We Need Less Low-Skill Labor, Not More

Symbolism is important in politics, and the fact that President Bush chose Mexico for his first foreign visit says a lot. Mexico holds the potential to be one of our most promising foreign relationships or one of our biggest headaches. Bush is wise to put it at the top of his foreign policy agenda.

On the bright side, with the election of Vicente Fox as president, Mexico has freed itself of the yoke of 70 years of corrupt one-party rule. Fox has his work cut out for him, and it would be unrealistic of Americans or Mexicans to expect that he will turn the country around overnight. But significant progress can be made. Mexico also is emerging from the severe economic crisis of the early 1990s and is certain to be an even more important U.S. trading partner in the future.

The danger looms in the belief that there is a shortcut to the type of reform that needs to occur in Mexico. Presidents Fox and Bush, as well as many leading congressional Republicans, seem to believe that we can move immediately from where we are now to a fully integrated North American economic and labor market. While that is a laudable long-term goal, rushing from point A to point Z could prove disastrous.

High on Fox’s agenda is freer access for Mexican workers to the U.S. labor market. While this may seem to be a good idea given Mexico’s worker excess and our tight labor market, it is a sure-fire prescription for getting us right back where we started. Historically, the idea of a U.S. “safety valve” for excess Mexican labor has not really benefited either country.

The ability to export disgruntled workers has impeded the kinds of economic and social reforms that Mexico so desperately needs. So long as the entrenched interests in Mexico believe that they can always ship their problems north, there will be no urgency to change the status quo. And so long as the status quo prevails, Mexico will remain a marginal Third World economy rather than the emerging economic power it has the potential of being. In today’s economy, no country can succeed if its primary exports are raw materials, manpower and brain power.

From the U.S. perspective, importing large numbers of Mexican workers, even temporarily, is a long-term drag on our economy. Some sectors of our economy want the kind of low-cost, unskilled labor that Mexico can provide, but satisfying those desires will come at a heavy cost. We need less unskilled labor, not more. Imported unskilled labor has allowed nonviable industries like the garment industry to hang on for a few more years, impeded investment in mechanization in vital industries such as agriculture and shifted costs in many sectors of the service industry. Today’s economic reality is that low-wage jobs in the United States must be heavily subsidized by taxpayers--in payments for education, health care and other human services.

In addition to creating an economic drag, a policy of importing unskilled labor is a social time bomb. Economists and social scientist are rightly concerned about the impact of the widening wealth and income gap in the U.S. It is a problem not made easier by policies that drive down the price of labor for those unskilled and low-skilled jobs that remain.

The meeting between Fox and Bush was the first step in a process that ultimately will determine whether these new leaders are politicians or statesmen. As politicians, they are apt to satisfy the short-term interests looking for an easy answer to Mexico’s labor surplus and the desire of some American businesses to gain access to that labor. As statesmen, they will opt for long-term economic and social reforms and capital investment that will satisfy the aspirations of Mexican workers in Mexico and not burden the U.S. economy with massive numbers of new unskilled labor.