Chapter 3: Shared Border, Shared Future: A U.S.-Mexican Bilateral Worker Agreement

May 13, 2020 • Publications
By Michael Clemens

This chapter is a part of 12 New Immigration Ideas for the 21st Century.

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The U.S. government has mismanaged labor mobility and failed to cooperate meaningfully with migrant countries of origin for the past half‐​century. Foreign workers have come for fundamental jobs, which are those that are critical to the U.S. economy and that do not require formal higher education, such as personal care, construction, warehousing, and others. They have come almost exclusively via family‐​based green cards, “low‐​skill” temporary guest worker visas for seasonal jobs tied to a single employer, or through a vast black market in labor. Many of the ills associated with migration arise from this regulatory system, not from migration itself. The United States needs a bilateral system of labor mobility for fundamental jobs that should begin with a bilateral worker agreement (BWA) with Mexico.

Goals of a U.S.-Mexican BWA

A BWA for nonseasonal workers could do much better for the United States, for migrants’ countries of origin, and for migrants themselves than the current system. This chapter summarizes the lessons of a recent committee on the BWA chaired by Carlos Gutierrez (former U.S. secretary of commerce under President George W. Bush) and Ernesto Zedillo (former president of Mexico). I was part of this committee of leading experts on law, business, labor rights, economics, diplomacy, and national security from both countries. We drafted a model BWA between the United States and Mexico with 12 major goals:29

  1. Severely curtail unauthorized entry to the United States
  2. Preserve U.S. worker priority for jobs in the United States, without unnecessary bureaucracy
  3. Prevent spikes in labor inflows but remain flexible to market conditions
  4. Suppress abusive labor intermediaries via bilateral regulation of recruiters
  5. Ensure employer compliance with labor standards for all workers
  6. Shared responsibility by the United States and Mexico for administration and enforcement of the agreement
  7. Prevent visa overstays by encouraging return migration and establishing a clear exit path
  8. Enhance common security on both sides of the border
  9. Include the economic sectors where Mexican labor adds the most value, far beyond exclusively seasonal work
  10. Increase the opportunity for vocational skills for all workers
  11. Set transparent criteria for adjustment to shifting market conditions
  12. Fund the BWA mandate in both countries

The BWA is different from the current program for U.S. H-2 seasonal worker visas. The H-2 visa program is unilateral, tightly restricted to seasonal jobs, ties workers to a single employer, is limited by an inflexible visa quota (for nonfarm jobs), is open to citizens of scores of countries, and allows too frequent abuse of workers during the recruiting process because it relies on private Mexican recruiters that are not well regulated by either government. It also is unpopular with employers due to its cumbersome and unpredictable system of annually recertifying that the supply of U.S. workers is insufficient.

Components of a U.S.-Mexican BWA

The model BWA between Mexico and the United States is based on the best features of past and present agreements and has many components. The first is the creation of a U.S. worker priority fee where U.S. employers pay a transparent and universal surcharge to hire Mexican workers, which would ensure it’s in employers’ interest to recruit U.S. workers first while also minimizing bureaucracy. The fee amount should balance three main goals: it must be large enough to strongly deter the hiring of Mexican workers when U.S. workers are available; it must not be so high as to make the program untenable, particularly for small businesses; and it must provide sufficient revenue to substantially offset the costs of implementation.

The second component is a safeguard cap that prevents the sudden inflow of workers while preserving responsiveness to changing conditions. The number of visas available under this agreement each year would be limited by start, step, and trigger quantities. New visas available would begin at a fixed quantity in the first year (start), could rise only by a fixed quantity in each subsequent year (step), and would be reset to the start quantity in cases of very high U.S. unemployment (trigger). The specifics of these components could differ between market segments.

The third major component of the model BWA program is portability. The most effective way to protect the rights of Mexican workers (as well as U.S. workers) is to ensure that they can leave employers without jeopardizing their legal work status in the United States. Allowing workers on BWA visas to be fully portable across employers within segments of the labor market, such as broad sectors of the economy, delimited geographic areas, or both, would increase portability and prevent problems with business planning. These segments must represent those where Mexican workers are already important, including nonseasonal sectors. There should be some exceptions in cases where Mexican workers could contract with one employer to protect them from potential excessive damages in cases of unplanned worker separations. Lastly, a BWA should place no restrictions on Mexican workers’ ability to join labor unions.

The fourth component of the BWA is Mexican recruiter certification to regulate international recruitment. This should also include enforcement actions against smugglers and recruiters who break the rules both at the border and within Mexico. The United States and Mexico would jointly develop a list of sanctioned recruiters that would be used exclusively for all workers. Sanctioned recruiting organizations could include private firms, labor organizations, other nongovernmental organizations, and state and local government agencies. And it should operate on both sides of the border and be open to new entrants with robust competition.

The fifth major component of the model BWA is a return or integration account for each worker that would create strong incentives for workers to return to Mexico and to follow the visa rules while working inside the United States and that would aid their eventual reintegration into Mexico. A small portion of each individual worker’s earnings would be paid into an account that could be liquidated only upon the worker’s return to Mexico shortly after the end of his visa. If the worker instead remains in the United States—lawfully or unlawfully—the account would be forfeited and transferred to U.S. Citizenship and Immigration Services to cover costs associated with visa fees or of the visa overstay.30

The model BWA corrects some of the errors from an earlier migrant worker agreement between the United States and Mexico—colloquially known as the Mexican Bracero Program—that expired in 1964. Design aspects tested in other bilateral migrant worker agreements around the world are the basis for these corrections as experience has proven that flexible regulation and bilateral cooperation are the only lasting solutions.

A U.S.-Mexican BWA Would Reduce Illegal Immigration and Increase Economic Productivity

Labor migration between the United States and Mexico has a rich, long history, with substantial shared economic benefits. Mexican workers tend to specialize in different, complementary roles and tasks than similarly skilled U.S. workers.31 While there may be some competition in the short term, this dynamic has raised the productivity of U.S. workers and created more and better jobs for U.S. workers.32 Labor mobility also brings benefits to Mexico—raising wages, productivity, and improving housing and education for workers’ children.

Despite these benefits to both the United States and Mexico, Congress terminated the last bilateral cooperation on labor migration in 1964. However, migrants continued to enter the United States unlawfully to work. The illicit flow of migrant workers across the border reduced the economic benefit of such movement and increased security and integration concerns while reducing public support for migration overall.33 Only by pursuing legal labor migration pathways in tandem with robust enforcement can the United States reduce unlawful arrivals.

With the militarization of the border and mass deportations, we are living through an era when the political discourse on immigration is plagued by fear and misinformation, elevating policies that are emblematic of our failed unilateralism. Yet our current policies do not consider the vast demand that U.S. businesses have for fundamental workers that ultimately increase and improve jobs for other workers.

Because of economic and demographic changes, as well as greater issuances of H-2 seasonal visas, the number of new arrivals from Mexico has fallen.34 They have only been partially replaced by an increase from Central America.35 However, while net flows remain low, gross flows in both directions will remain substantial indefinitely, given the huge Mexican and Mexican‐​American diaspora. Eased migration pressures from Mexico create the political space to implement a U.S.-Mexican BWA.

Increased migratory pressures from Central America present an opportunity for enhanced U.S.-Mexican cooperation by creating a BWA to reduce irregular migration, address concerns over worker abuse, and fulfill American demand for fundamental work. A U.S.-Mexican BWA could also serve as a model for bilateral agreements with Central American nations. U.S. policymakers have a unique opportunity to proactively manage labor market pressure on both sides to the benefit of all. Our model BWA between the United States and Mexico provides the way to do so.

About the Author
Michael Clemens is director of migration, displacement, and humanitarian policy and a senior fellow at the Center for Global Development. He also serves as a research fellow at the IZA Institute of Labor Economics in Bonn, Germany, and an associate editor of the Journal of Population Economics. He received his PhD from the Department of Economics at Harvard University.

29 Michael A. Clemens, Carlos Gutierrez, and Ernesto Zedillo, Shared Border, Shared Future: A Blueprint to Regulate US‐​Mexico Labor Mobility (Washington: Center for Global Development, 2016).

30 Giovanni Peri makes a version of this proposal. Giovanni Peri, “Rationalizing U.S. Immigration Policy: Reforms for Simplicity, Fairness, and Economic Growth,” Discussion Paper 2012-01, The Hamilton Project, Brookings Institution, May 2012.

31 Giovanni Peri and Chad Sparber, “Task Specialization, Immigration, and Wages,” American Economic Journal: Applied Economics 1, no. 3 (July 2009): 135–69; and Julie L. Hotchkiss, Myriam Quispe‐​Agnoli, and Fernando Rios‐​Avila, “The Wage Impact of Undocumented Workers: Evidence from Administrative Data,” Southern Economic Journal 81, no. 4 (April 2015): 874–906.

32 Giovanni Peri, “The Effect of Immigration on Productivity: Evidence from U.S. States,” Review of Economics and Statistics 94, no. 1 (February 2012): 348–58; and Ethan Lewis and Giovanni Peri, “Immigration and the Economy of Cities and Regions,” in Handbook of Regional and Urban Economics, vol. 5 (Amsterdam: Elsevier, 2015), pp. 625–85. This occurred both through encouraging capital formation and by raising total factor productivity—the collective productivity of all inputs to production, including both capital and labor, through changes in the technology and organization of production; Andri Chassamboulli and Giovanni Peri, “The Labor Market Effects of Reducing the Number of Illegal Immigrants,” Review of Economic Dynamics 18, no. 4 (October 2015): 792–821.

33 Michael A. Clemens and Kate Gough, “Can Regular Migration Channels Reduce Irregular Migration? Lessons for Europe from the United States,” Center for Global Development Brief, February 2018.

34 Ana Gonzalez‐​Barrera and Jens Manuel Krogstad, “What We Know about Illegal Immigration from Mexico,” FactTank, Pew Research Center, June 28, 2019.

35 Allison O’Connor, Jeanne Batalova, and Jessica Bolter, “Central American Immigrants in the United States,” Migration Information Source, Migration Policy Institute, August 15, 2019.