Mexico Engaged in ‘Labor Dumping’

The underlying reason for America’s illegal alien problem is a sick economic system in Mexico that leads to the “dumping” of labor into the U.S.

That’s the view of Steve H. Hanke, a professor of applied economics at the Johns Hopkins University and a senior fellow at the Cato Institute.

To illustrate how “labor dumping” functions, he points to Yugoslavia under Tito, which sought to deal with a surplus of workers.

“Opening Yugoslav borders — at least by communist standards — provided Tito with the means to dump surplus labor and mask flaws in the paradise of worker-managed firms,” Hanke writes in Forbes magazine.

The result: By the early 1970s “Tito’s broom” had swept 11 percent of the Yugoslav labor force into Western Europe, and those workers sent home money that amounted to 30 percent of Yugoslavia’s exports.

Today Mexico is the world’s largest labor dumper. But politicians on both sides of the immigration reform debate “fail to mention the source of the problem: Mexico’s statist [highly centralized] economy,” according to Hanke. “Like Yugoslavia, Mexico can’t produce enough jobs . . .

“Rather than modernize the economy, Mexico’s politicians use Tito’s broom.”

As a result, 30 percent of Mexico’s labor force is working in the U.S., and last year they sent home $23 billion, 12 percent of Mexico’s exports.

Hanke concludes: “There is little chance of stemming migrant inflows as long as the countries supplying immigrants embrace policies that effectively mandate labor dumping.”