TCS Daily

Getting Mexico on Our Side

By James D. Miller - April 4, 2006 12:00 AM

Ideally, Mexico would help us police our shared border. But Mexico receives huge remittances from its citizens unlawfully working in the U.S., so it's currently in Mexico's interest to promote illegal immigration. A well-designed guest worker program, however, could change this and turn Mexico into a U.S. immigration ally.

President Bush has proposed creating a guest worker program in which many Mexicans would have the legal right to work temporarily in the U.S. Unfortunately, even with Bush's program in place Mexico would still encourage its people to work illegally in the U.S. and send home some of their pay.

So instead we should create a guest worker program under which the number of legal Mexican guest workers is based on the number of illegal Mexican immigrants in the U.S. For example, for every additional illegal Mexican immigrant who enters the U.S., the number of Mexican guest worker slots could be reduced by two. Under this plan, Mexico has an incentive to reduce illegal immigration into our country.

Accurately determining the number of illegal Mexican immigrants is one obvious problem with my proposal. Each year, however, an independent commission could estimate the number of Mexican illegal immigrants. The law could then automatically use this estimate to calculate the size of our guest worker program.

Alternatively, the size of the guest worker program could be determined by hard data. Perhaps for every person the U.S. border agents catch illegally crossing the border, the number of Mexican guest workers could be reduced by three. Or maybe for every kilogram of cocaine police confiscate from smugglers crossing the U.S./Mexican border the number of guest workers could be reduced by ten. Under either approach, the Mexican government would have a strong incentive to reduce illegal border crossings.

We could sell the plan to Mexico by making it seem as if we are rewarding good behavior, not punishing bad conduct. We would offer them a small number of guest worker positions and agree to increase the number if certain objective criteria were met. We could claim that only if these criteria are satisfied could we afford to allow in additional guest workers.

If my plan is too bold for politicians to implement, the U.S. could use subtler means of obtaining Mexican immigration cooperation. For example, all the guest workers could pay into a pension plan. After the workers retired and returned to Mexico they would start receiving benefits. But money from the pension plan would be used to pay a fraction of the health care costs of treating illegal Mexican immigrants. Consequently, the more illegal immigrants, the less pension money for Mexico.

James D. Miller writes "The Game Theorist" column for TCS and is the author of Game Theory at Work.



One more suggestion
Here's an incentive you didn't mention:

Stop our agricultural subsidies that have destroyed several million Mexican jobs. We have broken the backs of small farmers down there by slipping rules into NAFTA that allow commodity dumping. They can't compete, and have to come here to seek work.

You'll find that the Mexican industrial and urban economies are doing just fine, and no one from those sectors is moving to your town. It's all the country boys from the rural areas, who can no longer find a living on the farm now that tortillas come from the US.

Good to see somebody with a plan
Positive incentives are the only form of coersion that works in life as far as I can tell. Only problem I see with this plan is that it creates a de facto "master/servant" type relationship with Mexico which very much goes against their "machissmo" attitude.
I like the pension idea. Something similiar was in place with the Bracero progam in the 50's--only problem was that most of the money never made it into the pockets of those that earned it do to shoddy bookkeeping and corruption. Surely the bookeeping has improved in the last 50 years. I have a feeling the corruption part has not. As long as the US Dollar continues to provide as much utility as it does in Mexico, we're always going to have an illegal immigration issue.

who knew?
While I believe agricultural subsidies have reached absurd proportions (wintess Charles Schwab's $700k agricultural subsidy to grow rice on his hunting reserve in CA), to simply blame Mexico's deep, structural flaws on our farm subsidies is dishonest. Especially since the avocados, asparagus and tomatoes I buy at Safeway are grown in Baja California. Odd, since the Central Valley is a heckuvalot closer to my frontdoor.

Hit it right on the head
Mexico is our poor southern neighbor, we should be buying agricultural products from them, its what the free market wants to happen. Subsidizing agriculture in the US causes these distortions and more. They say they're helping mom and pop farmer but its mostly helping ADM and their kind. So while food is cheaper than it otherwise would have been, general taxes are much higher. Higher to pay the subsidy, higher to pay for the public services that displaced mexican farm workers consume when they come to American agribusiness.

I was originally going to say I liked the idea of authors feedback incentive process to give Mexico an incentive. I was going to suggest something similar as a penalty to those employing illegals, say 10X or 100X the savings they get by breaking the law. You could set up a self supporting agency that is funded by fines on business that break our immigration laws. Perhaps a bounty for turning in law breakers. Fining the illegals themselves is kind of silly, they don't have a verifiable identity or any money, thats why they're here.

And for the other guy that commented about getting food from Mexico- hey I live 20 miles from the border and my avocados come from central California, cost $2 each thanks to the California Avocado Growers Association collusion (how is this legal?). In Mexico they cost 10 for $2.

Mexican avocado exports can now enter the United States

February 13, 1998


Mexico is expected to export between 10,000 and 15,000 tons (valued at $10 to $15 million) of fresh avocados to the United States in 1997/98. It is not clear whether U.S. demand will increase to absorb these imports or if they will take market share from U.S. producers or other foreign suppliers. In 1996/97, U.S. fresh avocado imports accounted for about 12 percent of total U.S. consumption.

Why not include Mexico into "The Plan" clear down to the Central American boarder! For "The Plan" go to and read Pnac!

Subsidies and displacement
Let's not look at "Mexico" as being one monolithic entity, that either benefits or suffers in toto. Instead, note that it comprises many millions of people.

Those who work in the produce fields of Balsas, Hermosillo and a number of other northern areas benefit from sales to the US. In fact, overall there is a healthy positive balance of trade in Mexico's favor.

Those who've made their livings as independent small farmers, on the other hand, have seen wholesale disaster strike as their products are undercut by American agribusiness, due to dumping. Those are the millions of people who've had to come north in order to put food on the family table.

It's hardly a structural flaw to have decided that a priority for Mexico is to retain a healthy small farm sector. They've done marvelously well in new job creation-- but they can't just snap their fingers and double the number of city jobs overnight. Thus, we have people coming here to look for honest work.

Avocado sales
Right. We don't have to buy California avocados here in the east. They are available, but cost double what the Mexican ones do.

It's different out in Californ-eye-ay. The government there is heavily protectionist in ag commodities-- particularly things like pistachios and raisins. The growers have a powerful lobby, and trade barriers impede market forces. If you want to make a case against classic socialist trade constraints, California is the perfect example to use.

interesting perspective
Well said. But by that same measure then small family farms in the USA are just as victimized by agribusiness as you claim the small family farms in Mexico are, for they are disappearing as well. However, I have yet to see any evidence that those American families are moving north or south of the border in order to put food on the table; which leads me to believe the difference is in the lack of civic infrastructure, lack of a strong social safety net and a scarcity of alternate opportunities in Mexico--all if which is maintained by a culture of status quo corruption.
Mexico has had ~70 years since the end of the Revolution to get their act together. Many large tracts of privately owned property were confiscated and re-distributed as government-owned ejido land with the good intention of letting the people work the land and earn their living. Look and see what is happening with ejido land today. It is being subdivided, titled and sold. The reason this is happening is that enough of it sat idle for a long enough time that the government realized it was under-utilized. You may argue this was mandated by NAFTA (which it was) but the fact that Mexico allowed it to happen speaks volumes. Better to sell it than let it sit idle.
This fact cannot be blamed on American Agribusiness, which is why I originally said your post was dishonest.

Family farm displacement
A fair enough comment to make. In fact several million family farmers were put out of business, mostly back in the eighties when big agribusiness bought them up. What did the trick back then was the huge operating costs inherent in modern farming. One bad year and those quarter million dollar loans drove farmers into bankruptcy. ConAgra, ADM and the like bought their places up for pennies on the dollar in many instances.

And the dispossessed looked for work on the American job market, just like the Mexicans did a dozen years later. Face it, Mexico is stuffed full of young families. They are industrializing wonderfully well, but can't begin to create nearly enough new jobs to soak up several million displaced small farmers. So since the problem originated with American trade policy, it's only poetic that the chickens should come home to roost in our own home towns.

If you took a look at the curve on corruption you would see that it has been so endemic as to be impossible to eradicate overnight. It has been in the culture since Tejas was a Mexican state, and was official throughout the reign of the PRI. But now that the PRI is out of power, steps are being taken. Be patient, they've only been under new management since 2000.

In the 75 years or so since the ejido system was developed it has served a useful purpose-- to give stability, dignity and viability to the former peons of the country. In 2006 if it is now being parcelled and sold off, don't blame the government but rather the passage of time. It is no longer an effective tool for the management of the rural standard of living. You may place the emphasis in a slightly different place than I do, but I think neither of us are being dishonest.

a BRAND NEW idea - sort of
Has anyone considered the fact that if the United States has within its borders about ten percent of all of the Mexicans, maybe we should take about ten percent of Mexico......? We'll take Sonora and all of Baja California -- and if they allow more illegal emigration, we'll talk about some more later. Nobody asked us about taking the Mexicans, why ask about taking Mexico? A brand new idea, at least since the last century.

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