A Marshall Plan for Mexico

A lesson from Europe's big spenders on how to stop immigration.

Published May 8, 2006 11:43PM (EDT)

The Wall Street Journal published a perplexing article on Monday, the kind of story that purports to offer a contrarian take on conventional wisdom but then ends up completely undermining its own thesis by the end.

The conventional wisdom: Rising levels of prosperity in poor countries will ease the flow of emigration from those nations.

The Wall Street Journal's Joel Millman: Not so fast -- evidence shows that economic growth may actually lead to more emigration, as workers learn skills that are more highly valued abroad, and are able to earn enough money to ease their passage, legally or illegally, to richer countries.

So, in the case of Mexico, the quickly growing "maquiladora" border region is transforming into a kind of training camp for laborers who acquire some skills and some cash and then head north.

But "Prosperity in Home Countries May Not Stem Tide of Migrants to the U.S." does a pretty good job of shooting down its own thesis. First, Millman notes, prosperity does not occur in a vacuum. Relative prosperity is what counts. Wages have grown in Mexico since 1994, but wages in the United States have grown faster. And as long as that wage gap exists, and indeed, increases, the North will suck labor from the South, no matter how many politicians fulminate.

Second, Millman notes that, ultimately, enough prosperity actually will stem the tide. If Mexico achieved rough parity with the U.S. undocumented migration would undoubtedly decrease. Granted, there's quite a long way to go before Mexico comes anywhere close to U.S. living standards, but that doesn't mean it's impossible. Millman notes, at the tail end of the article, that before Spain, Greece, and Portugal joined the European Community they were the biggest "sender" nations in Europe. But after "rich" Europe poured billions of dollars into public-construction projects in the poor countries, living standards converged, and emigration slowed to a trickle.

I've discussed the European Union example here before a couple of times, and Millman's reference to this latter-day Marshall Plan inspired me to dig up some more information. I struck gold with "Towards a North American Community" by American University professor Robert Pastor, which devotes a chapter to studying how the E.U. helped Spain, Ireland, Greece and Portugal achieve significantly higher economic growth. That in turn led me to a report written by Pastor in 2005: "A Proposal for a North American Investment Fund: Adapting Europe's Model and Avoiding Its Mistakes."

Free trade agreements are not enough. Trade between Mexico and the U.S. has boomed since the passage of NAFTA, but economic growth in Mexico has been nothing to shout about, and the relative position of Mexico vis-à-vis the U.S. and Canada hasn't budged -- it's gotten worse. Pastor crunches the numbers and declares that only a significant flow of foreign investment into infrastructure and education in Mexico will make a difference. And he wonders, if Europe's rich countries could make the commitment to pump $35 billion into their poorer neighbors, why can't we come up with a lousy $20 billion?

"The premise of the European Community was that its people shared fundamental interests, and therefore progress should be measured in terms of lifting the entire community in a fair and equitable manner," writes Pastor. "'Imbalances,' the E.C. report on cohesion writes, 'do not just imply a poorer quality of life for the most disadvantaged regions ... [but also] an underutilisation of human potential and a failure to take advantage of economic opportunities which could benefit the Union as a whole.' The operational definition of 'economic cohesion' was convergence of basic incomes, rates of employment, and competitiveness. 'Social cohesion' could be measured in universal systems of social protection and mutual support. This would mean a reduction of the incidence of poverty and improvements in productivity and the quality of life."

Whoa, sounds like some pie-in-the-sky big-spending liberalism there, doesn't it? But chew on this. Mexico right now is at about the stage that Portugal and Spain were when they joined the European Union.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Globalization How The World Works Immigration Latin America Mexico