Mexican Middle Class

The news on illegal immigration is that the numbers have turned negative for the last few years. More are going south than coming north. Estimates vary but there may be as few as 10 million undocumented aliens in the US, down from over twelve million at the end of the Bush administration. That is still a lot of people here illegally and the decline is usually attributed to a faltering US economy, but there is another way to look at it. Conditions in Mexico are improving. The decline may continue indefinitely.

There is a book out from the Wilson Center making the case that Mexico has become a middle class nation. There are those who would dispute that, there is still a lot of poverty south of the border, but there are signs of growing prosperity. More Mexicans than ever are buying homes, driving automobiles, and sending their children to college. The authors argue that those middle class life style choices have become the rule rather than the exception.

There are other indicators. Thirty years ago the average Mexican had a fourth grade education. Now it's eighth grade, not what it should be but definite progress. Once a rarity, meat has become a staple in Mexican diets. Most Mexicans now have electricity and running water.  Most have access to the Internet.

The book cites a variety of explanations. In 1970 a Mexican woman could be expected to have seven or more children. Today she might have two, slightly lower than the replacement rate and a long term demographic concern but a short term advantage. Fewer children frees more women to work outside the home, and reduces pressure on children to leave school early. NAFTA has helped. Even a few cents off the price of basic consumer goods can make a big difference for a family on the edge of poverty. There is also a lot more competition. More cattle growers have driven down the price of beef. Every big city now has a Walmart. The perception that things are getting better encourages people to work harder, save more, and take entrepreneurial risks.

There are issues. The drug wars are horrific, but they don't seem to effect the everyday lives of most citizens. There is too much red tape and corruption at all levels of government. Civil service jobs tend to go to the well connected. There are too many barriers to starting a business. At three percent the GDP is growing more slowly than the 5% historic rate, faster than the US rate but too slow to.     make the needed progress against poverty. Things are fragile, any number of economic events could drag a lot of people right back down into the grinding poverty they only just escaped. But for now things are looking up. A little prudence from government will go a long way toward keeping them that way.

A large and growing Mexican middle class is a major positive development for the US too, and not just because of the prospect of fewer illegal immigrants.  Thriving markets in the neighborhood mean better opportunities for trade, and a boost to our own economy.

For now I'm hoping reduced pressure on the border will also reduce the incentive for politicians to demagog the immigration issue. We may have an opportunity in the next congress to pass a bi-partisan version of the DREAM act. If the number of illegals continues to decline, in a couple more years we may even get to an atmosphere where we can pass comprehensive reform. That would be a blessing.

If it happens we will likely owe it in no small part to the Mexican middle class. It is in our best interest to encourage its growth.