A Different Perspective on Mexico


The monologue on Mexico focuses on those crossing the border into the US. In fact, that’smexico a very narrow view of the relationship between the two countries.

According to the State Department, there are one million US citizens living in Mexico. However,

  • That figure was first reported in 2014. The number has been increasing since. The US government doesn’t  track residents living out of the country as long as they pay their taxes.
    • One US expat realtor reports a 40% increase in home sales in one US expat enclave just in the last year.
    • A commentator in The Guardian estimates the number of Americans living in Mexico as closer  to two million.
  • A number of the US citizens living in Mexico aren’t there legally (estimates vary from 50 to 90 percent). The Mexican government isn’t particularly good about tracking them, and doesn’t deport them. In fact, Mexico abolished a mandatory prison sentence for undocumented immigrants in 2008. Those who have not committed a crime are simply allowed to stay.

CNN reports that there are four reasons that Americans give for moving to Mexico:

  • Climate
  • Culture
  • Cost of living
  • Escaping the US political climate

One American comments that doctors in Mexico are more helpful and enjoyable to visit than are doctors in the US.

It’s cheap. It’s very patient-oriented. It’s like my father practiced in Illinois about 50 years ago, without all the paperwork.

Many Americans, including some in Congress, view Mexico through the prism of an out-dated stereotype. Of course, if that changes, more Americans might move there.


  1. Instituto Nacional de Estadística y Geografíca. http://www.inegi.org.mx/\
  2. Adam Taylor, “Mexico has its own immigration problem: American retirees,” The Washington Post, 21 November 2014. https://www.washingtonpost.com/news/worldviews/wp/2014/11/21/mexico-has-its-own-immigration-problem-american-retirees/?utm_term=.dc11626a341f
  3. Leyla Santiago and Traci Tamura, “South of the border, US expats have a different take on Mexico,” CNN 24 June 2017.  http://www.cnn.com/2017/06/24/americas/mexico-american-expats/index.html
  4. “News Report: 91.2% of All Americans Who Live in Mexico Are Living There Illegally,” Latino Rebels, 5 March 2017. http://www.latinorebels.com/2017/03/05/news-report-91-2-of-all-americans-who-live-in-mexico-are-living-there-illegally/
  5. Millions of Americans live in Mexico. Can we continue to coexist?” The Guardian, 23 January 2017. https://www.theguardian.com/commentisfree/2017/jan/23/trump-futures-mexico-us-interlocked-wall-border

Immigration and the New American Reality


“I don’t want my child to grow up in the US.”

That’s a simple and direct statement from a financial professional who moved to Europe earlier this year. Her child will grow up learning between four and six languages and without the attitude/belligerence she sees in US schools. Plus college and healthcare are free.

Europeans pay high taxes. However, because so many expenses are included in those taxes, they have more money available to spend than most Americans do. That’s driving a faster economic recover in Europe than the US is seeing.

That prompted me to look at the data on migration. What are the trends? You might be surprised.

  1. Both legal and illegal immigration peaked prior to the recession in late 2008. The trends since are downward. The declines started during the Obama administration.
    • The illegal immigrant population peaked at 12.2 million in 2007.(2)
  2. Most illegal immigrants living in the US have been in the US for more than ten years. They are homeowners and taxpayers.
  3. Mexico no longer accounts for a majority of illegal immigrants. The majority now from from a combination of Central America and Asia.
  4. Mexico provides the largest number of LEGAL immigrants to the US. (1) Most Hispanic residents in the US are legal residents. (3)
  5. Recent immigrants from Mexico tend to work in the US for a few years and then return to Mexico. Pew reported in 2012 that net immigration from Mexico was zero, with the number of people leaving the US matching the number entering.
    • This “breakeven” has little to do with US immigration enforcement. People are leaving for a lower cost of living and better social services.

FT_17.04.17_unauthorized_update_2015-1The State Department estimates that 9 million US (non-military) citizens are now residents of other countries. That’s up from 4 million in 1999. However, the government has no formal mechanism for tracking citizens who move overseas. The actual number could be lower or much higher.

  • Seniors are part of the out-migration. Financial advisors recommend considering moves to places like Costa Rica in order to be able to maintain a reasonable standard of living on Medicare. (5)

The US is changing relative to other countries. There are a growing number of valid reasons for not wanting to live here, and that will have an impact on the economy and employment in the future — probably driving more jobs and business investment offshore. Don’t expect driving people and money out of the US to improve job prospects and the economy here. That’s naive in the extreme.


  1. Homeland Security, “Yearbook of Immigration Statistics 2015.” https://www.dhs.gov/immigration-statistics/yearbook/2015/
  2. Jeffrey Passel and D’Vera Cohn, “As Mexican share declined, U.S. unauthorized immigrant population fell in 2015 below recession level,” Pew Research Center, 25 April 2017. http://www.pewresearch.org/fact-tank/2017/04/25/as-mexican-share-declined-u-s-unauthorized-immigrant-population-fell-in-2015-below-recession-level/
  3. Jie Zong and Jeanne Batalova, “Frequently Requested Statistics on Immigrants and Immigration in the United States,” Migration Policy Institute, 8 March 2017. http://www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states
  4. US State Department, “CA by the Numbers,” updated June 2016.  https://travel.state.gov/content/dam/travel/CA_By_the_Numbers.pdf
  5. “Retire Overseas . . . and Live Better for Less . . . ” International Living, undated.  https://www.internationalliving-magazine.com/?gclid=COyAv7-tytQCFYWNswodZNkMcw

Universities and International Students


The world is complex. One of the problems in making public policy is that for every action, there is a reaction that isn’t anticipated and usually isn’t desired.

Rules about immigration and visas are a case in point.

International students have formed a core resource for many smaller, private colleges in the US as well as for graduate programs at larger universities.  That core is eroding, leaving the future of some schools and programs in doubt. (7)

Education isn’t factored into the US balance of payments, but it should be. It’s been a major source of funds for the US economy. Students from elite families in Europe, the Middle East, Latin America and Asia don’t get financial aide at US schools. Instead they pay full freight, bringing hard cash into the US economy. Overall, more than 85% of all college students in the US receive financial aid, as compared with 20% of international students studying in the US. (2,)

In 2015, there were over 1 million foreign students in US colleges and university, accounting for 5% of the total student population. The top schools for hosting international students (undergrad and graduate) were

  • NYU
  • USC
  • Columbia
  • Arizona State
  • Univ. of Illinois
  • Northeastern (3)

The top schools in terms of the percent of undergraduate enrollment from outside the US are

  • Florida Institute of Technology (32.9% from outside the US)
  • New School (31.7%)
  • Illinois Institute of Technology (29.8%)
  • Univ of Oklahoma (26.7%)
  • Lynne Univ (23.0%)
  • Carnegie Mellon Univ (20.9%)

While domestic applications for graduate school have declined over the last 10 years, until very recently, growth in international applications had increased. In 2015, 2/3 of the applicants for graduate programs at Cornell were international students.

The US is experiencing a troubling drop-off in applications from international students for graduate and professional degrees at US universities. The slowdown started in 2015, and may have been exacerbated by election campaign rhetoric and travel bans.

Demand for MBA degrees started to slide domestically almost a decade ago. Schools changed their product offerings — basically reinventing themselves — to survive financially. (8) As tuition and fees have soared, fewer Americans could afford or found adequate value in these degrees. Online courses created new options. They weren’t necessarily better than traditional classroom instruction, but they were (and remain) cheaper.

Like many smaller private colleges, some MBA programs turned to foreign students to fill enrollment gaps left by the flagging demand in the US. In the example of the University of Rochester’s Simon Business School,

The school recruited in more than a dozen countries last year, holding events in Buenos Aires, Cairo, Taipei, and Istanbul, among other cities. The efforts reflect the school’s “very strong commitment to global diversity within its student body,” says Rebekah Lewin, assistant dean of admissions and financial aid at Simon, where about half of the 98 full-time MBA students in the class of 2017 are from overseas. (6)

However, the international market for the US MBA is now easing. In 2014, 60% of MBA programs saw growing applications from overseas. That fell to 39% in 2015, and to 31% in 2016.

STEM programs rely on international students, and there has been a worrying drop in applications. (5)

  • UMass has seen a 30% drop in international applications for electrical and computer graduate programs this year.
  • Vanderbilt has seen an 18% drop in international student applications for its graduate engineering school.

A decline in international students will affect universities financially. As noted in the Science article,

Such declines could have a major impact on a university’s bottom line, although calculating its magnitude is not straightforward. The federal government heavily subsidizes graduate education in the sciences and engineering, so most doctoral students don’t have to worry about tuition bills. But universities generate considerable revenue from professional master’s degree programs, a subset of all master’s training. And in those programs, international students at public universities pay tuition rates that are much higher than for in-state students. (5)

So, one of the unintended consequences of the current anti-immigrant hoopla may be a hit on the value of the US dollar as well as a weakening of higher education in the US. Whether we see a demand for taxpayer bailouts, or we see programs and schools simply close, remains to be discovered.

That  makes the decision by New York State to make college free to residents earning less than $125,000 per year triply smart:

  • The action alleviates pressure on schools from declining overseas applicants;
  • It provides a major incentive for the workforce to stay in the state;
  • It frees up money that consumers can use to fuel the local economy.


  1. Reem Heakel, “What Is the Balance of Payments?” Investopedia, 19 April 2017. http://www.investopedia.com/articles/03/060403.asp
  2. National Center for Education Statistics, “Fast Facts.” https://nces.ed.gov/fastfacts/display.asp?id=31
  3. Laura McKenna, “The Globalization of America’s Colleges,” The Atlantic, 18 November 2015. https://www.theatlantic.com/education/archive/2015/11/globalization-american-higher-ed/416502/
  4. Caroline Howard, “50 Best Colleges for International Students 2016,” Forbes, 28 Sept. 2016. https://www.forbes.com/sites/carolinehoward/2016/09/28/50-best-u-s-colleges-for-international-students-2016/#5a21f1137566
  5. Jeffrey Mervis, “Drop in foreign applications worries US engineering schools,” Science, 14 February 2017. http://www.sciencemag.org/news/2017/02/drop-foreign-applicants-worries-us-engineering-schools
  6. Nick Lieber, “The Selling of the American MBA,” Bloomberg, 26 March 2016. https://www.bloomberg.com/news/articles/2016-03-18/the-selling-of-the-american-mba
  7. Stephanie Saul, “Amid ‘Trump Effect’ Fear, 40% of Colleges See Dip in Foreign Applicants,” 16 March 2017. https://www.nytimes.com/2017/03/16/us/international-students-us-colleges-trump.html?_r=0
  8. Sherrie Negrea, “The new business of b-schools,” University Business, 22 January 2016. https://www.universitybusiness.com/article/new-business-b-schools
  9. Ferran Powell, “10 Universities That Attract the Most International Students,” US News and World Reports, 5 July 2016. https://www.usnews.com/education/best-colleges/the-short-list-college/articles/2016-07-05/10-universities-that-attract-the-most-international-students


Free College Tuition: a new reality in USA


Free college tuition — it’s back!martin-luther-king-anger-quote1

There has been a continuing debate as to whether college education is a privilege or a right of citizenship. In an age in which demand for unskilled labor is fading, will people without college be employable in 10 or 20 years?

The US has taken one position on this; Europe and the Commonwealth countries, the opposite. Today, it’s possible for a US family to put four children through college in Europe at the price of sending one to college in the US. For Europeans in several countries, college is free.

In the “golden age” of the US economy after World War II, college was either free or very inexpensive in the US. When I was in high school, City College of New York and the University of California still were free to residents.  Ronald Reagan eliminated free tuition in California.  New York was earlier.

On February 7th, San Francisco because the first city in the current era to offer free community college education.

San Francisco Mayor Ed Lee announced at a press conference yesterday that, starting next fall, community college will be tuition-free for all San Francisco residents through the City College of San Francisco.

As first reported by the San Francisco Chronicle, San Francisco would become the first city in the nation to make community college free to all city residents. Any student who has lived in San Francisco for at least one year – regardless of income – is eligible.

“To California residents who are living in San Francisco, your community college is now free,” Lee said at the press conference. (1)

New York Governor Andrew Cuomo announced a plan in January to make all state, city and community colleges free to residents. There is now a bi-partisan budget deal to make that a reality.

Budget negotiators struck a deal late Friday that could make New York the largest state to offer tuition-free public higher education.

The $163 billion state budget agreement includes the Excelsior Scholarship, which covers tuition for any New Yorker accepted to one of the state’s community colleges or four-year universities, provided their family earns less than $125,000 a year. (2)

Interesting question: Why would you want to live in an expensive state like New Jersey when your kids can attend college for free next door? Or leave San Francisco for anywhere?



  1. Zack Friedman, “Free College: San Francisco Joins New York With Tuition-Free Plan,” Forbes, 7 Feb. 2017. https://www.forbes.com/sites/zackfriedman/2017/02/07/free-college-san-francisco/#590c8b482bb6
  2. Danielle Douglas-Gabrielle, “New York set to become first state to offer free tuition at public four-year colleges,” The Washington Post, 8 April 2017. https://www.washingtonpost.com/local/education/new-york-to-become-the-largest-state-to-offer-tuition-free-public-higher-education/2017/04/08/3fe0563a-1c8b-11e7-9887-1a5314b56a08_story.html?tid=sm_tw&utm_term=.e16eea88beb6


Best and Worst States for Business


24/7 Wall Street has published a lengthy article assessing the business climate in the %) total-county-population-change-2016.pngUS states.  It’s a fairly comprehensive analysis, looking at 50 different criteria, including taxes, labor force characteristics, infrastructure, etc.

The bottom five states are fairly predictable.  The top five aren’t, including political polar opposites.

Best five states for business:

  1. Utah
  2. Massachusetts
  3. Idaho
  4. Colorado
  5. North Dakota

Utah, Massachusetts and Colorado benefit in particular from a  highly educated labor force.  That’s important for the technology sector that’s likely to drive economic growth in the future.  Idaho and North Dakota are pro-business in the sense of having weak unions and low wages.

Massachusetts is the one state in the Northeast that isn’t losing population.

Five worst states for business, starting from the bottom:

  1. Louisiana
  2. Mississippi
  3. West Virginia
  4. Maine
  5. Pennsylvania

The bottom states share a common lack of an educated work force.  Fewer than 1/4 of workers in Louisiana and Mississippi have bachelors degrees, and the percent employed in science and technology is in the very low single digits.  West Virginia and Maine share these problems, just to less of an extreme.  The local economies suffer from high poverty rates.  Given the trend to robotize unskilled labor positions, the future in these states is scary.  All five states are losing population.

Pennsylvania represents a special case of self-inflicted problems.  The state has a poorly maintained highway infrastructure which is a drag on business growth.  Pennsylvania really is bipolar.  There are highly educated nuclei in Philadelphia, Pittsburgh and State College, and then there’s everywhere else.  It’s the modern version of Lincoln’s “house divided against itself”.


Land of Opportunity, Revisited


In a post earlier this month, I commented on the declining mobility of American society.  Why that matters is that job growth in the recovery from the Great Recession of 2008 has been uneven. So has growth in personal income.  Is where you are the best place to be?

The areas with the highest rate of job growth, for the most part, simply aren’t where the people are.

The five largest states in terms of population are (Census, July 1, 2016 estimate)

  1. California  39,250,017
  2. Texas  27,862,596
  3. Florida  20,612,439
  4. New York  19,745,289
  5. Illinois 12,801,539

The five top states for job growth are

  1. North Dakota  20.7%
  2. Texas  15.3%
  3. Utah  13.6%
  4. Colorado  11.8%
  5. Washington  9.8%

Washington is the anomaly.  There has been sufficient migration, largely from California, such that despite growth, the unemployment rate has increased.

If we rank the states in actual numbers of jobs gained, the big winners are

  1. Texas  1,612,800 jobs
  2. California  1,134,100
  3. New York  644,800
  4. Florida  531,100
  5. Massachusetts  272,000

For every winner, there’s a loser.  The five states that have lost the most jobs since the Great Recession are

  1. Wyoming   -5.2%
  2. Mississippi  -2.3%
  3. New Mexico -2.2%
  4. Alabama  -1.9%
  5. Connecticut  -1.6%

Of course, percentages don’t tell the whole story.  Wyoming has a smaller economy than Connecticut, so a loss of 15,400 jobs is a high percentage of total jobs in Wyoming than a loss of 27,300 jobs is in Connecticut.

Job growth doesn’t correspond to income growth.  Texas shows high job growth spi0616coupled recently with declining per capita income.  Maine has a declining population but is showing good per capita income growth, in part due to a shortage of workers.

In some states, there’s a clear logic to people staying put.  In California, the out-migration is probably more due to housing costs than jobs, even though it will make it harder for employers to keep jobs filled.  However, there are good reasons for people to be leaving the deep South and areas of the Plains and West.  Mississippi is a particular problem as the data I’ve posted shows that they don’t fund social services, don’t fund schools and don’t do an adequate job of providing work for residents.

What we don’t know is the size of the Gray Economy in each state.  That’s employment that’s off the books — that people try to hide from the IRS.  It exists and is potentially large.  A poster child for that is a news stand in NYC that was reporting $30,000 in annual sales and conducting $800,000 in off the books drug sales annually.  (Sadly, I read this years ago in The New York Times and can’t find the citation for it.)



Land of Opportunity?


From the first settlement of America, there was always the option to pack up, move and start over.  Everyone did it, from immigrants to future presidents (for example, Abe Lincoln).  Most of the time, migration was driven by the search for a better life (the westward wagon trains of the 1800s, the Gold Rush of 1848), sometimes for religious freedom (the Mormon migration to Utah territory), or sometimes by sheer necessity (the Okie migration from the Dust Bowl of the 1930s).  In every case, migration was an important option.

Migration promotes commerce.  People who move spend money on transportation and housing.  Their old homes become starter homes for new families.  Real estate  agents make commissions on sales.  Furniture companies sell to the home buyers.  1479417249793

To some extent, this is no longer true.  When the oil fields in the Dakotas opened a decade ago, some people moved, but not the masses of the past.  Some states (e.g., Maine) no longer have enough working age residents to perform available jobs, but no one is moving to take those positions.  Maine is losing people at a steady pace.

The numbers shown are incomplete.  What we can’t see, because the government doesn’t  report it, is migration outside the US.  Estimates range from 3 million to 9 million Americans living outside the US.  How many are leaving each year?  We don’t know.

I know of a doctor who is sending his children to college outside the US.  Will they return?  I know of a waiter is is moving to Brazil after graduation from school here.  I have former coworkers who live in Europe and have done so for years. I know one teacher who now works quite happily in Saudi Arabia.  Financial publications are advising Americans to retire to Central America, where the lower cost of living makes Social Security go much further than it does in the US.

There are a lot of reasons for emigration from the US:  better job opportunities, better access to health care, better social services, lower cost of education, lower cost of living.

Some countries, notably Canada, have restricted the ability of Americans to migrate there.

The general sense is that Americans have become less mobile, although that might not be true.

  • It could be that modern adventurers are leaving during their college years and the government simply doesn’t know that. The modern counterparts of Sam Houston and Kit Carson have left the building.  How does their absence change our culture?
  • Or conversely, as some analysts seem to believe, people have given up on trying to better themselves.  They no longer believe in the dream.  How does that change our culture?

What you need to know:

Reduction in mobility within the US is going to be a drag on the real estate market.  The volume of sale transactions will decline, and will affect businesses that rely on those transactions.  Conversely, as people stay in homes longer, home improvement business will expand.



  1. http://census.gov/library/visualizations/2016/comm/cb16-189_migration.html?CID=cb16-189_migration
  2. Sullivan, Bob, “Why Aren’t Americans Moving Anymore?”  Credit.com.  6 January 2017.  http://www.aol.com/article/finance/2017/01/06/why-arent-americans-moving-anymore/21649372/
  3. von Koppenfels, Amanda Klekowski, “Americans Abroad: A Disillusioned Diaspora?” Migration Policy Institute, 29 July 2015.  http://www.migrationpolicy.org/article/americans-abroad-disillusioned-diaspora
  4. https://www.internations.org/expat-insider/2015/us-americans-abroad