Following the money: What's really behind the slowdown in Mexican border arrests?

June 20, 2007

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In the past year, the U.S. government took strong measures to seal the border with Mexico, deploying 6,000 National Guard troops, sharply increasing the size of the Border Patrol, and installing new detection equipment and barriers.


Around the time these measures were being implemented, the number of arrests at the border began to fall. The U.S. Border Patrol reported this year that arrests are down 10 percent from last year.


Advocates of tougher enforcement point to these facts and say the policy is working, that the crackdown is deterring would-be illegals. But Dawn McLaren, research economist at the W. P. Carey School of Business and a specialist in border issues, has another explanation. The increased presence of security has pushed up the cost of getting assistance in crossing the border. Then labor economics come into play. With the economy on the U.S. side softening, the prospects are declining that workers will find jobs that pay enough to justify the higher price of sneaking across.  


"The crackdown at the border has made it more dangerous and it has made it more expensive to cross illegally," McLaren said. "What these measures have done is to make this group of people more sensitive to the changes in the economy."


Since early 2006, the U.S. economy has been in a slowdown, and this, according to McLaren, has been the real deterrent to crossing the border illegally. "It is not increased border security," she said.



Paying the coyote


To understand the interplay of border security, illegal immigration, and the U.S. economy, it is necessary to understand the shadowy world of "coyotes" -- the guides in Mexico who lead immigrants across the border, according to McLaren, who edits the Western Blue Chip Economic Forecast and the México Consenso de Pronósticos Económicos.


McLaren said she has learned from talking to deportees and to people seeking to cross the border that the cost of the services of coyotes has skyrocketed -- from between $500 and $1,000 a little over a year ago to between $2,500 and $3,000 now. Accounts in the popular press support these numbers.


The higher cost of hiring a guide means that illegal immigrants must make sure they have well paying jobs before coming to the United States. Illegal immigrants are less willing to accept low paying jobs now, since they need to make enough money to afford a coyote's services, according to McLaren.



Jobs needed before crossing


In her research, McLaren focuses on individuals who make their way from Mexico to the United States without documentation. She excludes from her analysis immigrants who are in the United States legally or who arrive legally then overstay their visas -- these immigrants respond to bureaucratic timing rather than the economy.


McLaren cites four ways of crossing the border illegally: using false documents, going via tunnel, crossing the desert on foot, or riding across concealed in a truck or car. Coyotes can help with each of these methods but are best known for leading treks across the desert.


"Generally, you get yourself a guide and you do it in a group," said McLaren. "It's expensive, and it's dangerous."


Guaranteed and reasonably well-paying jobs on the other side are a necessity, otherwise the new arrivals would not be able to pay the coyotes, according to McLaren. And, she says, if well paying jobs in the United States are scarce because the U.S. economy is in a downturn, then illegal immigration should fall.


In fact, illegal immigration can be a leading indicator of the direction of the U.S. economy, according to McLaren. She noticed the drop in border arrests just before the arrival of data confirming an economic slowdown.


"A year ago, I saw a change. Arrests on the border slowed down. It said to me our economy was going to slow down, and it did," McLaren said.


In the first quarter of 2006, real Gross Domestic Product growth was 1.3 percent, down from 5.6 percent in the previous year.



What would an improving economy do?


McLaren's observations put her at odds with advocates of increased border security who claim that the new measures are responsible for the drop in arrests.


"You can tell when the border's better defended because the number of arrests go down," President George W. Bush said in a recent speech. "In other words, when people know there's a consequence to trying to sneak across, there's less likely to be people sneaking across."


McLaren finds flaws in that argument. She says coyotes are resourceful and historically have been able to overcome obstacles on the 2,000-mile border. "Look at how many years the border patrol has been trying to thwart the smuggling. The coyotes just think of something else."


While increased security may have indirectly slowed illegal immigration by driving up coyote prices and altering the financial equation, it will not have the same effect if the U.S. economy rebounds, according to McLaren. If would-be immigrants can line up good jobs, they will be able to afford the services of the coyotes, and they will come.


"Increased border security doesn't do what was intended, which is to stop them from coming," McLaren. "If the economy improves and the Border Patrol continues its efforts, we should see more arrests at the border."


McLaren said the scenario of an improving economy and more illegal immigration is a very real possibility. Illegals are quite capable of earning enough to afford the cost of a coyote.


"Ask folks what they think illegal immigrants make, and they'll guess one or two dollars an hour," said McLaren. "But if you are picking lettuce in Yuma, you get a base of $8 an hour plus a premium, which might bring it up to $13 or $14 an hour. A day laborer might make $10 an hour. This is not minimum wage."



Questioning the data


John McDowell, economics professor at the W. P. Carey School of Business and an expert in immigration issues, said research in this area is hampered by a scarcity of reliable information. "You are dealing in a world of bad data and a world of emotion and vested interests," he said.


He said the consequences of a border crackdown are difficult to predict. "If you increase border security, it doesn't necessarily increase the number of arrests or reduce the number of people coming into this country," he said. "But what you would expect it to do is to reduce the flow back and forth."


Illegals who are established in the United States would be unlikely to go to Mexico to visit since they would not know if they could return, according to McDowell.


McDowell agrees that economic conditions in the United States are a factor in illegal immigration. The key variable, according to McDowell, is the difference in wages in Mexico and the United States.


"The bigger the wage differential, the greater the incentive to migrate," he said.


Said McLaren, "They can make more here. We are pulling them here because of the wage differential."


But as that wage differential is eaten away by a slowing U.S. economy, would-be immigrants are less willing to pay high prices to evade Border Patrol, according to McLaren. "The economy is the deterrent," she said.



Bottom Line:


·         In 2006, arrests at the United States-Mexican border began to fall, as new U.S. government security measures went into effect. But something else also happened then: a downturn in the U.S. economy.

·         The cost of hiring a "coyote" or guide for a border crossing increased sharply about a year ago. This means would-be immigrants need to first line up well-paying jobs, which are scarce in a down economy.

·         If the recent downturn in the U.S. economy is the cause of a drop in border arrests, then an economic recovery should bring an increase in arrests.

·         One consequence of a border crackdown is less back-and-forth movement of migrants between the United States and Mexico.