Wall for What?

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Article by John C. Edmunds and Mark F. Lapham, Special for  USDR

 

The proposed wall to keep Mexicans out of the United States has been an emblematic rallying cry for the anti-immigrant movement. Voters worry that multitudes of unskilled Mexicans are pouring into the United States, taking jobs away from the native-born labor force and burdening the public services. This debate assumes that Mexico’s population of young adults is growing fast, and it also assumes that job opportunities in Mexico are too few, so Mexicans seek to enter the U.S. in hopes of finding a job. Both assumptions are incorrect. The debate can benefit from a careful look at Mexico’s demographics., and at Mexico’s job  market.

 

Population data show that Mexico has undergone a striking pattern of demographic transition. Total fertility rate per woman in 1960 was as high as 6.87 births per woman. By 1980 total fertility rate had fallen to 4.57. By 2000 total fertility rate had fallen to 2.70, and since then has declined to an estimated 2.20 for the year 2017. The high birth rates of half a century ago are no longer happening, and Mexican women are now having barely enough babies to keep the population from declining. They are on track to be below the threshold for zero population  growth.

The demographic transition is reducing the available supply of young workers.   Recent data show convincingly that Mexico’s population of young men and women has stopped growing. In fact, every year there is a smaller portion of the Mexican population in the 18-24-year-old age range. For example, in 1990 14.3% of the Mexican population was in the age range 18 – 24. By 2015 that proportion had declined to 12.4%, and by 2017 it was 12.2%. What is more striking is that every year since 2015, fewer Mexican women have reached the age of 18. The birth rate has been falling for long enough so that there are now fewer women in their prime reproductive  years.

Mexico’s population is still growing, but much more slowly than it did half a century ago, and more slowly than it did last year. That growth, however, does not imply that more working-age young adults will be reaching the age to try to enter the United States. In recent years Mexico’s population growth rate has stayed positive because Mexican women are living so much longer. For example, in 1990 only 35,931 Mexican women were 90 years old or older. By 2017 that figure had jumped to  126,349.

So demographic data show that there are not going to be enormous numbers of Mexicans reaching the age range when they would seek to enter the United States. Now we can consider whether those young Mexicans can find work at home, instead of having to go north to find gainful  employment.

Employment statistics in Mexico show broad trends that indicate jobs are being created in Mexico. Total number of workers employed in Mexico rose from 48.4 million in 2013 to 52.1 million in 2016. These included jobs in manufacturing, which rose from 7.5 million to 8.5 million. Jobs in the other sectors of the economy also increased, and the gains were in primary production and secondary production; and the largest gain was in the tertiary sector, which includes commerce, restaurants, transport, finance, and social  services.

Wages in Mexico are also rising. The average daily wage rose 21% from 2013 to 2017. Consumer inflation during that time interval was about 18%, so real wages rose  slightly.

The unemployment rate in Mexico also declined. It was as high as 6% in 2010, as Mexico felt the shock waves of the 2008-2009 financial crisis. It has declined erratically to 3.4% in April 2017. That figure, however, is not the broad definition, which is the more relevant metric. Underemployment, i.e., workers in part-time jobs who would prefer full-time jobs, also has declined, from 10.7% of the labor force at the beginning of 2013 to 9.45% in the fourth quarter of  2016.

The combination of the shrinking demographic outlook with the improving employment prospects for Mexicans entering their working years implies that there is no multitude of Mexicans in urgent need of moving north for work. Nor will there be more Mexicans in the future who would seek to move north. The proposed Wall, therefore, would be of symbolic rather than substantive value. To keep out the Cubans, Guatemalans, Hondurans, and Salvadorians who are seeking to enter the U.S., it might be more effective to build a wall on the Guatemalan border. The length would be shorter, and the labor to build it would cost  less.

 

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