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The Outlook

The Wall Street Journal, May 7, 2001

Arrests of illegal immigrants are down sharply along the border, as the traditional post-winter flood of illegal Mexican workers returning to U.S. jobs has fallen to the lowest level in nearly a decade.

"We're seeing the same pattern right across the border," says Renee Harris, an analyst with the U.S. Border Patrol. "The seasonal pattern is holding, but every month it's lower than last year." So far, the agency has turned back about 750,000 would-be entrants through early May, compared with a million during the same period last year. Border guards expect the trend to continue.

Federal officials aren't entirely sure why there has been a sudden slowdown, though some suggest it could be related to cold weather or to a greater fear of getting caught. But some labor economists are considering a more provocative theory: They say the relationship between a burgeoning pool of Mexican workers and their U.S. employers has become so refined that the flow of information to "sender" villages now acts as a control valve on the flow of migrants. Mexico's workers, aware of rising layoffs and slowing economic growth in the U.S., are simply waiting to be "called" back rather than risk a fruitless crossing.

Call it the just-in-time labor market. "A lot of the decline may be workers forecasting demand with better information. It may be something as simple as construction workers in Detroit no longer calling home asking for more family members to come north," says Gordon Hanson, a University of Michigan economist. "This has become a very efficient market."

One indicator of Mexican efficiency is the fact that Border Patrol seizures of Central and South American, Chinese and Eastern European migrants attempting illegal entry either are steady or rising. That supports the theory that Mexico's laborers are behaving slightly more rationally than are their competitors.

This trend may make it possible for companies to downsize more easily, especially if the economic slowdown deepens into a recession. That's not only because imported laborers have temporarily taken themselves out of the market, but also because many of the industries most likely to have to shed workers are also the same ones most likely to attract a disproportionate number of Mexicans.

The latest U.S. Census shows between three million and six million undocumented Mexican workers entered the U.S. during the 1990s, many more than demographers thought. They settled in low-end industries, profoundly affecting U.S. labor markets in what some economists call a virtual "Mexicanization" of the many U.S. industries that drew cheap imported labor during the long expansion.

"We're now seeing the numerical evidence of something that has been unfolding for 15 years," says Demetrios Papademetriou, an immigration scholar with the Carnegie Endowment in Washington. "That is, the full integration of the Mexican labor market with the bottom half of the U.S. labor market."

Data released by the U.S. Bureau of Labor Statistics this spring support that view. The BLS defines job categories by race, with "Hispanic" serving as a close proxy for Mexican migrants. The 1990s ramp-up of Hispanic-Mexican participation in dozens of categories -- from meat cutter to carpet layer to landscaper -- has transformed whole sectors of the U.S. economy that now are staffed by younger, more mobile work forces than the ones they replaced.

According to the BLS figures, U.S. businesses added more than 12 million wage earners to their payrolls from 1994 through 2000, about a quarter of them Hispanics. In construction, a net importer of more than 400,000 immigrant laborers over the decade, certain jobs have become almost entirely "Mexicanized." For example, three of every four new carpet layers were Spanish speakers. In drywall hanging, where two of every five workers are Hispanic, immigrants accounted for virtually all the 52,000 jobs added during the period.

This rapid concentration has spawned a sophisticated, if informal, infrastructure to deliver cheap labor when and where it's needed. "Ten years ago, a migrant might have paid a smuggler $300 just to cross the border," says Rodolfo Cruz, a Tijuana demographer. "Today, he is willing to spend up to $1,500 to be brought to the work site in Colorado or New York City." The result: a nimble network skilled at reading job supply and demand.

This phenomenon is also taking place across declining industries. The percentage of Hispanics working in textiles or operating printing presses, for instance, increased as immigrants replaced native-born workers. Typical is the BLS category "machine operators and tenders," which lost nearly 500,000 jobs between 1994 and 2000, but saw a net gain of nearly 150,000 jobs held by Hispanics.

Just as flexible labor proved crucial during the economic boom, it also helps employers get through slower times. Take Georgia's carpet industry, which saw a huge influx of Mexican labor during the 1990s. Bruce Bowers, human-resources director for Beaulieu of America Inc., one of the area's largest weavers, says he hired 100 workers a week when times were flush to keep up with heavy turnover. "That's 1% of my 11,000 employees," Mr. Bowers says. "Now, I can eliminate 1% of my payroll by shutting down hiring for a week."

(CIS - 010508)

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