MEXICO'S JOB-CREATION PROBLEM
August 3, 2007
Many Mexicans leave their families, friends and homes to make the arduous journey to the United States because their own country has a job creation-problem, says Joel Kurtzman, senior fellow at the Milken Institute.
- Between 2000 and 2006, Mexico created only 1.4 million jobs.
- During each of those years, between 400,000 and 700,000 illegal immigrants arrived in the United States from Mexico.
- The number of illegal immigrants from Mexico was roughly equal to the number of jobs not created in Mexico.
One of the problems, as research shows, is that big companies -- especially big Mexican companies -- do not create many jobs, says Kurtzman:
- Jobs are created by entrepreneurs who start companies from scratch; to perform their job-creating function, entrepreneurs need access to capital, which is where Mexico falls short.
- According to the Milken Institute's 2006 Capital Access Index, Mexico ranks a dismal 43rd with regard to capital access out of 122 countries studied.
- To compare, the United States, the world's top job-creating developed country, ranks No. 4, and Hong Kong, Asia's most vibrant, entrepreneurial hub, ranks No. 1.
Solving the immigration problem will not happen unless Mexico solves its job-creation problem. To do that, Mexico needs to modernize and open up to competition its antiquated and concentrated economic and financial systems, says Kurtzman. For decades, Mexico has argued that if it were to do so, America would take over. It's time to dispel that urban myth with a little reality. If Mexico can succeed in providing capital to risk-taking Mexicans, they will create jobs in Mexico, not just in the United States.
Source: Joel Kurtzman, " Mexico's Job-Creation Problem," Wall Street Journal, August 3, 2007.
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