The end of accelerated migration: financial crisis and the criminalization of immigration

After the mid-2000s, migration to the United States decreased and return migration increased sharply. Arroyo et al. (2010, p. 13) demonstrate that between 2005 and 2008 there was almost a 50 percent decrease in first migrations from Mexico: from 1.1 million to 560,000. Using Mexican census data, Passel, Cohn, and Gonzalez-Barrera (2012) concluded that migration from Mexico to the US fell from 2.94 million in the 1995-2000 period to 1.37 million hi the 2005-2010 period.

Mexican and US government data show sharp rises in return migration and deportations during the first years of the twenty-first century. While from 1996 to 2000 there were 267,150 individuals who returned to Mexico, from 2005 to 2010 this number increased to 825,609, representing a growth of 209 percent in return migration. From 2010 to 2015, 442,503 individuals returned to Mexico, a 46.4 percent decrease over the previous five years, but still significantly higher than the returns registered in the late 1990s (BBVA & Consejo Nacional de Población, 2017, p. 94). With fewer migrations to the US and more returns to Mexico, migration flows between the two countries reached a “net zero” equilibrium from 2005 to 2010 (Passel et al., 2012) and a “below net zero” flow from

2009 to 2014 (Gandini, Lozano-Ascencio, & Gaspar, 2015; Gonzalez-Barrera, 2015; Levine, 2015; Martinez Canales, 2012). The financial crisis of 2007-2009 and US immigration policy were the most important factors behind these significant changes.

Economic and financial crisis

The Great Recession in the United States officially started in December 2007 and ended in June 2009. However, households in the country showed signs of distress before and for many years after this period (Harvey, 2010; Kalleberg & Von Wachter, 2017). In 2006, the rate of home foreclosures increased sharply. Low-income minority areas succumbed first, and, later, middle-class neighborhoods were affected, leaving large tracts of housing abandoned throughout the country. Millions of homeowners defaulted on toxic loans made through predatory lending practices. In total, there were 7.4 million foreclosures between 2007 and 2015, the first year the unemployment rate remrned to pre-recession levels (CoreLogic, 2017). By late 2008, the subprime mortgage crisis “had led to the demise of all the major Wall Street investment banks, through change of status, forced mergers or bankruptcy” (Harvey, 2010, p. 2). The excessive deregulation of the financial sector from the 1980s to the 2000s in the United States paved the way for the rise of the so-called “shadow banking system” whose toxic financial instruments, combined with bankers’ greed and recklessness, created untold wealth for a few and devastated millions (Harvey, 2010; Tett, 2009). The creation of vast linkages among global financial markets, a process largely consolidated in the 1980s, ensured the spread of the crisis to other parts of the world.

Unemployment increased more rapidly during the recession compared with other recessions in recent decades (US Bureau of Labor Statistics, 2012). Unemployment jumped from 5.0 percent in December 2007 to 10.0 percent in October 2010, slowly returning to 2007 levels by 2015 (US Department of Labor, 2019). Other effects of the crisis continued to linger. Home ownership fell from 68.9 percent in the fourth quarter of 2006, before the recession, to 63.7 percent in the fourth quarter of 2016. It has not recovered to pre-recession levels, achieving only modest increases to 64.8 percent in the fourth quarter of 2018 (US Census Bureau, 2019). The labor force participation rate (LFPR) has also not recovered to its pre-recession level. In November 2007, one month before the recession, 66.0 percent of the population was employed. As of September 2015, the LFPR fell to a low of 62.4 percent and has hovered around 63 percent up until this writing (July 2019) (Federal Reserve Bank of St. Louis, 2019).

The Great Recession had an enormous impact on economic inequality. While upper-income families had median wealth that was greater in 2017 than before the start of the Great Recession, lower-income white and middle-income black and Hispanic household median wealth was reduced almost by half during and after the recession. In 2017, the gap between lower- and middle-income households and upper-income families were the highest ever recorded (Kochhar & Cilluffo, 2017).

The financial crisis had important effects on the labor markets that employed large numbers of Mexican male immigrants. The loss of employment, particularly in construction, accounted for major changes in the demand of unskilled labor from Mexico (Levine, 2015; Villarreal, 2014).

During the most severe years of crisis (2008-09), Latinos lost a proportionate part—14%, equivalent to 863,800 jobs—of the 6.2 million jobs destroyed in the United States hi those years. The most striking case was the construction industry, where Latinos lost 720,000 jobs.

(Levine, 2015)

Aysa-Lastra and Cachón (2012) show that the employment of Latino immigrants was more sensitive to economic cycles when compared to total employed population. That is, the number of Latinos employed grew faster during the expansionary 2000-2008 period and declined more rapidly from 2008 to 2011. While total employment in the United States fell 1.4 percent annually from 2008 to 2011, Latino employment fell 2.6 percent annually during the same time period. Levine argues that the effect of the Great Recession on labor markets is the main factor that has slowed the arrival of migrant workers, especially the undocumented (Levine, 2015). Passel and Cohn (2019) argue that the number of unauthorized Mexican immigrants has declined sharply in the last ten years because more have left than arrived. This population constitutes a minority of the unauthorized population—47 percent—for the first time since the early 1960s. Some recent studies suggest that Mexicans in the United States were hit hard by the recent recession. Unfortunately, discussions on gender, crisis and return have, until recently, been few, eclipsed by the focus on Mexican male circular migration (Rothstein, 2016, pp. 9-10). In Chapters 5 and 6 we will discuss in greater detail how the economic crisis affected Pahuatecos and Zapo-titecos in the United States.