Cure immigration ills with trade, investment

  • James McCusker / Herald columnist
  • Saturday, June 9, 2007 9:00pm
  • Business

In the summer of 1986, a small group of American tennis fans that traveled to Mexico City to cheer on the U.S. Davis Cup team found itself unwelcome; no bienvenido at all.

The hotel where both players and fans stayed was surrounded by military guards armed with submachine guns, both an omen and a good idea as it turned out.

The American visitors were accompanied by armed guards and transported to the U.S. vs. Mexico tennis matches in police buses with wire mesh grills covering all the glass windows and even the driver’s windshield. This, too, was a good idea.

At the stadium, they were seated together, an idea that sounded good at the time. Placing the Americans in one section, though, did render them an easy target, and throughout the matches they received a deluge of airborne gifts of half-eaten food, beverages, lighted cigarettes and other amenities aimed at making their stay in Mexico memorable. They also received, at the stadium and elsewhere, a constant flow of travel suggestions telling them where they should go. Home was one of the choices.

In 2004, at an Olympics qualifying round soccer match in Guadalajara, Mexican fans not only booed when “The Star-Spangled Banner” was played, they chanted “Osama, Osama” when the U.S. team was defeated.

In 2007, just last week, Rachel Smith, Miss USA in the Miss Universe contest held in Mexico City, was booed by the audience there when she appeared on stage.

The anti-U.S. hostility is clear in all of these incidents, and this latest comes at a particularly inopportune time – just as the U.S. Senate is considering a new immigration reform bill. In an effort to downplay the matter, several explanations have been offered for the booing. The most imaginative is that the crowd’s boos were an attempt to communicate with the U.S. Congress. There is probably a way to say “Oh pul-eeze” in Spanish but it is almost certain to lose something in translation.

Denying that anti-American sentiment exists in Mexico is futile, of course. But it is also true that Mexican feelings about the U.S. are complicated – most love-hate relationships are. Still, it is a relationship that colors all aspects of the illegal immigration issue, including its economic underpinnings.

The most disturbing of the arguments in favor of a very loose immigration policy addresses those economic underpinnings head on. The idea behind it is that income disparity is the driving force behind illegal immigration. Until that gap disappears, illegals will continue to flow into the United States, irrespective of measures to stop them.

What is wrong about this argument is not its premise. The income disparity is real, especially in the case of the lower-skilled workers that account for most of the illegal immigration. Low-skilled workers in the U.S. earn nearly four times what similarly skilled workers in Mexico are paid. Clearly there is a force of attraction.

It was recognition of that economic force, in fact, that prompted the Simpson-Mazzoli immigration reform, signed into law 21 years ago. The idea behind it was to reduce the economic attraction by closing out the prospect of employment for illegal immigrants. Employers had to verify the legal status of every worker and that, incredibly in retrospect, was believed sufficient to end the matter.

The results were quite different from the intent. Even after providing amnesty and a route to legal residency and citizenship for 2.5 million people, the flow of illegal immigrants accelerated and, one way or another, they found work here. The number of illegal residents is now estimated to be over 12 million and still growing.

Strangely, the failure of the Simpson-Mazzoli approach has not figured much in the discussions surrounding the new law. Neither the administration nor the Senate seems much interested in what went wrong, or in avoiding “a case of history repeating.”

Addressing failure is never easy, but it is almost always better than the alternative of denial. And at bottom, denial of responsibility is at the heart of what is wrong with the income-gap argument: its acceptance of the idea that nothing can be done about illegal immigration. This, however, promises a bleak economic future not just for the current residents of the U.S. but for those yet to come.

Since the U.S. economy is not capable of absorbing all of Mexico’s low-skilled workers let alone those of the rest of the world, we have to look to other solutions. Theoretical economics only provides two other ways to reduce the gap: investment, and trade. Most importantly, though, we need a commitment to make the economic forces of immigration, trade, and investment work for us, for our country as a whole. Without that, nothing can be done. Really.

James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.

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