WSJ: Smaller Families In Mexico May Stir U.S. Job Market

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April 28, 2006

Smaller Families In Mexico May Stir U.S. Job Market

Some See Slower Migration Of Low-Skilled Workers; Making It to Middle Class

The Llaneses Stay in Mexicali
By JUNE KRONHOLZ in Washington and JOHN LYONS in Mexicali, Mexico
Staff Reporters of THE WALL STREET JOURNAL
April 28, 2006; Page A1

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Thanks to a decades-long family-planning campaign, most Mexicans are having far fewer children than was typical a generation ago... This sweeping demographic shift has fostered hope that someday Mexico will produce a healthy middle class of people. Mexico's new demographics could have a big impact on the U.S. Although the flood of Mexicans heading north is whipping up debate in Washington, the crossings may slow in future decades. That could happen simply because smaller families limit the pool of potential migrants. A slowdown would be especially likely if a growing middle class makes more Mexicans comfortable at home and averse to risking a dash across the border. A reduction in the supply of cheap Mexican labor would be sure to have ripple effects on the U.S. economy. It could raise costs for employers as they searched for immigrant labor from more distant places such as Asia. If, as some contend, the current flood of immigrants is hurting lower-skilled native-born Americans, the easing of the flood might help them.

Currently an estimated 459,000 Mexicans come to the U.S. each year, according to the Pew Hispanic Center in Washington, most of them younger people looking for low-skilled work. That reflects Mexico's demographics: There are millions of Mexicans in their 20s and 30s born to big families that had no means to support education. The median age of Mexico's 107 million people is 25, meaning half are older than that age and half are younger. In the U.S., the median is 36. But the Population Division of the United Nations predicts that by 2050, the situation will be reversed: Mexico's median age will rise to 42, while the U.S. will rise to 41.

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Mexico's large working-age population means it should have more tax revenue to spend on job training, infrastructure such as power and transportation, and a social-security system. But it could miss the opportunity. Currently taxes are low and many rich people evade them. The public-education system is weak and the poor often inherit the low-wage jobs of their parents. If an aging Mexico stagnates, the drive to emigrate to the U.S. may grow stronger than ever. And U.S. companies that hope a boom in Mexico's middle class will boost purchases of American goods would be disappointed.

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In the shorter term, however, economic development may fuel immigration by giving would-be migrants the cash to cross the border. The Pew Hispanic Center says many Mexicans move to the U.S. not because they are jobless but because they want a better job than the one they have. Its polls show that 49% of Mexican adults would move to the U.S. if they could. The Mexican government's most optimistic forecast still puts migration at almost 400,000 a year for the next 25 years -- and more than 500,000 if things go badly with the Mexican economy. In part that's because inland farming states that send the most workers to the U.S. are likely to be the last to share in any new prosperity.

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In another few decades Mexico will have the same kind of aging society as developed nations do today, but it is ill-prepared for it. The pension system for state workers faces a shortfall. Private employers are required to contribute to a pension system but about half the work force is working off the books. These people have little chance of a comfortable pension. If Mexico doesn't build a nationwide pension system, "coming to the U.S. is your social security," says Steve Camarota, a demographer at the Center for Immigration Studies, a Washington research group that advocates less immigration.

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URL for this article:
http://online.wsj.com/article/SB114618828786138329.html (subscription)