Migration Meets Slow Growth

• Author: Demetrios G. Papademetriou
• Position: President of the Migration Policy Institute.

The United States’ long-standing argument with Mexico over illegal migration is on the wane. Net migration from Mexico is near zero and apprehensions of illegal immigrants (many non-Mexican) at the U.S. southern border are at levels last seen in 1970 (U.S. Border Patrol, n.d.).

Massive U.S. investments in border controls, aggressive interior enforcement measures, a Mexican economy that has been growing much faster than the U.S. economy since 2010, and ever-deeper cooperation with the United States on the issue explain a good part of the decline in illegal migration. But even more important is that a sustained decline in Mexican fertility means that fewer new Mexican workers are entering the labor force each year at the same time that job opportunities in the United States are much lower as a result of the ongoing economic distress.

The aftermath of the Great Recession has not only affected immigration between the United States and Mexico. Immigrants from lower- and middle-income countries have been particularly vulnerable to the destruction of jobs in most advanced economies. Migration—which has been both driving force and byproduct of globalization and the ever-increasing interconnectedness it fuels—now comes face to face with the global crisis.

The crisis may have ended a period in which the benefits of openness, including large-scale immigration, were embraced with relatively few questions across advanced economies. In the years ahead, immigration is likely to become more selective, and lower-skilled migrants are likely to be less welcome—at least as prospective permanent residents, let alone as fellow citizens.

Job destruction

In the United States, for example, labor market distress has reached levels not seen since the Great Depression. About 23 million people, roughly 15 percent of the labor force, are unemployed or underemployed—including workers in involuntary part-time situations and those who become marginally attached or discouraged (see Chart 1). The share of men who hold a job is at the lowest level since 1948, when the U.S. Labor Department began collecting these data, while for all workers it is the lowest since 1981. At mid-2012, nearly 42 percent of the unemployed had been jobless for 27 weeks or longer, increasing the prospect that their skills will atrophy and raising the risk that even as large numbers remain unemployed, jobs will go begging because of the growing gap between the skills available and the skills employers require (see “The Tragedy of Unemployment,” in the December 2010 issue of F&D). Hardest hit are middle-aged workers (45 to 64 years old), who both remain unemployed longer than any other age group and find it harder to get jobs with wages similar to the ones they lost. Moreover, investments in productivity-enhancing and labor-saving technologies during recessions reduce the post-recession demand for workers (Katz, 2010). Notwithstanding a smaller workforce, the United States has a higher GDP than five years ago.

These troubling figures are not limited to the United States. Five years after the first signs of distress in the U.S. mortgage market that led to the global financial crisis and three years after a halting recovery began in most advanced economies, the jobs crisis in Europe as a whole is even worse. In April 2012, 24.7 million persons in the 27 countries of the European Union (EU) were unemployed, 8 percent more than a year earlier (Eurostat, 2012). The situation becomes even more dire when one considers all measures of economic distress; 42.6 million EU workers were unemployed or underemployed in 2011.

Moreover, youth unemployment is extremely high and continues to grow in some EU countries (see Chart 2). The potential consequences of this phenomenon are disquieting. They include long-term “economic scarring,” the risk of a “lost generation” of workers, and the potential for social disorder—the appeal of extreme ideologies is strongest among those with dismal prospects.

While...