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The Hidden Costs of Increased Border Security

Richard Dayoub - What you don't know will hurt you


Is there a more "front of mind" issue that we are facing as a nation than border security and immigration policies?  One of the many challenges we are facing on these subjects is that so few understand that while related and interreliant, they are actually two very different issues.  Both are having a dramatic impact on our nation and similarly, in ways most Americans do not understand. 

It's no wonder most Americans are unaware of the relationship between current US policies and our economy.  Unless you happen to live on the border with Mexico or work for companies that have a presence in Mexico, you probably don't realize how reliant the US economy is on our trade relationship with Mexico.  To put a number to it:  $600 billion plus per year and growing.  That's just a number.  What's behind that number?  Hundreds of American manufacturing companies and manufacturers across the globe have a presence in Mexico employing hundreds of thousands of Mexicans.  More importantly, American manufacturers employ hundreds of thousand of American workers, whose jobs are interdependent on their counterparts in Mexico.  Before it becomes a finished product (an American automobile for example), thousands of its parts have crossed the Mexican border dozens of times in both directions as part of the shared manufacturing process.  There is a name for it:  Twin Plant manufacturing.  The Mexican name is maquila.  This subject is far too complex to cover completely in this issue but we can discuss one or two aspects and why our manufacturing based economy is facing very costly challenges.  

The increased security at the ports of entry have slowed all trans border commerce to a crawl.  In real numbers, a tractor trailer hauling finished product from a plant in Mexico to the U.S., would normally experience one to two hour lines at the ports of entry.  Today, that same shipment is taking as long as one to two days.  The trucking company has to have a driver in the vehicle waiting their turn to pass through security inspection and so they don't lose their place on line, the driver has to remain in the vehicle for all of that time.  In many cases, the trucking companies send replacement drivers to sit in the vehicle while the primary driver gets needed rest until the truck has passed through to the US side.  These incredibly long delays increase the cost of production which will be felt by the consumer in the form of higher prices.  Under normal conditions, that truck and driver would cross border two or three times a day hauling more product each time, helping to improve the efficiencies and thus keeping production costs as low as possible, making their products more affordable to the American consumer.  Products that American consumers take for granted as affordable today could easily become out of reach:  electronics, appliances, automobiles.  It gets much worse.  If the US government doesn't modify its current policies quickly, many of these American manufacturers will be forced to look for more affordable production options and that does NOT mean expansion in the US.  It means production in more affordable economies around the world, further off shore than Mexico. 

Another very important fact that is lost in the current vitriolic debate in Washington, is that 35 US states generate more than a billion dollars a year in manufactured products that are sold to Mexico.  If Mexicans can no longer afford to buy our products, how many tens of thousands of American jobs will be lost if the US manufacturers are forced to move their production off shore because of the increased costs they are facing cannot be passed on to their consumers, our Mexican neighbors, you and me? 

I don't normally write about politically sensitive issues but I've made an exception on this subject because it should not be about Republican or Democrat, conservative or liberal.  It should and is about our nation's economy, our nation's workforce, the future of American labor and the affordability of consumer products for American families.