Work in Progress: Prosperity in Home Countries May Not Stem Tide of Migrants to the US

For years, economists and politicians have said the solution to surging emigration is prosperity at home. If Mexico and other Latin American nations that send millions of migrants to the U.S. could grow fast enough, the theory goes, their residents wouldn't head north for work.

Last month, Mexican President Vicente Fox, looking to influence the U.S. Congress's latest efforts at an immigration overhaul, pledged his country would do its part, creating good manufacturing jobs for Mexican workers on their home soil. He pointed to more than 100,000 job openings in assembly plants established within a few miles of the U.S. border -- "opportunities," he called them, to tamp down the urge to migrate.

Now the theory looks wrong -- or at least simplistic. Emigration often surges along with economic development. In an expanding economy, would-be migrants gain the skills at home that pay better abroad. They also are better able to save the relatively modest sums -- $200 for a cut-rate airline ticket; $1,000 or so for a reliable border-crossing guide -- that workers looking to enter a better labor market need to take their skills north.

"There's an argument that says that, with development, some people who could not afford to migrate before now have the means to," says Phil Martin, a labor economist at the University of California, Davis.

Look at the numbers. Since 1986, the last time the U.S. Congress took up the problem of illegal aliens, the number of undocumented migrants has swelled to 11 million to 12 million from about four million, according to a study from the Pew Hispanic Center released in March. Since 2001, most economies in the region have been expanding at respectable rates of 3% to 4% annually. Yet immigration to the U.S. today is greater than ever.

Call it the Development Paradox. The more conditions in "sender" countries improve, the more emigrants those countries will send, at least until living standards in sending and receiving countries achieve rough parity.

Consider Brazil, which is enjoying its first currency stability in decades, while citizens are leaving in droves. In just one corner of the U.S., New England, the number of Brazilians has swelled to almost 500,000 expatriates, from just 120,000 in the mid-1990s. According to sociologists who have studied the exodus, many are middle-class Brazilians looking to "cash in" their winnings from the first good run of economic luck most have ever had.

Mexico provides even clearer evidence. A dozen years ago, when the North American Free Trade Agreement went into effect, many U.S. manufacturers outsourced production south of the border, helping Mexico add hundreds of thousands of jobs. The Heritage Foundation, a conservative think tank in Washington, reported in March: "The good news is that sound fiscal policies, the North American Free Trade Agreement, and institutional reforms have kept lots of workers at home."

But have they? Many of the new jobs were in garment assembly, an industry that draws low-skill laborers into the economy. More than 100,000 garment-assembly jobs from Los Angeles were transferred to Mexico. Garment centers like Torréon and Tehuacán absorbed excess labor from Mexico's countryside. Today those places are labor exporters.

"Before, migrants came north and they learned to work a sewing machine here," says Cristina Vazquez, western states' director for Unite Here, the largest garment-workers union in the U.S. "Now we see them coming from Mexico already knowing how to sew. Ten years ago, we never saw that."

Hunter College sociologist Margaret M. Chin discovered a similar change in New York City, where in 1996 she found half the Latino immigrants entering the industry from Mexico had previous experience working in garment maquiladoras back home. Today she estimates such "pretrained" laborers may well comprise 75% of Mexican garment workers in the city.

This apparent contradiction -- greater employment at home spurring migration abroad -- seems baffling until income differentials are factored in. In the decade since 1994, when Mexico suffered its last peso collapse, Mexico's per-capita income rose 17%, to $6,776 a year from $5,771. That surge trailed the 18% rise that occurred in the U.S., where per-capita income rose to $35,666 from $30,128.

Immigration economist Gordon Hanson of the University of California at San Diego has studied the relationship between wages and workers' urge to migrate. He calculates that for every 10% increase in the U.S.-Mexico "wage gap," border crossings rise 6%. His conclusion: Job holders in Mexico are being transformed into job seekers in El Norte.

"All evidence suggests that Mexican immigrants are individuals who have prospects for employment in Mexico. The lure of higher wages is simply too great for them to stay," Mr. Hanson says. "It's not unemployment that drives immigration, but opportunities for higher wages in the U.S."

There are examples of development slowing immigration. It happened in Europe, but it took a far greater expenditure of resources from wealthy countries to lift the living standards of poorer ones. Spain, Italy and Ireland were chronic sender countries before each joined the European Union. Funds poured in from "rich" Europe, mainly for public-construction projects that paid EU-standard wages. As the wage gap closed, the flow of labor from Spain, Italy and Ireland ceased.

Today, all three countries are net receivers of foreign workers, many of them illegal immigrants.