Alternative Scenarios of North American Integration and Development: Trade, Migration and Wages. Raúl Hinojosa-Ojeda, UCLA NAID Center

Transcription

1 Alternative Scenarios of North American Integration and Development: Trade, Migration and Wages Raúl Hinojosa-Ojeda, UCLA NAID Center

2 Critical importance of China-US/Mexico relations for the Future of Transition form Great Divergence to the Great Convergence Can Convergence be Mutually Beneficial or is there a material basis for Trump/Brexit and a Thucydides Trap? What explains the Trump Paradox for both Mexico and China? What are the best theoretical/methodological and policy approaches to determine and enhance possibilities for mutually beneficial Great Convergence? Need to model complex interdependence between US-Mexico/China (urban rural) trade, migration and remittances. Policies for migration legalization and remittance empowerment can enhance Great Convergence much more than NAFTA or TPP trade policies.

3 Trump Paradox Global Convergence Transnational Micro Geographies Alternative Scenarios in the Trump and Post-Trump Era (1) TRUMP Led Chaotic Disintegration Trade War, >> Mass Deportations >> End of Remittances (2) POST TRUMP North American Integration and Development ->>> NAFTA Stalemate (or modest improvement) ->>> Legalization of Undocumented ->>> Remittance Empowerment Raising Wages, Not Walls Inequality: Power or Markets? Labor Empowerment, Global Neo-Fordism and Adjustment Strategies

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5 From the Great Divergence to the Great Convergence: Global GDP Shares: % 90% 80% 70% 60% 50% 40% Developing Developed 30% 20% 10% 0%

6 100% Shares of World GDP: 1AD % 80% 0 I II III IV V 70% 60% DEVELOPING DEVELOPED 50% 40% 30% 20% 10% 0% Western Europe Developed Developing Asia (Excl Japan) Western offshoots EE & fmr USSR Latin America Japan Source: own elaboration with Maddison Project Database, version Bolt, J. and J. L. van Zanden (2014). The Maddison Project: collaborative research on historical national accounts. The Economic History Review, 67 (3): , working paper

7 40% Global GDP Shares: % 30% 25% 20% 15% 10% 5% 0% USA W Europe China Latin American Mexico Middle East Source: own elaboration with Maddison Project Database, version Bolt, J. and J. L. van Zanden (2014). The Maddison Project: collaborative research on historical national accounts. The Economic History Review, 67 (3): , working paper

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9 The Second U.S. Great Migration Percentage Passes Historical Peak 81 Million (2050, Pew 07) 14.8 Percent 36.4 Million (2005 CPS) 4.7 Percent 12.1 Percent (2005) 18.6 Percent (2050)

10 Percentage 90% 80% 70% The Great Ethno-Racial Transformation: United States, California and Arizona Percentage of Non-White and White Races Between United States White United States Non-White 60% 50% 40% 30% California White California Non-White Arizona White Arizona Non-White 20% 10% 0% Source: US Census "populations projection for States, by sex age, race and hispanic origin: 1995 to 2025" (1996) US Census, 1990, 2000, 2004 Policy Institute of California. Reyes Years

11 The Second Great Inequality

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13 Percentage 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % 80% 70% 60% 50% 40% 30% 20% 10% 0% Developing Developed United States White United States Non-White California White Years

14 2016

15 Donald Trump's political rise utilized the narrative that: America ceased being great because of illegal immigrants and trade agreements that take U.S. jobs, targeting Mexicans and Mexico in particular Many observers have associated Trump s popularity with negative impacts from trade and migration on the lives of his supporters, suggesting more restrictive immigration and trade policies. Some observers have also postulated a positive relationship between voter support for Trump and "China Shock" trade exposure. Others have suggested a positive relationship between Trump support and the level of Mexican immigration.

16 THE TRUMP PARADOX NAID examination of the geographical concentration of support for Donald Trump in the presidential primaries indicates a negative correlation between the number of Trump supporters and the population size of Mexican immigrants, as well as a negative correlation between Trump support and import competition from Mexico or China. Areas with high concentration of Mexican immigrants and import exposure to Mexico and China were actually more likely to favor Hillary another Republican candidate or Hillary Clinton.

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22 Counter to the dominant narrative, Trump supporters are less likely to live in counties (and CZs) with import competition from China and Mexico, and produce goods with high export shares (by state) to China and Mexico. The more import competition a county likely faces from China, the more likely it is that voters in that county supported the Democratic candidate or a primary Republican other than Trump. The more exports a county likely sends to China, the more likely it is that voters in that county supported Trump over the Democratic candidate or another primary Republican candidate. The more import competition a county likely receives from Mexico, the more likely it is that voters in that county supported a Democratic candidate or a primary Republican other than Trump. The more exports a county likely sends to Mexico, the more likely it is that primary voters in that county supported Trump over a Democratic candidate or different Republican candidate. The more layoffs caused by trade exposure certified by DOL TAA, the more likely it is that voters in that county supported a Democratic candidate or a primary Republican other than Trump.

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27 TRADE MIGRATION: Rural to Urban MIGRATION: Rural to Urban

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29 Millions of $ $4,000,000 GDP Generated by Immigrants and Value of Trade $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- GDP Contribution of US Foreign Born Residents GDP Contribution of Foreign Born of Mexican Origin GDP Contribution of Unauthorized Immigrants Value of Exports to Mexico Value of Exports to China Value of Imports from Mexico Value of Imports from China Naturalized Citizens Non-Naturalized Residents Total Mexican

30 Industry Share of Labor Output Industry Agriculture Inequality Labor/Inputs Labor Out Migration Agriculture Industry

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34 Data source: World Integrated Trade Solution

35 Data source: World Integrated Trade Solution

36 United Kingdom UKa UKi Uks Netherlands NEAa NEAi NEAs MIGRATION TO US PEAKS AS EMPLOYMENT SHARE OF AGRICULTURAL FALLS BELOW INDUSTRY United States UK USA MX NL USa USi USs USa USi USs

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38 Data source: World Development Indicators modeled ILO estimate (last Updated: 01/25/2018)

39 Figure 4: Apprehensions, Deportations, Voluntary Departures, Repatriation and Braceros ,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 0 Apprehensions Voluntary departures TOTAL deportations Border deportations Interior deportations Great Repatriation Number of Braceros

40 Number entering, exiting, and net change (thousands) 1,400 Figure 6: Undocumented Population and Net Change 1,200 1, Number Entering Number Exiting Net Change Source: Warren, R., & Warren, J.R. (2013). Unauthorized Immigration to the United States: Annual Estimates and Components of Change, by State, 1990 to International Migration Review, 47 (2), p. 315 doi: /imre Net change from Pew Hispanic

41 Data source: World Development Indicators modeled ILO estimate (last Updated: 01/25/2018)

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43 Calculations by Mr Knight, Deng Quheng of the Chinese Academy of Social Sciences and Li Shi of Beijing Normal University imply there are still 70m people in China s villages who might be expected to leave in search of work, given their age, family obligations and so forth.

44 Trends of Unauthorized Chinese Population in the United States Source: Pew Research Center;

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47 35,000 Remittances by country ,000 25,000 20,000 15,000 10,000 5,000 0 Guatemala Honduras México El Salvador Source: own elaboration based on World Bank data

48 Hukou and Remittances The impact of the hukou system on migrant laborers became particularly onerous in the 1980s after hundreds of millions of were forced out of state corporations and cooperatives. [5] Since the 1980s, an estimated 200 million Chinese live outside their officiallyregistered areas, with much less access to education and government services, and in several respects occupy a social and economic status similar to illegal immigrants. [7] According to a report released by the Consultative Group to Assist the Poor, China s rural migrants sent home nearly US$30 billion in 2005 (Cheng and Zhong, 2005: 4). To provide context, this sum is more than the amount that China or any other country receives from international cross-border flows.

49 US-Mexico CGE Model: Circular Flow of Production, Income, and Demand U.S. MEXICO

50 Alternative Scenarios: NAFTA CGE Static Impacts of Trade versus Migration Liberalization Source: NAID Center CGE Model Mexico US (i) NAFTA Trade Liberalization 45 billion Over 10 Years 65 bn Over 10 Years (ii) Proposition bn, annual -257 bn, annual (3 a) Legalization and HK Self Inv (3 b) Legalization w/community Banking 12 bn, annual -11 bn + 35 bn, annual 190 bn, annual 285 bn, annual 1.5 Trillion 10y

51 In 2006, the US Congress Actually Tried to Pass A Self Deport Option (SB 1070) A group of us decided to make a movie called A Day Without a Mexican

52 A satirical Professor Abdul Hassan predicts what would happen in California without Mexicans.

53 Raising the Floor for American Workers The Economic Benefits of Comprehensive Immigration Reform by Dr. Raúl Hinojosa-Ojeda UCLA NAID Center

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56 10 Year Cumulative GDP Loss Resulting from Mass Deportation

57 TRUMP TRADE WAR with CHINA and MEXICO

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59 Note: GDP data are measured in millions at current prices and PPPs Data source: World Bank (last Updated: 01/25/2018)

60 Data source: OECD; International Labor Organization; National Bureau of Statistics of China-China Statistical Yearbook

61 Note: GDP per capita data are measured in US dollars at current prices and PPPs. Data source: World Bank (last Updated: 01/25/2018)

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