Discussions of immigration routinely differentiate between its push and pull factors. Natural disasters, political persecution, economic crises, and poverty at home push emigrants from their countries, while wage differentials and the enhanced ability to accumulate capital are routinely noted as factors that pull people away. While useful analytically, a stark differentiation between push and pull factors causes us to overlook the complex set of interactions across borders and economies that shape the incentive structure for those contemplating emigration. This chapter argues that rather than viewing Latino (and primarily Mexican) immigration to the United States through the lens of push and pull factors, it is more useful to focus on how the timing and sequencing of a combination of policy choices and economic changes created, and continues to create, more powerful incentives for immigration than any of the push or pull factors considered in isolation produces. In particular, the advent and hegemony of neoliberal economics in Mexico, the implementation of the North American Free Trade Agreement (NAFTA), and the timing and sequencing of changes in U.S. immigration law have unfolded to produce a mutually reinforcing incentive structure that inexorably encourages immigration. This chapter provides that analysis, underscoring that immigration policy that fails to recognize the multidimensionality of the immigration incentive structure will be ineffective. Complex problems require complex solutions. Policy proposals that deal with a single push or pull factor or simplistic solutions like deportation and wall building fail to address the underlying forces driving Latino immigration to the United States. This chapter analyzes these forces and their implications for the potential success of immigration reform.
Economic transformation in Mexico is one of the driving forces behind immigration. But not all of these transformational forces originated in Mexico. The neoliberal economic model of free markets and open borders that held virtually worldwide intellectual sway in the 1980s and 1990s is most closely associated with the economic policies of Ronald Reagan and Margaret Thatcher. However, neoliberalism took root in its earliest form in Latin America before either of these leaders came to power. The path toward the complete restructuring of the Latin American state began in Pinochet’s Chile during the 1970s, with the adoption of a set of free market reforms inspired by Friedrich Hayek, Milton Friedman, and economists educated at the University of Chicago. The policies of Chile’s so-called Chicago Boys presaged the adoption of such policies: first by authoritarian regimes in Argentina, Brazil, and Mexico and later by democratic regimes across the continent. Perhaps most important, the U.S. government, World Bank, International Monetary Fund, and Inter-American Development Bank adopted this set of free market policies, which became known as the “Washington Consensus,” as the standard reform package for crisis-wracked Latin American economies in the 1980s.
Mexico was no exception to this general trend, and elements of the Washington Consensus are some of the driving forces behind immigration. Like most of Latin America, between 1930 and 1970 Mexico pursued state-led import substitution industrialization (ISI) policies, characterized by a large state sector, the protection of domestic industries, and the nationalization of major sectors of the economy. Trade union membership swelled, and the state developed an extensive array of social and land reform policies aimed at reducing inequality and poverty. At the height of the project of state-led development, one of every five Mexicans was employed by the state.1 During this period Mexico experienced dramatic growth, anchored by petroleum income, with a sixfold increase in GDP between 1930 and 1970. Rapid growth combined with high oil prices encouraged extensive borrowing throughout the 1970s with the blessings and encouragement of international lending institutions. Initially, the Mexican economy continued to perform well, with increases in the GDP averaging 7% between 1977 and 1981. However, beginning in 1981 the fallout from increased interest rates in the United States and budget shortfalls from spectacularly falling oil prices pushed the Mexican economy into crisis, with a series of peso devaluations, capital flight, spiraling inflation, and the declared insolvency of the Central Bank of Mexico. In September 1982 Mexico suspended payment on its debt, necessitating an international bailout by the United States and multilateral lending institutions.
The structural adjustment policies promoted by the U.S. government and allied lending institutions as a response to this crisis, combined with a general trend toward the acceptance of market solutions in the region, marked the beginning of Mexico’s neoliberal experiment. The Partido Revolucionario Institucional (PRI) ruled Mexico as a single-party authoritarian regime between 1917 and 1997. Though intimately tied to the development of the large Mexican state, the PRI was also noted for its pragmatism with respect to economic policy and was the driving force behind neoliberalism. Since 1982 Mexico has had five presidents, three from the PRI (Miguel de la Madrid, Carlos Salinas, and Ernesto Zedillo) and two from the right-wing opposition party, the Partido de Acción Nacional (PAN) (Vicente Fox and Felipe Calderón). All have embraced neoliberal economic policy, with important consequences for the Mexican economy and the driving forces behind immigration.
Though Miguel de la Madrid (1982–88) initiated the move toward neoliberalism, responding to the deep economic crisis gripping the country (and to creditors), the pace of adoption of market models quickened under the Salinas (1988–94) and Zedillo (1994–2000) administrations, with a comprehensive restructuring of the Mexican state and economy. Tariffs were slashed and foreign investment restrictions eliminated. In 1985 the government removed quantitative restrictions on 60% of Mexican imports in response to an agreement with the International Monetary Fund.2 Mexico signed on to the General Agreement on Tariffs and Trade (GATT) in 1986, formally institutionalizing a commitment to the elimination of trade barriers. The 1994 NAFTA accord (dealt with extensively later in this chapter) further reduced tariffs and exposed previously protected domestic industries to the “full force of global competition.”3
Successive governments also embarked on a comprehensive program of privatization, with a decrease in the number of state-owned industries from 1,155 in 1982 to 412 in 1986. Previously communal lands (or ejidos) were largely privatized and the government provided economic incentives for private agricultural producers. The size of major state bureaucracies was cut, and state employment decreased. Slipping petroleum prices again contributed to further worsening the situation of working Mexicans under Zedillo’s administration, during which the Mexican government slashed employment in the government-owned Pemex oil company, reduced government subsidies, and raised taxes on fuel, rents, and telephone service.4
Drawing a direct relationship between neoliberalism and immigration is potentially hazardous. However, there are a few concrete realities that suggest neoliberalism helped motivate increased immigration beginning in the 1980s. First, the neoliberal experience did little to improve the economic status of and opportunities for average Mexicans, and it hurt the least advantaged, increasing the attractiveness of a trip north to escape economic desperation. Real minimum wages have consistently declined in Mexico since the late 1980s. Real per capita GDP in Mexico consistently stagnated or fell between 1980 and 1997, and the rebound in growth of per capita GDP has been anemic ever since.5 This declining growth is especially stark when compared to Mexico’s average annual GDP growth during the ISI period. For each of the three decades prior to 1980 average annual GDP growth ranged between 6 and 7%, while for the 1990s it was just under 4% and for the period 1994–2003 it averaged about 3%.6 What is more, the growth that has occurred since the adoption of market reforms has been unequally distributed. Despite slight improvements in selected years, inequality has increased from 1984. The Gini coefficient measuring inequality held steady at above .500 during most of the 1980s and gradually worsened. Only recently has it dipped back to 1984 levels, yet Mexico remains among the least equal countries in the world.7
Mexico’s neoliberal reforms also corresponded with a dramatic spike in the levels of informality and precarious informal employment, increasing, in turn, the attractiveness of a trip north. Most Latin American economies have large informal sectors that include domestic service, ambulatory street vendors, and small unregulated businesses. Jobs in these areas provide no social benefits. Throughout the 1980s the Mexican economy experienced spectacular growth in the informal economy. The percentage of GDP generated by the informal economy peaked at over 80% in 1988, though it subsequently stabilized at about 30% in 2006. While this is an important improvement, even without the dramatic economic crisis of the 1980s a third of Mexico’s GDP is still generated by the informal economy, and slightly over a third of the country’s workforce remains employed in it.8
The political implications of Mexico’s adoption of neoliberalism are also significant and likely provided additional impetus for emigration. Mexico’s economic transformation was accompanied by a political one with important impacts for both the PRI and interest representation in Mexico.9 Previous channels of political influence and the ability to extract resources from the government were transformed for key social groups in the country. Thomas Callaghy refers correctly to the connection between politics and economics as the “orthodox paradox” where state influence is used to transform economies in an ironic effort to reduce the state’s influence.10 This orthodox paradox was especially stark in the transformation of Mexico’s single-party authoritarian regime. The PRI relied on a corporatist structure in which major social groups (including trade unions, business associations, and peasant organizations) were connected directly to the state through peak associations tied to the party.11 This form of organization represented a double-edge sword. The state was provided a direct link to repress the demands of groups, but at the same time the stability and longevity of the regime depended on providing a modicum of political influence and, more important, concrete resources and concessions to the demands of corporate groups. With economic liberalization, the corporate structure, the state’s power over resources, and the distribution of resources have been transformed, leaving groups with fewer avenues for interest representation and resources acquisition.
The changing role of trade union organizations exemplifies the political transformation of group representation in Mexico. The PRI maintained control for seventy years by containing opposition to its rule through repression and cooptation. Challenges by trade unions were met first with repression and then with attempts to buy off emerging counterelites.12 Labor relations in Mexico have been undertaken within a model of state tutelage, with the state controlling rank-and-file workers and the granting of “limited protection of employment, wages, and working conditions.”13 The move toward neoliberalism has transformed labor-state relations and undermined labor influence in policymaking, industrial relations, conflict management, and contract negotiation. The abandonment of the old political model for labor representation, no matter how authoritarian it was, also left workers with fewer avenues for representation and resource acquisition.
In the countryside, neoliberalism and the process of rural marketization had similar political and economic consequences. The basic organization of rural farming moved from a system of communal farming to one of private agricultural producers. By privatizing the agrarian support infrastructure, the PRI eliminated its ability to buy off peasant influence through the distribution of clientelist goods. However, at the same time the networks of peasant organization that had grown up around PRI structures were fragmented, cutting off one of the few existing avenues for peasant and small farmer political influence. Peasants lost the ability to advocate and receive the resources that could underwrite protection of their political and economic interests. In turn, state provision of agricultural supports (credits, fertilizers, seeds, price guarantees, technical assistance, etc.) markedly declined during the economic crisis of the 1980s.14 NAFTA exacerbated this pattern of political and rural atomization and contributed to the decimation of rural communities by the exodus of young able-bodied men to Mexico City, regional capitals, and the United States.15
One could argue that many events conspired at once to produce the economic change in Mexico that encouraged immigration, including the signing of NAFTA, the 1994 peso crisis, and an extended recession from 1994 to 1996. However, in many ways these are all part of the neoliberal package. Also, the promise of neoliberalism to spur development and provide economic opportunities for ordinary Mexicans has clearly failed. Lacking economic opportunity or political power, immigrants respond to the transformed landscape of the economy wrought by neoliberalism by emigrating to the United States. Massey, Durand, and Malone confirm the argument set out here, demonstrating that the imposition of the neoliberal economic regime in Mexico prompted a dramatic increase in the cross-border movement of labor. Another surge also corresponds to the adoption of NAFTA.16
While campaigning for the 2008 Democratic presidential nomination in the United States, Hillary Clinton called for a renegotiation of NAFTA based on the implicit assumption that despite the United States’ leading role in spearheading the trade agreement, somehow the country got a bad deal. Debate in the United States over NAFTA’s consequences, understandably, centers on its effects here. However, Clinton’s contention that NAFTA should be renegotiated would likely resonate in Mexico. Most Mexicans would agree that the agreement bears renegotiation, but on the Mexican side of the border this renegotiation would entail elimination of the advantages the agreement provides for the United States. Rarely do Americans consider the uneven, and often negative, consequences of NAFTA on the other side of the border and how the agreement is intimately connected to the immigration of Mexican workers into the United States.
The contemporary rhetoric surrounding NAFTA differs starkly from that which surrounded it when the enabling legislation was passed. NAFTA at the time was touted as a solution not only to Mexico’s dilemmas of economic development but also to the U.S. immigration “problem.” The idea was that rapid economic development based on trade would transform the Mexican economy, providing enough wealth and jobs to encourage would-be immigrants to stay put. However, rather than stemming immigration, NAFTA in many ways has encouraged it.
Before analyzing how, it bears mentioning that on some counts NAFTA has been a success. Between 1994 and 2008 Mexico’s non-oil exports have increased fourfold, and the stock of foreign investment is fourteen times higher in 2008 than it was in 1994.17 The dire predictions of a massive flow of jobs south never materialized. Unemployment rates in the United States have not spiked significantly, and the value of two-way trade between the United States and Mexico has increased markedly. Overall, U.S. exports to NAFTA partners increased 104% between 1993 and 2000, while trade with the other U.S. trading partners combined grew only half as fast.18
However, sweeping claims concerning NAFTA’s success often obscure that the agreement’s benefits have had distinct consequences across different sectors and social strata. Clearly NAFTA has been a success for some people, but these do not happen to be the people of interest when it comes to discussing immigration. As is the case with neoliberalism in Mexico, certain economic sectors and certain populations have been relatively hard hit, and these are those that have, subsequently, been the most likely to choose emigration. NAFTA’s major significance to the immigration debate lies in two areas: its effect on labor in Mexico and its effect on agriculture. Both encourage immigration to the United States.
Aggregate measures of the economy’s performance show little improvement in post-NAFTA Mexico. As already noted, since the beginning of the neoliberal period in Mexico, growth in real and per-capita GDP has been anemic. It bears mentioning here that it showed no significant improvement following NAFTA’s implementation. One of NAFTA’s most heralded benefits was the purported ability of cross-border economic exchanges to reduce disparity of incomes in the two countries. In fact, disparity in income between the two countries actually grew by 10.6% during the first ten years of NAFTA.19 The data show few significant inroads against poverty during the NAFTA period. In 1992, 44.1% of households were characterized as poor, which increased to 60.8% in 1996, leveling off again at the same rate as 1992 at 44.1% in 2002.20
Mexico’s improved employment situation since the signing of NAFTA is also often cited as evidence of the trade agreement’s success. Government statistics routinely set unemployment rates at about 3% and underemployment at 7% in recent years.21 Without even entering into questions concerning the reliability of these statistics (which are manifold), there are a number of problems connected to the assumption that NAFTA has improved the employment situation of Mexicans. The quality and the type of employment matter as much as the numbers, and the numbers themselves mask an informality that points to much higher levels of unemployment and underemployment than suggested by government statistics.
The imbalance in the supply and demand of labor has led to a good deal of creativity in employment structures, which is masked by Mexico’s impressive unemployment numbers. In addition to the vast informal sector already noted, many workers’ choices boil down to self-employment or work in a microbusiness (an independent business with a small number of workers). Between 1990 and 2004 the percentage of workers who fit into this much lower wage category fluctuated between 38% and 45%, representing a substantial proportion of the Mexican workforce.22
This type of precarious employment is also reflected in the benefits structure associated with these jobs. Between 2000 and 2004, 23% of new wage-earning positions provided no social benefits, and only 37% of the jobs carried full social benefits. In 2004 a full 43% of wage earners’ employment was governed by a verbal contract. Of these workers, 86% received no social benefits, while for those with a contract only 3% received no benefits.23 As noted already, neoliberalism undercut the power and traditional patterns of trade union organization in Mexico. NAFTA includes no guarantee of the right to organize for independent unions. Thus, the agreement did little to provide alternative forms of labor organization that could help blunt the impact of neoliberalism or provide a new way for labor to bargain for even minimal rights of social protection under the sometimes barbarous wage competition produced by NAFTA and globalized trade.
NAFTA’s critics and proponents alike recognized that some U.S. manufacturing jobs would be lost to Mexico, as the country benefited from the comparative advantage of cheap labor. As predicted, some of these jobs did indeed move south. However, many of the jobs that moved to Mexico were located in the maquiladora sector just across the border. While the manufacturing sector as a whole grew by the much touted figure of 2.7 million jobs between 1991 and 2000, of these 800,000 were in maquiladora plants. Wages in the maquiladora sector are 40% lower than those in the traditional manufacturing sector. Maquiladora jobs also fail to generate the same types of opportunities for employment as traditional manufacturing.24 These assembly-based factories have minimal connection to the rest of the domestic economy and rely largely on foreign inputs. The potential for these factories to generate new jobs in the production of domestic inputs—in the way that traditional factories do—is limited.
Proponents of the positive jobs impact of NAFTA fail to note that the number of employers and workers in manufacturing began a steady decline in 2000. Though the number of manufacturing jobs in Mexico increased slightly in 2004, there remains a net loss of 180,000 manufacturing jobs since the period of peak employment in 2000.25 While Ross Perot cautioned against a big “sucking sound” as U.S. jobs moved across the border, he failed to mention that in a globalized economy that pits workers against workers across borders, the forces pulling jobs away from the Northern Hemisphere operate in Mexico the same way they operate in the United States. Just as manufacturing jobs moved from the mills of the U.S. Northeast to the Southeast and then to Mexico, those same jobs traveled easily to Bangladesh and Vietnam, countries with even lower labor costs than Mexico. Mexican workers feel the loss of industrial jobs in the same way that American workers feel it and similarly rightly attribute the loss of jobs to open markets.
Finally, the low unemployment rate in Mexico is also explained by the simple fact that so many able-bodied people have chosen to leave the country. Over 10% of Mexico’s population and 15% of its active labor force lives and works in the United States, providing an effective unemployment safety valve for the Mexican economy.26
NAFTA’s effects on agricultural workers parallel those for industrial workers. Even before NAFTA the forces of globalized agriculture where taking hold in Mexico. Steven Sanderson shows that by the 1970s Mexico had become a net food importer, as the incipient move toward the production of products for export combined with changing tastes to lead to a decline in the production of basics foodstuffs—particularly corn.27 Production for cash-generating export markets, rather than domestic food production, became increasingly dominated by international agribusiness, displacing traditional small-scale producers. The basic structure of agricultural production was also transformed, with NAFTA contributing to a process of marketization already under way. In 1992 the Mexican government permitted the sale of previously communal ejido lands, which by law could not be sold between the Revolution of 1917 and 1992. Though central to agricultural production and the social structure of rural communities, the government long viewed ejidos as inefficient.
NAFTA was billed as an opportunity to create an open, dynamic market for agricultural goods and as a boon to agricultural employment in Mexico. In turn, rural opportunities could help stem migration to the cities and to the United States. While once again the overall trade numbers look good, with rapidly increasing cross-border trade in agriculture, a closer look at the details of this trade leads to a less happy conclusion.
Rather than leading to open markets and competition, NAFTA institutionalized protection for U.S. agriculture, with deleterious consequences for Mexican agriculture. The average annual farm subsidy for an American farm is $20,000 while in Mexico it is $720.28 Furthermore, it is the largest corporate farms in the United States that receive the largest subsidies, pitting large, well-financed agribusiness against smaller producers and producing a structure of competition that make it impossible for small-scale farmers in Mexico to compete.
Corn is at the center of Mexican diet and culture; yet, once food self-sufficient, Mexico has now become a net importer of corn. While certainly income from export cash crops makes up some of the difference in net agricultural exchanges, it is important to follow the money. In this case cash is again flowing away from those who are—largely as result of these same agricultural policies—ever more likely to leave for better prospects in the north. While income and profits for Mexican and U.S. agribusinesses have dramatically increased since the advent of NAFTA, for those remaining on the land agricultural wages have declined. Between 1991 and 2003, the average wage for agricultural day laborers fell from 535 to 483 pesos per month, and self-employed field workers’ earnings fell from 1,995 pesos per month in 1991 to 228, representing an 88% decline in wages.29 Employment in the agricultural sector has steadily dropped, falling from 26 million in 1980 to 22.6 million in 1990 to 15.8 million in by 2000.30 The most affected agricultural workers were corn producers, with a loss of over 1 million jobs. These trends have devastated rural farming communities in Mexico.
Evaluating the desirability of trade agreements involves looking at more than just the bottom line of overall efficiency and macroeconomic indicators. Indeed, even on these counts where the agreement has been most lauded, this chapter has shown that NAFTA’s impacts on macroeconomic trends in growth and employment have been decidedly mixed. Moreover, a closer look at the distribution of costs and benefits and who is hurt and who is not shows a decidedly less mixed outcome. The NAFTA accord, combined with Mexican neoliberalism, provided a potent cocktail for Mexico’s most vulnerable populations—precisely those whose only option to provide decent lives for their families was to head north.
While the story of NAFTA and neoliberalism is one of eliminating borders, the story of U.S. immigration law has been about fortifying and militarizing a border. This process of breaking down economic walls and constructing physical and legislative walls is part of the interactive evolution of the incentive structure governing immigration. Simple economic change in Mexico or policy change regarding immigration in the United States fails to fully explain why we face the immigration situation we do today. Rather, the explanation lies in how the two processes of change have interacted and in the manner in which the tightening of immigration law at the very time that powerful economic forces were unleashed produced a series unintended consequences. In essence, the restrictive nature of immigration legislation itself creates many of the so-called problems the United States is experiencing today with respect to its immigration population.
The impetus for the type of immigration we know today began with and has been facilitated by U.S. government policy responses. An early and persistent pattern developed whereby government policies encouraged immigration when necessary and in response to economic interests and attempted to scale it back when domestic pressures, nativist sentiment, or economic downturns pushed politicians to enact restrictions. This same pattern is evident in a series of ebbs and flows in the pace of Mexican immigration over time.
The first major wave occurred late in the nineteenth and early twentieth centuries. In 1882 the U.S. government passed the Chinese Exclusion Act in response to rising anti-Asian sentiment in the West. The reaction to the shortage of Asian workers unfolded at the same time that a series of circumstances on both sides of the border encouraged an influx of Mexican workers. Between 1900 and 1910 as many as a half million Mexicans came to the United States fleeing the civil war that we came later to know as the Mexican Revolution.31 In 1917, in response to a wartime labor emergency, the U.S. secretary of labor granted a waiver to the 1885 law barring contract labor, further facilitating the influx of Mexican workers. Throughout the 1920s, while restrictions were being applied against further European immigration, Mexicans were routinely exempt from such restrictions, often as a result of pressure from industrialists and farming interests to maintain lax immigration laws to keep wages low.32 Legislation aimed at encouraging immigration was accompanied by what amounted to an open border policy, which allowed Mexicans to come and go as they pleased in response to changes in the supply and demand for labor. Though a border patrol was established in 1924, it was largely symbolic and ineffectual, and a pattern of cyclical and seasonal migration developed between Mexico and the United States.33 In essence the border was a mental rather than physical construct.
With the advent of the Great Depression, immigration slowed dramatically, and tens of thousands of Mexicans returned to Mexico, both voluntarily and through forced repatriation. Extreme nativist sentiment and scapegoating in response to growing joblessness in the United States, and the policies of land redistribution of the Cardenas (1934–40) government in Mexico, led to a 41% decrease of the Mexican population in the United States during the 1930s.34
The pattern of seasonal and circular migration continued during World War II and in the postwar period as the U.S. economy reassumed growth in response to war demand and President Franklin Roosevelt’s New Deal policies. The Roosevelt administration responded to labor shortages with the approval of a binational treaty to bring farmworkers known as braceros on a temporary basis. The success of the program, at least in the eyes of southwestern ranchers and farmers, led to its establishment as a permanent program run by the Immigration and Naturalization Service (INS) in 1951. The program continued to function for thirteen more years. However, the incentives provided by the program, in many ways, helped initiate the pattern of illegal immigration we see today. Massey, Durand, and Malone show how “gaping loopholes” in the program allowed the growth of undocumented workers alongside growth in the number of braceros.35 By the 1960s the bracero program was increasingly viewed as an exploitative program, and it came formally to an end. What is more, employers found it easier to employ undocumented workers than to work through the bracero program. Nonetheless, the bracero program’s legacy is still felt today. During this period, a large percentage of the Mexican population became familiar with the rules of the game in the United States, with English, and with how to manage life north of the border. Workers began to establish networks of support alongside some of the more permanent Latino population in the United States. This knowledge and experience permitted the ebb and flow of immigration to continue. The bracero program also helped build in a structural bias in the labor market where certain jobs in agriculture, construction, and the service industry were perceived to be “foreign” jobs.
This toehold of Mexicans in the United States planted the seed for what would become the era of the most significant Mexican migration. Massey, Durand, and Malone refer to the 1965–85 period as the “Era of Undocumented Migration,” with approximately 28 million Mexicans entering the United States.36 Essentially, and continuing previous patterns, U.S. policymakers balanced the demands of business for cheap labor with popular demands to defend the United States from an “invasion” of foreigners through symbolic and halfhearted border enforcement. However, in reality, this period signaled the simple maintenance, albeit on a larger scale, of the same type of circular migration that historically existed. Singer and Massey estimate that between 1965 and 1986, 84% of undocumented workers in the United States returned to Mexico.37 While these figures certainly also count multiple border crossings, the point is, of course, that the border’s porous nature allowed workers to cross the border for short periods to accumulate capital and then head home.
A series of legislative and bureaucratic changes in the mid-1980s transformed this historic pattern. The most important was the Immigration Reform and Control Act of 1986 (IRCA), which has been extensively detailed in other chapters of this volume. In essence, the act and legislation that followed it during the 1990s transformed the incentive structure surrounding immigration in a number of ways. First, tougher limits on immigration and enhanced enforcement made it less easy to leave the country and return to Mexico with the expectation of an eventual return to the United States. It now made more sense to stay put to avoid the expense and danger of traveling back and forth across the border. Second, IRCA provided legalization for undocumented residents who could prove continuous residence in the country since 1982 and required that those undergoing legalization remain in the United States during the process. These two elements provided a short-term incentive to stay. In addition, the precedent of providing legal status for long-term illegal residents provided an expectation that remaining in the United States might result in eventual legal status. Finally, for many new arrivals and newly naturalized residents who were deprived of the potential to return to Mexico, the only option to see their families was to bring them here, rather than the past practice of short-term visits followed by a return to the United States. Under IRCA the fundamental rules of the game had changed. No longer was the seasonal and circular migration of the past an option, as the new pattern became one of permanent settlement with little intention to return home.
However, as this chapter has argued, immigration law alone did not produce the swelling ranks of Mexicans coming to the United States. IRCA and its accompanying legislation was passed precisely at the time that Mexico’s neoliberal reforms were at their most intense, battering rural farmers and urban workers alike, once again creating an incentive structure in which leaving made more sense than staying. At the same time, NAFTA’s uneven performance—and its tendency to benefit the most privileged sectors of Mexican society at the cost of the weakest—created a large population whose only real economic opportunities lay outside of Mexico.
This chapter has focused on the multidimensional interaction between economics and public policy and the incentives they produce to drive Mexican immigration to the United States. The fundamental challenge is how to transform the whole incentive structure when, as this chapter has shown, immigration has emerged as a response to a powerful confluence of policy choices and global economic realities. Simply changing a few laws or a few economic structures is unlikely to have significant impact.
For example, the current debate on immigration policy in the United States centers on one or a few symptoms or “problems” of immigration rather than its deeper causes, leading to politically marketable yet functionally unworkable policy prescriptions. Politicians tout “easy” and “commonsense” solutions such as securing the border, building walls, and deporting “illegals.” The irony is that these solutions neither make sense, nor are they easy; and they will certainly not be effective in solving the problems created by what is almost universally viewed as a broken system. Only by viewing the entire economic incentive structure driving immigration can successful policies be designed and implemented. The full consequences of all of this volume’s findings and the direction they point for policy will be taken up in chapter 14. However, what clues does this analysis of the interaction of economic change in Mexico, NAFTA, and immigration policy provide us about shape of potentially successful reform?
First, let us consider the policy consequences of a victory for immigration’s most vocal and strident opponents. If the United States dedicates the enormous resources it would take to build a wall to staunch the flow of immigrants and forcibly repatriate those who are here, will we be better off? Even if possible (which is unlikely) and leaving aside the profound moral implications (which are many and conjure up the most regrettable periods in human history), the success of such a reform would be a pyrrhic one, coming at a high cost for Mexico and the United States. Shutting off the safety valve provided to Mexico by immigration to the United States would create substantial suffering and potential instability south of the border and likely disrupt trade and oil imports and other NAFTA-based trade. In the United States, already escalating food prices would be pushed even higher, and the period of cheap construction would come to an end, irritating an already ailing housing sector. The U.S. economy would experience an extremely serious economic contraction with the loss of not just cheap labor but also the millions injected into the economy by undocumented workers. For economic as well as social reasons, therefore, we would do well to design a more realistic, humane, and workable solution.
Virtually everyone agrees that the economic development of Mexico would take care of the immigration “problem.” People do not leave the countries, cultures, native languages, and families they know and love unless powerful incentives compel them to do so. The problem is that people disagree on what the optimal economic policies to promote development in Mexico should be. Neoliberalism has been given a chance and has failed. This does not mean that we abandon markets. Rather, markets should function where appropriate but be accompanied by investments in Mexican agriculture and industry. An increasing body of evidence shows that government involvement in growing economic opportunity through the development and support of infant industries can better target development toward the populations most affected by the dislocations of neoliberalism and NAFTA. Fair minimum wage policies on both sides of the border would lead to increased income and increased consumption and expenditures and could also help stem the tide of immigration. What is more, Mexican policymakers would be well advised to take a close look at welfare benefits, antipoverty programs, and the rights of workers and unions.
Economic development and the adoption of the correct economic policies are, of course, deeply tied to NAFTA. Chapter 3 has already explored the possibility of NAFTA’s evolution toward the type of integration that characterizes the European Union. While this is an attractive option, the structural differences between the two cases with respect to the size and inequality of the two economies make it unlikely that the types of wealth transfers that underwrote the European project could work in North America. What is certain, however, is that the millions that would be spent on a wall or deportation—and which have already been spent to keep so many undocumented workers out of the country—could be better used to finance the development of opportunities in Mexico that would help stem immigration. In addition, the NAFTA accord must be reconsidered in light of its negative impact on the incentive structure for immigration. NAFTA must be adjusted to make the inequalities it generates less damaging to the most vulnerable populations. Finally, the powerful impact of U.S. agricultural subsidies on the Mexican economy needs careful evaluation if any progress is to be made in stemming the tide of movement from rural Mexico to urban Mexico and the United States.
Immigration legislation that takes account of the underlying economic incentives for immigration is the final piece of this complex puzzle. While the full-scale reinstatement of the seasonal and circular pattern of immigration is difficult to reproduce, given the large permanent population of Mexicans in the United States, a guest-worker program could be part of a comprehensive package of reforms that would better allow worker supply and demand to fall into balance.38 In addition, the creation of more slots for the legal immigration of unskilled workers would ease some of the pressures on the current system and allow us to dispense with the tremendous costs of enforcement and use those funds to help spur economic development on both sides of the border. Finally, the federal government has for too long created unfunded mandates with costs and responsibilities that fall to the states. In a similar fashion, the inability or unwillingness of the federal government to enforce immigration rules has fallen heavily on individual states. The federal government would be well advised to soften the impact of the influx of large numbers of immigrants on schools, hospitals, and municipal governments in order to be able to sell an immigration policy that is at once humane and at the same time a benefit to both immigrants and the U.S. economy.