Mission to Mexico
The spirit of Robert Orr has lately been seen moving upon the interface of Indiana and the world economy. As Governor from 1981-89, Bob Orr led seventeen trips of Indiana businesspersons abroad, more than all of his predecessors combined. When he took office, there were 18 Japanese companies located in Indiana; when he left there were nearly 200. More than 45,000 Hoosier workers employed by Japanese companies today have good jobs thanks in part to Gov. Orr’s tireless efforts to attract foreign investment.
We were reminded of these accomplishments in August when a delegation of more than 80 business and civic leaders accompanied Governor Mitch Daniels to Taiwan and Japan to reaffirm and deepen relations from the days of Orr.
Less prominent in the news than Gov. Daniels’s trip to Asia was a delegation of twenty Indianapolis business leaders who traveled to Mexico September 11-14. Organized by Mexican Consul General Sergio Aguilera and led by Mayor Bart Peterson, this trip could be just as important for the state. More than forty percent of foreign investment flowing into Indiana comes from Japan, but we sell a lot more stuff to Mexico. After Canada, Mexico is the second largest export market for Indiana. In the past decade since the North American Free Trade Agreement went into effect, Indiana’s sales to Mexico increased eightfold. Last year the state exported more to Mexico than it did to Japan and Taiwan combined … plus what we sold to Germany, the Netherlands, China, Hong Kong, and Italy.
The mayor’s mission to Mexico may pay off for Indianapolis very soon. Half of the goods coming into the US enter through the terribly congested Los Angeles-Long Beach ports, causing costly delays and uncertainty. Thus an increasing volume of American imports from Asia being shipped into the Mexico’s Lázaro Cardenas and Manzanillo ports, then transported across the US through the newly consolidated “NAFTA railway.” The pieces of this new supply and distribution network are still being put into place. Most essential is a logistics hub capable of servicing such a large volume of freight.
Until the mayor’s mission to Mexico, Indianapolis had not been considered. Because the business and policy leaders of Indianapolis demonstrated their commitment to increasing our connections, a delegation of Mexican transportation and government officials will arrive in Indianapolis October 10 to discuss the possibility of major investments in “the Crossroads of America.” If Indianapolis emerges as a regional logistics hub, it will mean hundreds of good jobs.
The trip to Mexico may have been crowded out of the headlines by Hurricane Katrina, and more local reporters might have joined the group if the Colts had been playing in Mexico City as they played in Tokyo. But if they had known about the trip, some Hoosiers might have found the mission to Mexico unsettling. Some might have thought the mayor was helping export jobs to Mexico, leaving Indianans unemployed. How can a Hoosier worker compete with a Mexican worker who would be delighted to find a job paying four dollars an hour?
But how hard should we fight to keep low skill and low wage jobs here? An Indiana business that can pay Mexican workers four dollars an hour for unskilled labor may be better able to survive global competition with companies paying Chinese workers much less than that. Shifting the $4 per hour jobs to Mexico may increase the chances of keeping the $34 per hour skilled jobs in Indianapolis or Anderson. The challenge for us in Central Indiana isn’t to protect low pay jobs but rather to make sure all of our workers have the education and opportunities they need for high pay jobs.
The recent trade mission to Mexico might also have been disturbing to people who fear increased trade with Mexico could also mean increased immigration. Some feel increasingly anxious about millions of undocumented and illegal immigrants in this country. Some are bothered by legal immigrants as well. Indiana’s Latino population is doubling in size every four or five years, leading some to worry that we are becoming a divided culture, with Spanish- and English-speakers co-existing uneasily at best. Increasing economic ties with Mexico, they fear, could hasten our way down this path.
American businesses investing in Mexico, however, should reduce the flow of illegal immigrants to the US by providing jobs for wages that are much higher than what is now available in Chiapas or Monterrey. A worker seeking to make a better life for her family is less likely to make the dangerous illegal trek north if she can find decent paying work at home.
In general, however, increased trade may well lead to more immigration, and that’s a good thing because more immigrants mean more economic growth. In the globalization sweepstakes of the 21st century, the communities that best integrate newcomers into their economies will win. How can you tell immigrants are integrating well? They enroll their children in local schools, they purchase property, they call the police when they are the victims of crime. Local institutions are necessary to transform hard-working immigrants into productive and secure citizens. The process of integration begins long before newcomers arrive in Indianapolis. Future missions from Indianapolis to Mexico will be vital as they evolve beyond the meetings with Mexican government officials and businesses, and reach out to partnerships with nonprofit organizations, educational institutions, and religious groups.
Controversies over changing Indiana’s relations with the global economy are not new. Twenty years ago, Gov. Orr’s missions to attract Japanese investment drew much criticism. The jobs in Japanese factories, it was said, would be non-unionized, low paying, and would require workers to gather each morning to sing the company’s anthem in front of the company flag. The great achievement of Robert Orr was not opening Indiana’s economy to the world, which was inevitable. It was helping Hoosiers understand that opening to the world properly would be hard work, but it would pay off in the end. Today, when Gov. Daniel’s trip to Japan is a cause for optimism and celebration, hardly anyone remembers why Japanese trade and investment were once unpopular. Likewise in years to come, as economic relations between Indiana and Mexico continue to grow and flourish, it will be hard to recall why a far-sighted mission to increase our connections with Mexico could ever be questioned.
