Mexico is perfectly positioned to profit
from the convergence of at least three forces:
- Mexico’s birth rate
is rapidly declining.
- Fewer of its citizens
are immigrating to the U.S.
- Because of the rising
costs of off-shoring, many U.S. companies are “near-shoring” their production
to low-cost economies closer to home — and none is closer to the U.S. than
Mexico.
Let’s start with Mexico’s plummeting
birth rate.
Mexico is among many of the world’s
nations that are facing a stunning decline in their birth rate. Mexico’s
population has increased by 500 percent since the 1940s; but by 2045
demographic experts expect the population growth to stop completely.
According to the United Nations
Population Division, the number of Mexican children under the age of 5 has
dropped from 11.7 million in 1995 to 10.8 million in 2005. In other words,
almost 1 million fewer children were born in Mexico in this decade than in the
previous one.
Over a longer time frame, the drop is
even more dramatic. According to The Wall Street Journal,1 the fertility rate in Mexico has plunged
from seven births per family in the 1970s to just slightly more than two births
today.
What this means is that there are fewer
workers competing for jobs, so the country will eventually have more people
working than unemployed. Mexico isn’t at that point yet, because it takes
nearly two decades for a change in birth rates to make an impact on the labor
force.
According to The New York Times,2 about 1.3 million people currently reach
working age in Mexico every year, and its economy can only create between
900,000 and 1 million new jobs per year. That explains why, according to
Mexico’s government statistics, an average of 277,000 workers now leave Mexico
each year to establish permanent residence in the U.S.
For the next couple of years, Mexico will
continue to create more new workers than jobs, which will swell the ranks of
the unemployed and continue the flood of immigrants to the U.S.
However, as soon as 2010, that will all
change. Mexican government demographers project that the number of...
