Immigration News: January, 2005 - Volume 12

Mexico: Legalization, Labor

President Vicente Fox congratulated Bush on his re-election and invited him to work for "an integral migratory agreement that will permit migration flows and respect the human and worker rights of Mexicans." Fox said he wanted to resume "the candid dialogue we began four years ago that has enabled us to establish a new understanding to the benefit of our two great nations" on immigration. Fox would also like to deepen Nafta with "Nafta Plus."

During the annual U.S.-Mexico Binational Commission meeting in November 2004, Foreign Relations Secretary Luis Ernesto Derbez said Mexico hoped to reach an agreement to regularize up to five million Mexicans living illegally in the United States before the end of Fox's term in 2006. Secretary of State Colin L. Powell said that Bush would place a "high priority" on pushing his January 2004 guest worker plan through Congress, but did not want to "overpromise" success. Powell said that Bush would "make an assessment with the new Congress of the pace at which we can proceed with the temporary work programs, and how fast and how far we can move and over what period of time."

After the talks, Mexican Interior Secretary Santiago Creel said that the likely outcome of 2005 migration talks would be a new guest worker program: "We think this flow has to be regulated in a circular manner ... so that workers can return from the neighboring country, while we ensure their basic human and labor rights."

Bush repeated earlier promises to work for Congressional approval of legislation "to make sure that, where there's a willing worker and a willing employer, that that job ought to be filled legally in cases where Americans will not fill that job." Bush promised to revive the January 2004 plan to allow unauthorized Mexicans in the US to receive renewable three-year work permits; Bush did not follow up in 2004 after Republicans in Congress denounced the plan.

Perspective. There have been three major changes in Mexico-US migration patterns over the past five years. First, there has been a diffusion of the origins and destinations of Mexican migrants- migrants come from more states in Mexico, and both rural and urban areas of those states, and more of the Mexicans heading to the US are women. Once in the US, Mexican migrants are traveling to more US states, working in an ever wider range of nonfarm industries and services, and settling, in part because of the difficulty unauthorized migrants have re-entering the US.

Second, there is a significant new influx of indigenous Mexican migrants, such as non-Spanish speaking Zapotecs and Mixtecs from southern Mexico. These indigenous migrants are among the poorest Mexicans, and their increased mobility within Mexico and to the US reflects economic changes in Mexico and improved network connections to US labor markets, and raising new integration issues, such as getting translators to deal with Indian-dialects in US courtrooms. Not all of the indigenous Mexicans are coming to the US: there are reports that some are moving from southern Mexico to the Mexican state of Zacatecas to fill in for local workers who have left for the US..

Third is the rising number of highly skilled Mexican migrants in the US. About 10 percent of all Mexican-born persons and 15 percent of Mexican-born workers, are in the US but, at 17 percent, the percentage of Mexicans with at least a high-school diploma who are in the US is even higher. Since Mexican migrants traditionally came from rural areas and were employed in US agriculture, the rising number of highly educated migrants marks a new development that may accelerate. Since January 1, 2004, Nafta permits an unlimited number of Canadians, Mexicans, Americans with a BA or more to cross borders and accept jobs in 60+ occupations, with their TN visas renewable indefinitely.

Over a million Mexicans living in the US travel south each December, including many unauthorized migrants who will pay smugglers to try to re-enter the US in January; travel south begins with the feast day of Our Lady of Guadalupe, and travel north with the Dˇa de los Reyes, or Three Kings Day. The Paisano Program aims to reduce corruption among Mexican customs officials, who check Mexicans returning with gifts. US Border Patrol officials fear a higher-than-usual northward rush in 2005 because of talk of a new "Bush amnesty."

Mexico reported 106 million residents in January 2005, up 1.1 million during 2004. The National Population Council estimated that 400,000 Mexicans emigrated in 2004. Andres Manuel Lopez Obrador, the Mayor of Mexico City, said emigration has maintained stability in Mexico: "how else can one explain 20 years without economic growth, (with) jobs not being created."

Economy. In mid-2004, Mexico had 12.5 million formal sector jobs -permanent private sector jobs that entitle the incumbent to enroll in the Mexican social security system (IMSS), with enrollment projected to rise by 430,000 during the year. Foreign-owned assembly plants (maquiladoras) are expanding, adding 10,000 jobs a month in 2004; they account for about a third of manufacturing employment in Mexico, but pay lower-than-average wages. In 2002, according to INEGI, the annual earnings of a worker in a maquiladora was $8,000, compared to $10,000 in other manufacturing.

Maquiladoras remain an enclave in the Mexican economy-over 95 percent of the inputs they use are imported, and their major benefit for Mexico is jobs and wages for its people. Maquiladora employment fell between 2001 and 2003, but recovered in 2004. Autos, electronics, and apparel account for 60 percent of maquiladora employment in 2004, and they are on different trajectories: the auto sector is expanding as it integrates more closely with its US and Canadian counterparts, and adding R & D capacity, electronics could expand again as the US recovers or shifts to Asia, and apparel is shrinking as wages and other costs rise in Mexico relative to other countries, especially China.

The Mexican and US economies are increasingly integrated. In 2003, there was a daily average of a million legal crossings from Mexico to the US . Some 15,000 trucks a day cross the border, with half traveling north and half south. Mexico's exports, 90 percent of which go to the US, rose from $42 billion in 1993 to $97 billion in 2003.

The stimulus that Nafta provided did not create sustained economic growth in Mexico because of inadequate structural and macroeconomic policies, such as lagging tax revenues, insufficient investments in its oil industry, and the failure to reform labor markets and educational systems. Corruption remains widespread, and the justice system is uneven, with little prospect for improvement because of political divisions. Real per capita GDP is about the same today as it was 20 years ago.

Economist Sidney Weintraub proposed that the US provide significant financial aid to Mexico in exchange for Mexico making needed internal changes to spur its economic growth rate and thus eventually slow unauthorized migration to the US. Weintraub doubts that a new guest worker program can eliminate the flow of unauthorized Mexicans. However, he notes that large US budget deficits and nationalism in Mexico may make it hard for the US to provide Nafta-plus aid that would help the Mexican government to make fundamental reforms. (www.csis.org/simonchair/issues200411.pdf)

Higher oil prices in 2004 are dulling the incentives for fundamental reforms in Mexico. In the early 1980s, oil accounted for 80 percent of Mexico's exports, and government spending plans assumed that oil prices would remain high. When they fell, Mexico was in crisis, unable to repay the debts it accumulated. Today, the Mexican Congress wants to spend more than President Fox because it assumes that oil prices will remain high; analysts say that most of the 2004 oil windfall was spent on public-sector salaries and other immediate expenses.

The Mexican auto industry is one of the bright spots in the Mexican economy. During the import-substitution phase of its development, auto makers had to build cars in Mexico to sell them there. However, since Nafta went into effect in 1994, more foreign firms have moved to Mexico or expanded their factories there, and about three-fourths of the 2.2 million cars a year assembled in Mexico are exported. Mexico wants to double car production, but its wages and energy costs are higher than those of Asian rivals.

Housing is another bright spot. Los Heroes, a low-income housing development in a distant suburb of Mexico City, offers 668 square-foot houses for $25,000, and the government housing fund Infonavit offers mortgages at an interest rate of nine percentage points over the inflation rate; Infonavit is financed by a five percent payroll tax employers pay into a special account for each worker along with collections on 2.1 million loans. The goal is to issue 750,000 mortgages a year, or about the number of new households formed each year. Most of the new housing developments offer four-room homes to workers that earn about $1,000 a month.

In October 2004, Mexican President Vicente Fox met with Canadian Prime Minister Paul Martin to discuss the expansion of the 30-year-old temporary worker program that sends seasonal farm, construction, factory and service workers to Canada each year. The farm worker program is the oldest of these and involves about 12,000 workers.

The US Supreme Court agreed to hear an appeal from a Mexican on death row in Texas who was convicted of murder. The Vienna Convention, which the United States ratified in 1969, requires the authorities of a government that is detaining a foreign citizen to act "without delay" in notifying the prisoner of his right to request help from a consul of his home country, which Texas authorities failed to do in this case. In March 2004, the International Court of Justice (World Court) ordered the United States to undertake "an effective review" of the Mexican man's convictions and sentences. Some speculate that the Supreme Court is acting at least in part because of dissatisfaction with Texas's death row practices rather than out of a newfound respect for the World Court.

The state of Oaxaca, with 17 Indian groups and 570 municipos, has many ethnic and land disputes, some of which are linked to the electoral system. In 152 Oaxacan municipalities, people elect their mayors by secret ballot, while in the others, traditional Indian assemblies elect leaders, often with a show of hands. In one village, the wife of a migrant who was in Las Vegas was killed by her opponent; she was elected mayor posthumously.

The Institutional Revolutionary Party (PRI) continues to rebuild after losing the presidency in 2000, winning eight of the last 12 governors' races. Mexico's constitution forbids reelection at all levels of government, and voters in several races rejected candidates who ran to replace their spouses.

A Social Security totalization agreement is expected to be submitted to Congress in 2005. SSA estimates that, once approved, 3,000 US workers employed in Mexico would no longer have to pay social security taxes to both countries, and 47,000 Mexican workers in the US would likewise be able to combine their earnings in the two countries. Critics, including GAO, say that the SSA estimate of Mexicans in the US who might earn benefits in Mexico based on their US employment is far too low. Social Security paid $470 billion to 47 million people in 2003.

Traci Carl, "Mexico studies how to make better use of migrant money sent home," Associated Press, November 17, 2004. "Fox to discuss migration with Canadian PM," El Universal, October 22, 2004. DePalma, Anthony. 2001. A Biography of the New American Continent. Public Affairs.