California’s Economic Relationship With Mexico Generates $159B.

A new report by the Toms Rivera Policy Institute(TRPI) at the University of Southern California (USC) estimates the bilateral relationship in2002 between California and Mexico was worth an estimated $159 billion per year and an additional 200,000 jobs to the state. The report, The Economic Impact of the Mexico-California Relationship, analyzes U.S. Department of Commerce, U.S. Census and other governmental sources to determine the impact of trade, investment and tourism as well as the demographics and fiscal effect of the Mexican-origin population in the state.

The Mexican-origin population in California comprises 25% of the total state population and consists of nearly 9 million people – 3.7 million of whom are foreign born and approximately 5 million of whom are native born.

With an estimated purchasing power of $108 billion in 2000 ($51 billion foreign born and $57 billion native born), the Mexican-origin population accounts for almost 10% ofCalifornia’s total purchasing power.

“The bond between the state of California and Mexico extends far beyond a cultural one. It is a complex economic relationship that provides real opportunity for both parties,” saidHarry Pachon, president of TRPI and professor of public policy at USC.

Mexico is California’s main trading partner; the state exported $16.1 billion in 2002 and is the state with the most export-related jobs in the nation. Such employment accounts for 10% of California’s total private sector employment, indirectly supporting approximately 177,000 jobs. Imports from Mexico have grown significantly since the passage of the North American Free Trade Agreement (NAFTA) in 1994 – from $9 billion in 1995 to $20 billion in 2002.

The Mexican-origin population in California owns or is paying a mortgage on approximately 5% of the total housing units in the state. Additionally, this population pays approximately $8.6 billion in rent payments per year.

The value of property, plants, and equipment owned by Mexican companies in California in 2000 was approximately $1.1 billion, concentrated in the food industry and primarily located in the border region. This investment is estimated to support approximately 9,000 jobs.

It is estimated that 68% of Mexican immigrants send on average $243 per month to family in Mexico. In total, $4.5 billion was sent to Mexico in 2004 by the Mexican-origin population in California, generating an estimated $338 million in transaction fees for California businesses.

It is estimated that in 2002, tourism in Mexico by Californian visitors totaled $600 million,while tourism in California by Mexican citizens translated to more than $1.5 billion,supporting approximately 17,500 jobs and approximately $1 billion in state and local tax revenues. In 2002, cross-border expenditures totaled more than $1.9 billion.

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For more information at http://www.trpi.org