Shannon K. O'Neil

Latin America's Moment

O'Neil analyzes developments in Latin America and U.S. relations in the region.

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High Tide for Mexican Immigration

by Shannon K. O'Neil
April 6, 2007

I wrote an op-ed for the Los Angeles Times yesterday that has received a fairly strong response (you can find it here).

Many responders – understandably – concentrate on the current effects of illegal immigration: the problem of undocumented migrants for U.S. security, the pressures on schools and other services in areas with heavy migration, and the effects of these new entrants to the labor market on the opportunities for lower skilled Americans.

All of these issues are incredibly important, and are key elements of the national debate on immigration now occurring. But as we discuss these immediate issues, we also need to be considering the medium to longer term dynamics of the labor markets on both sides of the U.S.-Mexican border. There are huge demographic shifts occurring in both of our countries, which will have significant repercussions for labor supply and labor demand, and for immigration, in the coming years.

The U.S. population is rapidly aging, and the first baby boomers are reaching retirement age. Over the next two decades, many will leave the workforce. Many will also need increased health care and living assistance – creating new jobs. The next U.S. generation – Generation X – is much smaller. With fewer native Americans entering an expanding job market (assuming our economy continues to grow), migrants will be needed to fill jobs.

Mexico too has an aging population. While in the 1990s one million new workers entered the working population each year, that number has recently fallen to 500,000. While still a challenge, the Mexican economy will better be able to absorb this smaller number going forward. In the coming ten to twenty years, significant labor surpluses among the young (those most likely to migrate) will decline.

The point is that labor supply and labor demand between our two countries is not a static relationship. It is in fact changing right now. As the nation debates immigration reform, we need to consider these dynamics, and their medium and long term effects. Otherwise, we will potentially be yet again fundamentally revising our immigration policy in just ten or twenty years, as the effects of current demographic shifts materialize.

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