By David Leftwich
Since President Trump’s election, he has released executive orders to regulate immigration. The first executive order that received the most attention banned travel into the United States from six Muslim-majority countries. The next executive order was released on January 25, 2017 and is entitled, “Enhancing Public Safety in the Interior of the United States.” This executive order attempts to rid the United States of “criminal” illegal migrants in the U.S and will likely have a large impact on Mexico. Remittances, or gifts and money sent by migrants living in the U.S. back to Mexico, are an important source of revenue for the poorest people there. In addition, a drastic reduction in remittances will hurt the country’s economic growth.
Mexico is one of the leading remittance receiving countries in the world, receiving $28.7 billion in 2015 from all countries. The other top five remittance receiving countries are India, China, the Philippines, and France. To put this $28.7 billion in perspective, it represented 2.7% of Mexico’s total GDP of just over $1 trillion in 2016. Because of close proximity and economic ties to the United States, Mexican migrants in the United States are the main source behind those remittances. Out of the $28.7 billion sent to Mexico in 2015, an estimated $25.2 billion came from the United States. In total, the United States is home to about 11 million Mexican migrants, most of whom send remittances back to Mexico. The median amount of money sent is $300 per gift, 14 times a year. This income from remittances is vital to both working migrants in the U.S. and their families in Mexico, especially in a Mexican economy that has seen a shrinking rate of GDP growth over the past two years.
Besides helping out families, remittances also diversify the Mexican economy away from oil. Relying on oil and other natural resources is related to many negative outcomes in developing countries. Energy dependence is correlated with authoritarianism according to Larry Diamond, professor of political science and sociology at Stanford University: “There are twenty-three countries in the world that derive at least 60 percent of their exports from oil and gas and not a single one is a real democracy.” Other negative outcomes associated with resource dependence include slow economic growth rates, inequality, and poverty.
Besides these negative long-term effects, from day-to-day, economies dependent on natural resources are more volatile and fluctuate drastically depending on the markets for their resources. Remittances have been important to reduce this resource dependence in Mexico’s economy, and in 2015, for the first time, money from remittances surpassed money brought in from oil.
This flow of remittance money into Mexico is being threatened by President Trump’s second executive order. The order targets “those that have abused any program related to the receipt of public benefits” for deportation. This includes a variety of common programs, such as Social Security, Medicare, Medicaid, welfare, unemployment benefits, and the Supplemental Nutrition Assistance Program (food stamps). Additionally, the executive order focuses on finding people who have “engaged in fraud or willful misrepresentation in connection with any official matter or application before a governmental agency.”
In order to acquire a job, most illegal migrants need to lie about themselves, whether it is about their citizenship status or social security number. According to Ronald Mortenson, a Fellow at the Center for Immigration Studies, “…approximately 75% of working-age illegal aliens use fraudulent Social Security cards to obtain employment.” Even if it’s not work related, illegal migrants need to lie about biographical information when obtaining basic goods, such as credit cards, in American society. Additionally, if an illegal migrant applies to receive any kind of private healthcare or a government benefit, under the executive order’s broad terms, almost every illegal migrant in the United States will be targeted. While the order was created to help secure the United States against criminals who are in the United States illegally, it gives Immigration and Customs Enforcement (ICE) the authority to deport the majority of working illegal migrants and their families.
The people this order includes are mainly longstanding, contributing members to their communities and to the national U.S. economy. According to the data, most have jobs and are longtime members of their community. The Pew Hispanic Center listed that in 2010, 8 million of the estimated 11.2 million total estimated illegal migrants were in the United States working. Also, 78% of illegals have lived in the United States for 10 years or more, and only 7% have been here less than five years. By uprooting these people, the United States would lose millions of workers, and the Mexican unemployment rate would immediately rise. Because these millions of deported people will be returning to their already impoverished families without a job or the extra income from their jobs in the United States, many families will fall deeper into poverty in Mexico.
The media and President Donald Trump have inflamed the issue of illegal migration, even though rates of immigration into the United States from Mexico have dramatically decreased over recent years, and the population of illegal migrants in the United States from Mexico has decreased from 6.9 million in 2007 to 5.6 million in 2015. This represents roughly a 19% decrease in population size over eight years. Despite this reduction, President Trump is focused on slowing immigration into the United States. He attempted to increase regulations on immigration in his first, “Travel Ban,” executive order, but this second executive order fills a completely different role. Its broad reach deports a group of working, productive members of society under the guise of criminal behavior.
President Trump paints all illegal migrants in the United States as a dangerous group, but in reality, they commit less crime than native-born Americans. According to the 2010 American Community Survey, about 1.6 percent of migrant males aged 18-39 were in prison compared to 3.3 percent of native-born males. There is an issue with illegal immigration in the United States, but broadly deporting established migrants is a counterproductive way to solve the problem that would hurt both the United States and Mexico.
Removing most working illegal Mexican migrants from the United States negatively affects the Mexican economy. As of 2013, 67% of remittances to Mexico were from undocumented migrants. Using this percentage against remittances from the U.S. to Mexico in 2015, President Trump’s plan could eliminate $16.9 billion of the estimated $25.2 billion of remittances being sent to Mexico. In 2016, Mexico’s economic growth slowed to 2.3%. Applying these estimated remittance losses from Trump’s proposed executive order to Mexico’s 2016 GDP would eliminate most if not all of the 2.3% GDP growth in 2016.
Even though President Trump’s executive order is meant to protect the United States from dangerous migrants, its broad language may cause widespread deportations. As an important financial resource for the poor and a diversifying component of the Mexican economy, a multi-billion-dollar reduction in remittances from the United States will have destabilizing economic consequences for Mexico. President Trump should weigh the unintended costs and see whether this executive order’s nominal gains are worth the damages.