U.S. Inflation Continues to Rock Mexico's Economy Forcing More Migrants to the Border

The United States posted an inflation rate of roughly 6.8 percent at the end of 2021, putting it sixth among the countries that saw the highest rate of inflation increases among the world's 20 largest economies. Sitting next to the United States as number five on that list was its neighbor, Mexico.

Mexico ended 2021 with an inflation rate of almost 7.4 percent, Trading Economics reported. While 2021 saw the nation's economy grow by almost 6 percent. It, like the United States—which grew by 5.6 percent—now faces an uncertainty as it faces a steady wave of price increases.

Like its neighbor to the north, which has seen a wave of wage jumps, Mexico too has moved to increase the earnings of its workforce, with communities at the border hiking their hourly minimum wage rate from $1.33 an hour to $1.62 and hour—a 22 percent increase.

However, even with this measure in place, Mexican citizens may still be unable to avoid the rippling effects of a heated U.S. economy.

Ariel Ruiz, a Policy Analyst with the Migration Policy Institute, told Newsweek that because the U.S. and Mexican economies are so intertwined Mexico's economic success and failure tends to mirror that of America's. When American inflation drives up the price of parts and materials, Mexico's manufacturing sector hurts, and as that sector hurts, Ruiz said economic opportunities begin to dry up.

Migrants In Caravan That Travelled Through Mexico
Mexican citizens could turn to economic opportunities in the U.S. if inflation causes a shrinkage in the country's formal economy. Here, people climb a section of border wall on April 29, 2018 in Tijuana, Baja California Norte, Mexico. Photo by David McNew/Getty Images

"Inflation is driving shrinking economies on the border with Mexico and the United States," he told Newsweek. "The more of those [economies] become difficult to access, the more likely that those folks in northern Mexico will consider emigrating."

While Ruiz does not expect this issue to drive migration in the short term, he said long term inflation effects could spill across the Mexican economy, from its profitable manufacturing sectors to the less profitable industries that benefit off of manufacturing revenue. Ruiz said this could place significant pressure on the country's poorest cities, resulting in a potential wave of migration.

Already, officials at the Southwest border of the U.S. have seen a steady flow of single adults of Mexican citizenship have made their way to the border. Since March 2021, border officials have encountered over 50,000 single Mexican adults each month, with that number coming close to 60,000 in both November and October. Tony Payan of Rice University's Baker Institute for Public Policy told Newsweek in May that these demographic tends to migrate for economic reasons.

While this demographic does not currently make up a bulk of the nearly 174,000 who came to the border, that trend could change if stable job opportunities shrink and Mexicans are pushed to make a living carrying out informal labor that does not have the benefit of a consistent paycheck.

"If industries continue to shrink, Mexicans will be more prone to work in informal labor, and that informal labor could be the first step to making a decision to migrate," Ruiz told Newsweek. "The U.S.-Mexico border is so intertwined that whatever happens on the one of the sides is going to affect the other."