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					San Francisco Chronicle
Explanatory
Entry: Give and Take Across the Border
Credit: Carolyn Lochhead, Chronicle Staff Writer, Washington Bureau
Carolyn Said, Chronicle Staff Writer
Date: May 21, 2006
Pages: A1 and A8


Give and take across the border
1 in 7 Mexican workers migrates -- most send money home

Carolyn Lochhead
Chronicle Washington Bureau

Washington -- The current migration of Mexicans and Central Americans to the United
States is one of the largest diasporas in modern history, experts say.

Roughly 10 percent of Mexico's population of about 107 million is now living in the
United States, estimates show. About 15 percent of Mexico's labor force is working in the
United States. One in every 7 Mexican workers migrates to the United States.

Mass migration from Mexico began more than a century ago. It is deeply embedded in
the history, culture and economies of both nations. The current wave began with
Mexico's economic crisis in 1982, accelerated sharply in the 1990s with the U.S.
economic boom, and today has reached record dimensions.

It is unlikely to ebb anytime soon.

"There is no scenario outside of catastrophic attack on the United States that would make
immigration stop," said Demetrios Papademetriou, president of the Migration Policy
Institute, a nonpartisan think tank.

The fierce immigration debate now under way in Congress focuses almost exclusively on
the U.S. side of the equation. Senate legislation attempts to reduce the flow by hardening
the border, sanctioning employers who hire illegal migrants, and expanding avenues for
legal immigration. The House passed a bill focused solely on U.S. enforcement.

Yet whatever the United States decides about immigration will have a huge impacton its
closest neighbors, especially Mexico.

What happens in Mexico, by turn, has a big effect on immigration flows to the United
States. Those events include a hotly contested election six weeks away that pits a leftist
populist against a market-oriented heir to President Vicente Fox.




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"We want Mexico to look like Canada," said Stephen Haber, director of Stanford
University's Social Science History Institute and a Latin America specialist at the Hoover
Institution. "That's the optimal for the United States. We never talk about instability in
Canada. We're never concerned about a Canadian security problem. Because Canada is
wealthy and stable. It's so wealthy and stable we barely know it's there most of the time.
That's the optimal for Mexico: a wealthy and stable country."

What isn't wanted, Haber said, "is an unstable country on your border, especially an
unstable country that hates you."

Three-quarters of the estimated 12 million illegal migrants in the United States come
from Mexico and Central America. Mexicans make up 56 percent of the unauthorized
U.S. migrant population, according to the Pew Hispanic Center. Another 22 percent come
from elsewhere in Latin America, mainly Central America and the Andean countries.
These same countries send many of the half-million new illegal immigrants who arrive
each year.

Migration is profoundly altering Mexico and Central America. Entire rural communities
are nearly bereft of working-age men. The town of Tendeparacua, in the Mexican state of
Michoacan, had 6,000 residents in 1985, and now has 600, according to news reports. In
five Mexican states, the money migrants send home exceeds locally generated income,
one study found.

Last year, Mexico received a record $20 billion in remittances from migrant workers.
That is equal to Mexico's 2004 income from oil exports and dwarfing tourism revenue.

Arriving in small monthly transfers of $100 and $200, remittances have formed a vast
river of "migra-dollars" that now exceeds lending by multilateral development agencies
and foreign direct investment combined, according to the Inter-American Development
Bank.

The money Mexican migrants send home almost equals the U.S. foreign aid budget for
the entire world, said Arturo Valenzuela, director of the Center for Latin American
Studies at Georgetown University and former head of Inter-American Affairs at the
National Security Council during the Clinton administration.

"Where are we going to come up with $20 billion?" to ensure stability in Mexico,
Valenzuela asked at a recent conference. "Has anybody in the raging immigration debate
over the last few weeks thought, could it be good for the fundamental interests of the
United States ... to serve as something of a safety valve for those that can't be employed
in Mexico?"

Migration has caused significant social disruption in Mexico, though research is scant,
said B. Lindsay Lowell, director of policy studies at the Institute for the Study of
International Migration at Georgetown University.




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"We do know that it can break up families, and has done so in many traditional sending
areas," he said. "The husband comes to the United States and stays for many years. His
wife is on her own with the children. In some cases, the couple comes to the United
States and leaves their children behind with relatives."

The migration is driven in part, experts say, by the large income differentials between the
two nations. A rural Latin American migrant may earn 10 times in the United States what
he or she can earn at home.

But an equally intense pull comes from U.S. employers, including private households,
who employ large numbers of illegal immigrants as nannies, housekeepers and
caregivers, said Jeffery Passel, a senior demographer at the Pew Hispanic Center.

The U.S. information economy has created a split labor market, one with a powerful
demand for high- and low-skilled workers, economists say.

While U.S. professionals toil in office buildings, others come to clean their offices,
prepare their food and provide the host of services that support modern life. In a bygone
era, teenagers, women and rural U.S. migrants filled these jobs. The U.S. labor market
offers opportunities to "a younger, vibrant labor force and Mexican immigration has been
filling that void," said Armand Peschard-Sverdrup, director of the Mexico Project for the
Center for Strategic and International Studies.

U.S. demand has driven a record increase in wages for newly arrived immigrants, about
30 percent between 1994 and 2000, according to Lowell. The migration has also raised
average wages in Mexico by 8 to 9 percent, economists estimate. As the first U.S. Baby
Boomers turn 60 this year, this demand is only expected to intensify.

Once migration starts, social and economic networks sustain and fuel it, which explains
in part why flows have not fallen despite solid economic growth in Mexico.

Most illegal immigrants from Mexico and Central America have not completed high
school, although education levels are rising. Harvard economist George Borjas found that
in 2000, 63 percent of Mexican immigrants had not finished high school.

New immigrants are much more broadly dispersed than previous waves. A lower
percentage are going to the traditional magnet states such as California and New York.
The fastest-growing destinations for new arrivals, according to demographer William
Frey of the Brookings Institution, are North Carolina, Tennessee, Georgia, Nevada,
Arizona, Iowa and Nebraska.

This geographic dispersal may account in part for rising public discontent over
immigration, many believe. Migrant workers have also shifted from the fields to the
cities, working in hotels, restaurants and construction, where they are more visible to the
public.




                                                                                              3
Mexico is aging too, which will eventually cause migration to ebb. Its population trails
the U.S. age profile by 30 years. By then, demographers expect Mexico may be importing
labor.

While migration has long served as a safety valve for Mexico, the current wave may also
be hindering the political and economic reforms that most agree are needed -- in
education, taxes, energy, agriculture and law, where systemic corruption is a serious
barrier to growth.

"The good news is that a million Mexicans were on the street recently demanding good
jobs and good government and justice," Roger Noriega, former assistant secretary of state
for Western Hemisphere affairs, told a recent panel at the American Enterprise Institute.
"The bad news is they were marching in someone else's country. Every day, thousands of
Mexico's most industrious people leave their families behind ... leading many to wonder
why Mexico's political class is not capable of creating economic opportunity for its
citizens in a land rich in mineral wealth, hydrocarbons, agricultural potential and human
capital."

The United States is not the only country that shares a long land border with a poorer
nation. So does Germany, with Poland. France once did with Spain. Many point to
Europe's unification as a better way to integrate the North American economies without
disruptive migration flows.

Before the European Union opened its labor markets, its wealthier countries invested
billions of dollars to develop the economies of its poorer members -- at the time, Spain,
Portugal and Greece -- that had been sending migrants abroad. Since then, Spain has
become the economic engine of Europe, and this month opened its labor market to
Poland. The Irish, who once fled economic calamity by the millions to the United States,
are today having their gas pumped by Eastern Europeans.

Many contend that U.S. investment in Mexico would be less expensive and more
effective than a wall. Poorly developed Mexican credit markets make it all but impossible
for a low-income family to get a mortgage.

If, when the North American Free Trade Agreement was signed in 1994, "the United
States had approached Mexico and its integration into the North American economy in
the same way that the European Union approached Spain and Portugal in 1986, we
wouldn't have an immigration problem now," said Princeton University sociologist
Douglas Massey, co-director of the Mexican Migration Project, a survey of Mexican
migrants.

Given the predominance of Mexicans and Central Americans in illegal immigration to the
United States, Papademetriou wonders why the Senate's guest worker program would be
open to all comers, if it is intended to provide temporary workers for the U.S. market.




                                                                                         4
"If 60 percent of our illegal immigration comes from a single country, and another 20
percent comes through that country, logic would say the vast majority of visas should go
to the country of origin," he said. "The last thing you would do is create a global
temporary worker program, as if somehow we should need Bangladeshis or Russians to
pick our fruits and vegetables."

Targeted visas could also leverage Mexican cooperation in undertaking politically
difficult reforms, and would be more likely to keep guest workers temporary. "You keep
it a neighborhood project," Papademetriou said, "so you have people going back and
forth visiting their families, not spending thousands of dollars to come from all over the
Earth. People who already have a network in place that will support them in the United
States, that will help them find jobs."

Given that Mexico is the second-largest U.S. trading partner, the two nations' economic
integration is well under way, and labor is part of that, experts say.

Even a new wall -- already under construction on the border with Mexico with bits of
triple fencing here and pieces of National Guard units there -- has not stopped migrants
entering yet and probably works more to trap them in the United States, many believe.

"These are human beings," said Audrey Singer, an immigration expert at the Brookings
Institution. "It's not like a water faucet we can turn on and off. I think of managing them
better -- because it's very hard to stop them."

E-mail Carolyn Lochhead at clochhead@sfchronicle.com.


CHART (1):
Is entered in the Graphic Category and does not appear here.



CHART (2):

  Coming to the United States

   Immigration by decade in millions
                 Illegal
                 migrants
   1820s   0.1
   1830s   0.6
   1840s   1.7
   1850s   2.6
   1860s   2.3
   1870s   2.8
   1880s   5.2
   1890s   3.7
   1900s   9.0   0.2
   1910s   6.0   0.3



                                                                                              5
   1920s      4.1
   1930s      0.5
   1940s      1.0
   1950s      2.5
   1960s      3.8   0.5
   1970s      7.0   2.5
   1980s     10.0   4.0
   1990s     14.0   6.2
   2000s     16.0   6.5

  Due to changes in how immigrants have have been counted, these
figures
are approximations.


   -- Mexico to United States migration
   Average annual immigration in thousands


  '91      337
  '92      329
  '93      332
  '94      372
  '95      443
  '96      388
  '97      390
  '98      507
  '99      496
  '00      530
  '01      437
  '02      378
  '03      369
  '04      459

   Sources: Pew Hispanic Center, Yearbook of Immigration Statistics,
2004

Page A-8
THE IMMIGRATION DEBATE
Effect on economy depends on viewpoint

By Carolyn Said
Chronicle Staff Writer

Does illegal immigration help or hurt the U.S. economy?

It sounds like a simple enough question. But, like the classic Japanese movie
"Rashomon," in which truth depends entirely on point of view, the answer hinges on
where you fit in the economy.




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If you own a farm, a restaurant, a garment factory or a landscaping company, you're
likely to say immigration helps. Immigrants provide a ready source of relatively cheap
labor that keeps your business humming and elevates profits.

If you're an American-born high-school dropout seeking work, you're likely to say
immigration hurts. Immigrants are taking entry-level jobs at lower wages than you'd
accept.

The impact on other groups -- taxpayers, consumers -- is open to a variety of
interpretations. Each question about the impact of illegal immigration on the economy
has many answers, and those are often heavily influenced by ideology.

Q: What are the effects of illegal immigration on the overall U.S. economy?

A: There's no dispute that a larger pool of workers -- whether legal or illegal -- boosts
gross domestic product. More workers means more output. More people means more
consumers spending money on food, rent and a range of necessities and luxuries.

A better question is: How do immigrants affect the size of the economy per U.S.-born
citizen?

"GDP per domestic person goes up," said James Smith, a senior economist at the Rand
think tank in Santa Monica and lead author of the National Research Council's study
"The New Americans: Economic, Demographic and Fiscal Effects of Immigration."

Since 1980, he said, all immigrants, including both undocumented and legal, have
boosted GDP by $10 billion per year. "That's not to be sneezed at," he said. "On the other
hand, we have a $10 to $11 trillion economy" so proportionately, it's a small impact.

Q: How do illegal immigrants affect wages?

A: Some economists think undocumented workers drive down wages in low-skilled jobs.
Some say that the effect is minimal and that a larger pool of low-skilled workers attracts
new industries that can capitalize on them.

The most-cited study of immigrants hurting wages was published last year by Harvard
economists George Borjas and Lawrence Katz. They found that illegal Mexican
immigrants undercut wages for U.S.-born high school dropouts by 8.2 percent from 1980
through 2000.

"That's 40 cents an hour (less) as a result of 20 years of Mexican migration," said David
Card, an economics professor at UC Berkeley. "In the several studies I've done over
almost 20 years, if there are such effects (of lowering wages), they are very, very small."




                                                                                              7
His studies have compared cities with large immigrant populations to those with few or
no immigrants. He found that wage differentials between high-school dropouts and more-
educated workers were the same in cities, regardless of the size of immigrant population.

Hans Johnson, a demographer at the Public Policy Institute of California, thinks that
immigrants do affect wages, but only minimally. Moreover, other factors besides
immigration have undercut the market for low-skilled labor, he said. Those factors range
from the loss of union jobs to globalization, which has prompted manufacturing to move
offshore, and advances in technology, which require a more educated and experienced
workforce.

Q: Do illegal immigrants help create jobs?

A: Card is among the economists who think so. "The labor market can adjust," he said.
"It can increase in areas where there are a lot of unskilled immigrants. Employers can
move in who can support that."

For example, Card said, "20 years ago when I first moved to the U.S., only very rich
people had their lawns cut by someone else. The cost of hiring someone to do that got so
low because of the supply of landscapers and firms that specialized in hiring immigrants,
it created a sector of the economy that ... wasn't counted as part of GDP before."

Another growing field fueled by immigrant labor is home health aides. "If those
(immigrants) weren't here, most people would have their mothers and grandmothers
living with them. When that kind of labor is available, people will think of how to exploit
it," Card said.

Philip Martin, a professor of agricultural economics at UC Davis, said immigrants create
jobs in another way by becoming self-employed entrepreneurs.

"Immigrant-owned businesses are highly visible in many cities, where their restaurants,
dry-cleaning and tailoring establishments, and small stores are patronized by immigrants
and natives alike," he wrote in a paper for the Population Research Bureau.

Q: What are the effects of illegal immigration on prices?

A: The impact of immigration on prices is closely linked to its impact on wages. If
companies are paying lower wages, they can offer their products at lower prices. But
many experts say the differences are marginal.

"If you look at strawberries, they're picked right into the little plastic containers," said
Martin. "The farmers only get about 18 cents on the dollar for strawberries. If (the
consumer) spends $1 on a pint of strawberries, the farmer's getting 18 cents. He gives
about one-third of that to farmworkers, so they make 6 cents." So even if the labor cost
were to double, that would still only be a 6 cent increase per pint.




                                                                                               8
Martin's estimate is that if the immigration influx -- currently a net of about 500,000
people per year -- were cut by 40 percent, the average American family would wind up
spending about 2.5 percent more on fresh fruits and vegetables.

Q: How would fewer immigrants affect business?

A: Some economists, including Card, think that if the supply of low-cost immigrant labor
dried up, certain industries would disappear or move.

"A lot of strawberries grown in Monterey County could be grown in Mexico," he said. "If
wages got too high because it became too hard to find workers if the temporary work
quotas were too low, you'd see a lot of those things close down."

Q: What are the effects of illegal immigration on taxpayers?

A: This is the biggest bone of contention.

Some analysts say that, since immigrants are young, they contribute more through taxes
than they consume in government services. That's especially true, they maintain, because
illegal immigrants cannot collect many public benefits, such as welfare and
unemployment. On the other hand, being young also means that immigrants tend to have
children who attend public schools. If the immigrants are low income, as most
undocumented workers are, they pay modest taxes, so their children's education is a net
cost to taxpayers.

Hispanic immigrant households in California each received $5,000 more in federal, state
and local services than they paid in taxes in 1996, according to Smith's NRC study.
Public school accounted for the bulk of the disparity.

While those numbers sound compelling, Martin points out that there is a forceful rebuttal.

"Immigrants' kids will wind up being the taxpayers of tomorrow," he said. "Therefore
you can say, you should treat the most expensive single item, education (for immigrants'
children), as an investment in tomorrow's workforce."

Groups opposed to amnesty programs for immigrants say that while they would generate
more taxes by reducing off-the-books labor, they would allow more immigrants to
receive more forms of public assistance, resulting in a bigger net deficit for the
government.

Another twist is that immigrants' taxes largely go to the federal treasury as income tax
and Social Security payments. By some estimates, about half of undocumented workers
use fake Social Security numbers, allowing taxes to be withheld from their paychecks.
But the services immigrants consume, such as education and health care, most often
come out of state and local budgets.




                                                                                           9
A recent analysis by investment research firm Standard & Poor's found that the Social
Security Administration receives about $7 billion a year in payroll taxes that can't be
linked to valid names. S&P presumed that most of those funds come from undocumented
workers. If that money were diverted to state and local governments, it would pay about
half of the education costs for undocumented workers' children, S&P said.

Q: Who directly benefits?

A: The main beneficiaries of illegal immigration are the immigrants themselves. They've
already voted with their feet by coming here in pursuit of the American dream.

Secondarily, the companies and people who hire them benefit. From meatpacking to
construction to agriculture, undocumented workers provide a ready source of relatively
cheap labor. Prosperous Americans also benefit because many of them directly hire
undocumented aliens for jobs such as nannies, gardeners and housecleaners.

Q: Who directly loses?

A: The biggest losers are the previous wave of immigrants, economists say. That's
because they're competing for the same jobs. A larger pool of labor means that they're
less likely to gain wage increases.

The next category is native-born U.S. workers with little education or experience. While
the question of whether immigrants depress their wages remains open, it is certain that
immigrants increase competition for low-wage jobs.

Finally, there are taxpayers as a whole. Here is where ideology determines one's view:
Are immigrants a net drain on resources and government services, or an essential
resource that helps businesses thrive and supplies tomorrow's workforce?

Even experts in the field say that financial analysis alone misses the big picture.

"The reality of the immigration debate is it's nothing to do with economic impact," Card
said. "That's just a smoke screen. It's all about cultural protectionism and fear of change."

Martin said many pro-and-con immigration arguments are overblown.

"Immigrants are not going to be the economic salvation of a country, but they're not
going to be the road to hell either," he said.

E-mail Carolyn Said at csaid@sfchronicle.com.




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