Illegal immigration has also contributed to the growth of off-the-books jobs and the breakdown of American labor laws. Over the past five years, only one of every five additional workers in private-sector jobs in the United States has ended up on the formal payrolls of national private-sector employers, where payroll and income taxes are withheld and workers are protected by laws regarding workers' safety, health, and wages.So it's clear that illegal immigration is not good for Americans. Ironically, some people in Mexico, the biggest "exporter" of illegal immigrants, think it is not good for Mexico either.
A number of employers and consumers gain from the hiring of illegal immigrants. Illegal immigration makes home remodeling, lawn care, housecleaning, child care, and other household services cheaper for more affluent homeowners. Some firms in construction, low-wage manufacturing, and the hospitality industry avoid immigration laws, wage and hour laws, and safety and health regulations to reduce labor costs and raise profits. Yet, these gains come at a price: declining employment and wage opportunities for some of our most vulnerable workers, denying them an opportunity to improve their long-run economic prospects.
But that makeshift policy that emptied rural Mexican towns and drained brains is beginning to reach its limit.So what's the solution?
Mexico's Central Bank Gov. Guillermo Ortiz touched on this recently when in Dallas he declared support for a border fence, warning that no nation can afford to lose its human capital indefinitely.
The problem goes much deeper than that.
Once again, the Central Bank of Mexico is on top of this, well ahead of the rest of the Mexican government.
In a 2005 study, that bank found a negative link between development and remittances -- the more remittances, the less overall development. The bank even went so far as to suggest poverty was caused by the dependency, not the other way around.
Because most cash sent back is used for consumption, and not investment, it gives only a short-term boost to GDP.
Last year, northern states like Nuevo Leon and others created 1 million new jobs. In the north, there's no remittance dependency, no lack of jobs, no emigration problem and no prospect of revolts.
Mexico can't get better until people can find better jobs locally than they can abroad. But remittances create a vicious cycle that makes that impossible.
Sending its best, most entrepreneurial workers abroad won't work. Only economic growth will do it. Get going, Mexico.
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