We have all heard the age-old narrative: America is the land of hope and opportunity, and there is only so much hope and opportunity to go around. Thus, there are hoards of immigrants from Mexico constantly trying to sneak over our border and steal our jobs. Their economy is a mess and their country is run by drug cartels, so they come running to our homeland to get a slice of the “American dream.” Mexico is like a house on fire, and we are the neighbors who are forced to feed, clothe and care for the refugees who barge into our home.
This “burning house” model makes sense on a fourth grade level and to the average American who does not have the desire or the patience to study economics extensively, it must be delightfully fulfilling. It is simple to understand, easy to explain and, for the most part, completely wrong.
While Mexico is certainly poorer than the United States, the connection between poverty and immigration is not as well-established. For most of the two countries’ histories, the United States has been the richer country. Yet until 1970, immigration from Mexico was not nearly as significant as immigration from Europe. Indeed, between 1970 and 1980, immigration from Mexico almost tripled according to the U.S. Census Bureau. In the following decade (1980 – 1990), immigration from Mexico increased twofold.
If the classic narrative from above is true, then what should we expect the economies of the U.S. and Mexico were doing during these decades? Since Mexicans were swarming into the U.S. by record numbers, we would assume that Mexico was experiencing a massive recession, while the U.S. was experiencing a gigantic expansion. It fits the typical argument of those that are “tough on immigration.”
You may find it surprising then, to discover that the Mexican economy has consistently outperformed the U.S. economy for most of the past 40 years, according to the University of Pennsylvania. Specifically, in the decade of 1970-1980, when immigration from Mexico tripled, the Mexican economy grew at an annual rate of between 5 and 20 percent.
Then in the following decade when growth slowed to less than 10 percent per year, immigration from Mexico only doubled. Even today, the Mexican economy is growing at a rate of approximately 5.5 percent per year, while the US economy has been limping along at a one to two percent growth rate.
Mexico has one of the fastest growing economies in the world, and according to Goldman Sachs, they will likely be the fifth largest economy in the world by 2050. This does not fit the “burning house” model at all. In reality, people seem to be running into the burning house instead of running out of it. In fact, history teaches us that this is the norm, not the exception.
Historian David M. Kennedy noted in his piece, “Can we still afford to be a nation of immigrants?” which was published in “The Atlantic,” that there is a much more successful model for immigration. This model answers the question of why Mexican immigration to the U.S. was mild until 1970, and then why it blew up in the following decades.
Kennedy traces a line from where industrialization begins, in 18th century England, to where it is currently taking place in the world today, in countries such as Mexico. With each new country that is touched by the Industrial Revolution, there is always a corresponding increase to both emigration to other countries as well as movement of people from the rural areas to newly formed urban areas.
Kennedy cites that in Mexico, migration into Mexico City has been double the immigration into the United States. This would indicate that immigration from Mexico to the United States is merely a side effect of the much bigger picture of industrialization. Even though Mexico has always been poorer than the United States, it was not until Mexico began to industrialize and experience rapid economic growth that a significant portion of their population was displaced and willing to move to the United States.
If this theory holds true, then just as every other immigrant group before them, Latin American immigration will eventually dwindle as new immigrants travel to the United States. Already, growth in immigration from Africa has been significant as the continent begins to develop economically.
But what will happen when the immigration stops? Once the wave of immigration from Africa has finished, where will the next wave of immigrants come from? Considering how important immigration is to the heart of the U.S. economy, it is definitely a concern for America’s long-term future.