The New York Times recently reaffirmed what U.S. government data and anecdotal evidence has been telling us for several months:  immigration to the United States is falling fast.  (See “Mexico Data Say Migration to U.S. Has Plummeted“)

New Mexican government data support U.S. reports. The Times writes, “Census data from the Mexican government indicate an extraordinary decline in the number of Mexican immigrants going to the United States.”

Migration out of Mexico fell by more than 25% in the 12-month period ended August 2008, and it is highly likely that the decline will prove to be even steeper in the months that followed.   Though stronger border enforcement explains some amount of the decline, the Times is well aware of the primary reason: “the current decline…is largely a result of Mexicans’ deciding to delay illegal crossings because of the lack of jobs in the ailing American economy.”

We are truly in a brave new world.  Mexican immigration to the United States has been a defining element of the fast-paced, globalized American economy of the 1990s and 2000s.   It provided cheap labor to American homes and businesses, and it also provided a “pressure release” for Mexico’s economy, which has historically had a difficult time providing enough jobs for its workers.  

With demand for immigrant labor declining in the U.S., Mexico will have more surplus workers than ever, which could significantly decrease wages in that country and also lead to higher unemployment.  Will this eventually inspire more Mexican nationals to risk illegal entry into the United States?  For the would-be immigrant, it becomes an unfortunate calculus:  which situation is less bad, competing for a job in an increasingly hostile United States or suffering through potentially even more difficult times at home?  

On the other hand, the sudden surge of home-grown workers could provide a boom to the Mexican economy, as that country will have the use of many of its most talented workers for the first time in decades.  Rather than build the American economy, might they build their own?

There are no obvious answers here.  Over the longer term, Mexico should benefit from keeping its more ambitious citizens in Mexico.  But there will likely be several years of painful adjustment as they are absorbed into the economy.     

As we wrote last week in “The Assault on Free Trade Continues,” we continue to see signs of increasing protectionism and economic nationalism.  There is nothing new under the sun.  We saw the same thing happen during the Great Depression (making it considerably “greater” for many formerly prosperous countries) and we saw a lesser version in the wake of the deep recession of the 1990s when the Nafta agreement was being crafted. 

Of course, anti-free-trade sentiment goes back much further.  The Industrial Revolution in Britain was almost killed in its infancy by the protectionist Corn Laws, which were designed to protect the landed agricultural interests.  Had the free traders not won the debate in Parliament, the world might have taken a very different path.

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As a very positive sign for the future, the New York Times reports that “More babies were born in the United States in 2007 than in any other year in American history.” (“’07 U.S. Births Break Baby Boom Record”)

The National Center for Health Statistics recorded 4,317,000 births in 2007, slightly higher that the previous high figure for 1957—at the absolute peak of the baby boom.   Interestingly, the Times continues, “…in contrast with the culturally transforming postwar boom, when a smaller population of women bore an average of three or four children, the recent increase mainly reflects a larger population of women of childbearing age.” 

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