Sunday, March 2, 2008

The solution to illegal immigration

Let's face it, when we speak of illegal immigration, we're not talking about the Canadians sneaking into the US - why would they want to do that - no, we're talking mostly about Mexicans.

Reading partway through, "The World is Flat" by Thomas Friedman, it occurred to me that sure, India has become the outsource capitol of American corporations, but it doesn't have to be that way. Mexico could become the outsource capitol of America, and would be geographically more feasible and sensible than either India or China.

The two step process to virtually ending illegal immigration:


  • Education.

    • American universities need to set up satellite shops in Mexico, and allow cheap access to quality education in Mexico (heck, this might spur Americans to seek out their higher education in Mexico - how ironic would that be).
    • English must also become a second language to Mexican school children. By learning English, they can compete for higher earning jobs outside of the agricultural sector. More importantly, dual-language children will be able to interchangeably communicate with Hispanic immigrants in the US as well as English-speaking Americans.

  • Outsourcing.

    • Having replicated what is currently going on in China and India, we need to remove the barriers of trade between Mexico and the USA so that data and traffic are not taxed or tarrifs placed on the exchange between the two nations.
    • Companies should only be taxed once, and be allowed to separate their domestic income from that which is earned over the border. Granted, companies shall not be allowed discretionary allocation of their income; we do after all need to ensure that companies do not try to divert their income to evade taxes. You need to pay once.


And that's it. Free market combined with a good educational system will move Mexico into the same position that India and China are currently in. But, because of the proximity and the time zone compatibility, Mexico stands a better chance of competing for outsourced services than India or China. (Goods on the other hand, should remain locally dispersed. More on the issue of the importation of goods in a later posting.) The ramifications for making Mexico the capitol of American outsourcing is extremely long and powerful. Perhaps the best part of the equation is that, illegal immigration will become a thing of the past. We won't be building a stupid wall, virtual or real.

Of course, there are always winners and losers in a transformative economy. There are lots of methods to make that transformation smoother for the losers, enabling them to become future winners. Again, another future posting.

No comments: