Matt Zeitlin: Impetuous Young Whippersnapper

Jeff Faux suggests in his American Prospect article titled “What To Really Do About Immigration” that the US make some moves towards improving the Mexican economy so to reduce the need for out migration. What’s unfortunate is that Faux frames the large presence of Mexican immigrants as a problem that needs to be dealt with in the first place. Why, exactly, is out migration from a corrupt country with poor institutions a bad thing? Sure, out-migration may be a “safety-valve” for Mexican elites to forestall reforms, but shouldn’t we want poor Mexicans to get out through that safety valve?

He says gloomily, “A November 2007 Mexican government report concluded that even if the overall economy grows steadily, low wages and social inequality will continue to generate heavy out-migration to the U.S. at the current annual rate of roughly 500,000 — for the next 15 years!” Well, isn’t that how markets are supposed to work? Mexico’s economy can’t generate enough jobs for their growing population, so a large number of people get jobs in the United States. If out-migration is actually going to be so high for so many years, the demand for labor within Mexico should go up to incentivizes some workers to stay, but that will only happen if we encourage as much out-migration as the market is currently demanding. In short, the best immigration policy is to Let Their People Come.

What? Did I just mention Lant Pritchett? Oh yes I did. Did you really think we were going to have a discussion of migration without him? Silly you. The main focus of Pritchett’s research has been looking at ghost and zombie countries. What he means is that when a country faces a large shock to their economy, it can become a “ghost.” For example, mining towns in the Wild West, after running out of gold, quickly became empty. The ghosting phenomenon is a desired one, or at least preferable to the alternative — zombies. A zombie is a country that suffers a negative shock which dictates that it’s optimal population should fall, but because of restrictions on labor mobility, the population stays high and wages fall. So, if a country like Mexico has poor institutions and thus can not provide for its citizens, then by all means, we should be encouraging that as many exit as can find work in other countries.

Faux’s alternative is that the US try to somehow coddle Mexican elites into turning their country into a south south-of-the-border Sweden, with perfect institutions for generating job growth and economic security. But I don’t really want to wait for the US to cajole Mexico into ” guaranteeing free trade unions, enforceable minimum wages, and an increase in education, and other social spending”, renegotiate NAFTA and invest 100 billion dollars into Mexico. Quite simply, I see no reason to lock Mexicans into their poor country while we try to improve into a better one. I think the 4.5 times wage multiplication for a Mexican who works in the United States is a more immediate and effective stimulus to the wealth of Mexicans as opposed to some complicated, expensive plan to invigorate Mexico’s economy. Let Their People Come.