Free trade may ease migration fears

PHILIP MARTIN is right in the middle of the debate over President Clinton's jobs summit, with one caveat: his subject is migration rather than employment. Equally, Mr Martin's research is one of the lightning rods that is sparking debate over the employment aspects of the proposed North American Free Trade Agreement (Nafta) with Mexico.

In the US as in Europe, the issues of migration and employment are increasingly linked in a popular debate that often turns ugly - sometimes with the complicity of government.

With unemployment on the rise in the industrialised world, it is not surprising that there has been a backlash against the influx of political and economic asylum-seekers in western Europe, for example, and the continued wave of mostly illegal Mexican immigrants into the US.

In both cases, these largely undocumented newcomers are putting intense social and economic pressure on the resident low-income and unskilled workers. The migrations also impose financial burdens for which the authorities are unprepared. The results can be explosive, as in the case of the firebombings of Turkish workers' hostels by German neo- Nazi gangs.

Such incidents are harsh illustrations of why governments see an urgent need for extraordinary steps to attack the rigidities, related slow growth and structural problems that are leading to rising unemployment in the 1990s at both macro and micro-economic levels. In Europe, where the problem is particuarly acute, unemployment now averages more than 10 per cent, and the rate for workers under 25 is close to 20 per cent. This compares with jobless rates in the early 1980s of 4 per cent in France, Germany and most other western European countries.

In the US, the official jobless rate is close to 7 per cent, high by US standards, and also slightly misleading since it masks the number of underemployed workers and those who have simply given up.

This explains why the US debate over the employment aspects of Nafta is particularly heated. The big US preoccupation, which motivated Mr Clinton to call for an employment summit was not the capacity of the economy to create jobs but rather the growing differential in skills and income within the US workforce. The most serious problems affect the lower tier of the workforce: the 25 per cent who are school 'dropouts'; the 'forgotten' 50 per cent of secondary school graduates who do not attend colleges or universities; the 48 per cent of the adult population whose literacy rates are at or below minimal functional standards. These are the workers most at risk from increased numbers of lower wage immigrants from Mexico.

To put the debate in perspective, it is useful to remember two important facts. The first is that the US already has the world's largest immigrant population, having taken in 9 million people over the past decade. The second is that it is bordered by the world's largest emigrant country, Mexico, which sent 3 million workers to the US over the same period - equal to 20 per cent of its net population growth. This has produced what Mr Martin calls the 'Latinisation' of rural America, with a rapid spread of Mexican workers throughout US agriculture.

The US government has aided and abetted the process off and on since the First World War, when 'wetbacks' who crossed the border to work in the fields were unofficially welcomed. The big question now is whether these already large flows will increase even more as a result of a free-trade treaty. Mr Martin, a migration specialist based at the University of California at Davis, answers this question with a short-term 'yes' and a longer-term 'no'. Indeed, he believes that a treaty that increases free trade and investment and results in stay-at- home development may be the only way to stem the migrations that have been a reality for most of this century.

Without a Nafta, these flows may grow even larger, since Mexico appears poised for its own Great Migration - a shift of rural populations not unlike that which occurred in the US in the 1950s when rural black and white workers in the south moved to Midwestern cities like Chicago and Detroit.

Over the short term, however, Nafta is likely to bring more migration from Mexico, although only marginally according to Mr Martin's research. This is because the demand- pull of US jobs is not likely to end overnight: California, for example, is likely to remain North America's 'salad bowl', drawing Mexican farm workers even after the trade tariffs have been eliminated.

The US policy response should not be anti-Nafta. Mr Martin and others believe it will be a net job creator over time as US industry takes advantage of opportunities in Mexico's developing economy and the rising income of its 90 million people.

Similarly, the best western European response to flows of people from eastern and central Europe is to accept their products and promote home- grown development.