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Nafta, Migration and Labor: An Assessment — Philip Martin

Nafta, Migration and Labor: An Assessment

Philip Martin—plmartin@ucdavis.edu

http://martin.ucdavis.edu

December, 2002

Highlights
Mexico's population doubled between 1970 and 2000, from 53 million to 100 million; the number of Mexican-born US residents increased 10-fold, from less than 800,000 to about 8.5 million. Mexicans pioneered the now "normal" way to immigrate to the US—arrive in another status, usually unauthorized, and adjust to immigrant status in the US.[1]

Mexico lacks good or formal sector jobs: 40 percent of Mexicans in the Mexican labor force have formal sector jobs, meaning they are covered by minimum wage, pension, and other labor laws, versus 90 percent of US workers. There were about 21 million Mexicans with formal sector jobs in 2000—15 million in Mexico, and 6 million or almost 30 percent in the US.

Policy makes a difference. US legalization in 1987-88 helped to diffuse Mexican workers throughout the US. Economic and job growth in Mexico and the US in this decade, plus US and Mexican policies toward migration, will help to determine how fast the Mexican-born US population rises.

Population and Labor Trends
Mexico is a family planning success story. In 1972, Mexico had a had a total fertility rate of 6.2, and the population was growing 3.5 percent a year, the fastest population growth rate in the world. In 2000, the Mexican population growth rate is 2.1 percent. Slower population growth reduces Mexico-US migration in two ways—fewer children mean fewer potential migrants, and families with fewer children tend to invest more in the health and education of each child, which reduces the probability of emigration.

Legalization in 1987-88 helped to spread Mexican-born workers throughout the US, and the job boom of the late 1990s drew more Mexicans north. US nonfarm payroll employment was 131 million in 2001, reflecting several years of very rapid growth: +4 million in 1995-96 and +3 million a year between 1997 and 2000—3 million net new jobs means an additional 10,000 per work day. The late 1990s in the US labor market were marked by rapid job growth, low unemployment, and slowing rising wages. US immigration, labor, and other policies.

In 2000, about 40 percent of Mexican residents (versus 50 percent of US residents), were in the labor force, and 15 million of the 40 million Mexicans in the labor force had formal-sector jobs, that is, they were members of the Mexican social security system, IMSS. The US, by contrast, had about 125 million workers with nonfarm payroll jobs, including about 6 million filled by Mexican-born workers.

Nafta, Policy, Migration, and Labor
During the late 1990s, changes in Mexican farm policies helped to speed up the flight from the land in Mexico, just as the US economy created millions of jobs that could be filled by Mexican migrants. US and Mexican discussions of a new guest worker and legalization undoubtedly encouraged some Mexicans to enter the US, since the experience of the past 80 years is that the best way to benefit from a change in US immigration policy is to be illegally in the US.

Mexico's economic and job growth path has been neither smooth nor straight. In 2000, Mexico's GDP expanded by almost 7 percent, and IMSS members or formal sector jobs expanded by over 600,000, but in 2001, Mexican GDP shrank slightly, and the number of IMSS members fell.

Naftabrought previously "distant neighbors" much closer together. However, this economic integration has speeded up the flight from the land in Mexico, and the rural exodus is expected to rise again in 2003, when there is free trade in all farm commodities except corn, dairy and sugar (all farm trade barriers disappear in 2008).

Further Reading
Binational Study on Migration. 1997. Migration between Mexico and the United States. Washington and Mexico City. Commission on Immigration Reform. //migration.ucdavis.edu/mn/cir/cir.html

Martin, Philip L. 1993. Trade and Migration: NAFTA and Agriculture. Washington: DC: Institute for International Economics. October. http://www.iie.com/

Migration News. Monthly. //migration.ucdavis.edu/

Mexico and US Population and Labor Force, 1970-2000


Mexico
US

Population (Mils)-1970
53
203

Labor Force (Mils)-1970
15
83

% of population
28%
41%

Population (Mils)-2000
100
281

Labor Force (Mils) 2000
40
141

% of population
40%
50%

Labor Force Increase
167%
70%

Employment-2000

Formal Sector Jobs (Mils)
15
125

Filled by Mexicans
15
6

Employed in Ag (Mils)
6
3

Filled by Mexicans
6
2

Population (Mils)-2050
151
414

Labor Force (Mils) 2050
70
207

% of population
46%
50%

Labor Force Increase
174%
146%

Sources: US Census and Conapo, 2050 projections from PRB; IMSS

Mexican Labor Force and IMSS Jobs, 1981-2001(000)

Labor Force
IMSS

Labor Force
IMSS
US Payroll


1981
22,861
6,247

Change
Change
Employment
Change

1982
23,692
7,033
1982
830
786
91,003
-555

1983
24,521
7,014
1983
829
-19
90,448
-1,622

1984
25,359
7,129
1984
838
115
88,826
3,698

1985
26,217
7,603
1985
858
474
92,524
3,725

1986
27,079
8,086
1986
862
483
96,249
2,350

1987
27,954
7,901
1987
875
-185
98,599
1,944

1988
28,842
8,734
1988
888
833
100,543
3,080

1989
29,752
9,347
1989
910
613
103,623
3,370

1990
30,669
9,825
1990
917
478
106,993
1,953

1991
31,636
10,654
1991
968
829
108,946
-187

1992
32,622
11,235
1992
985
581
108,759
-675

1993
33,616
11,232
1993
994
-3
108,084
1,418

1994
34,636
11,218
1994
1,020
-14
109,502
2,800

1995
35,674
11,418
1995
1,038
200
112,302
3,933

1996
36,609
10,919
1996
935
-499
116,235
1,796

1997
37,526
11,913
1997
917
994
118,031
3,064

1998
38,443
12,732
1998
916
819
121,095
3,434

1999
39,378
13,678
1999
935
946
124,529
2,907

2000
40,352
14,558
2000
974
880
127,436
3,292

2001
41,317
15,188
2001
965
630
130,728
1,654

1987-94
6,683
3,317

10,903


1994-01
6,681
3,970

21,226


1994-96

-3%

2,994
-313
6%
8,529

1997-2001

39%

4,707
4,269
12%
14,351

1994-01 change
35%

19%


Source: World Bank and IMSS

OECD Data on North American Labor Markets: 1991-2001

Canada
Mexico
US

Total Labor Force
1991
14,438
30,144
126,867

Total Labor Force
1996
14,964
35,438
135,231

Total Labor Force
2001
16,300
38,773
143,006

1991-96 change

4%
18%
7%

1996-01 change

9%
9%
6%

Total Employment
1991
12,929
29,226
119,282

Total Employment
1996
13,527
33,896
128,000

Total Employment
2001
15,130
37,945
136,264

1991-96 change

5%
16%
7%

1996-01 change

12%
12%
6%

Ag Employment
1991
567
7,532
3,429

Ag Employment
1996
540
7,312
3,570

Ag Employment
2001
435
6,695
3,277

1991-96 change

-5%
-3%
4%

1996-01 change

-19%
-8%
-8%

Indus Employment
1991
2,949
6,817
29,753

Indus Employment
1996
2,941
7,712
30,215

Indus Employment
2001
3,428
9,850
30,202

1991-96 change

0%
13%
2%

1996-01 change

17%
28%
0%

Sers Employment
1991
9,335
14,877
84,536

Sers Employment
1996
9,982
18,872
92,923

Sers Employment
2001
11,214
21,400
101,594

1991-96 change

7%
27%
10%

1996-01 change

12%
13%
9%

Source: OECD Labor Force Statistics, 2002

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[1] In FY 2000, the US admitted 850,000 immigrants, inlcuding 442,000 or 52 percent who were already in the US and adjusted their status. The US admitted 174,000 Mexican immigrants, and 105,000 or 60 percent were already in the US, including 90 percent who had entered without inspection or were in an "other" status. INS Statistical Yearbook, Tables 7 and 10.