rates close to 75 percent. In South America's Andean ridge—from Venezuela to Bolivia—the poor constitute more than half of the population. Except in Colombia, a developing trend is to consolidate power within plenipotentiary presidencies, ignore the rule of law, over-regulate small business, and let the state to set prices and salaries.

Not surprisingly, Ecuadorians are showing up in shipping containers in Costa Rica while Peruvians are choosing the United States as a base for new businesses. One of Venezuela's most popular websites continues to be www.MeQuieroIr.com ("I Want to Leave").

Migration is a hot topic in Washington, with Congress debating whether to tighten border security, which some consider the silver bullet solution to curbing flows, and whether it should be easier for temporary workers to obtain legal employment through labor and visa reforms.

To ease the tide of unauthorized migrants, U.S. foreign policy must seek to balance the equation.

While these two approaches are necessary, they are not enough to slow economic migrants. In daily relations, public diplomacy, and development policies toward Latin America, the U.S. government must do a better job of urging hemispheric neighbors to liberalize economies, untangle and cut burdensome business regulations, and ensure equal treatment of all citizens under the law to spread prosperity more broadly.

Mexico has already gone partway under Fox, but it must continue these efforts to account for the needs of its expanding population. Candidates running for the Mexican presidency and congress this year should hear from U.S. officials that backsliding toward populism will limit economic opportunities for their own workers and create friction between our two nations.

According to the U.S. Conference of Mayors, many U.S. cities' annual economic output rivals those of entire foreign countries. There is no reason that resource-rich countries like Mexico and others in Latin America cannot approach such prosperity. To ease the tide of unauthorized migrants, U.S. foreign policy must seek to balance the equation.




Contributed by Stephen Johnson, Senior Policy Analyst in the Douglas and Sarah Allison Center for Foreign Policy of the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. Reprinted with permission from The Heritage Foundation.

To read another Global Envision article about Mexico's economy, see Has Neoliberalism Failed Mexico?.



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