Impact of automation on low-skilled and migrant workers in South Texas


McALLEN, Texas (Border Report) — Although the overall Texas economy added 45,000 jobs in June and set another all-time employment record, unemployment rates on the South Texas border actually increased substantially since May.

This has economic analysts worried about how the border region can sustain its workforce, especially with so many low-skilled and/or no-skilled migrants flooding in.

The McAllen-Edinburg Mission Metropolitan Statistical Area (MSA) reported unemployment rates increased from 5 percent in May, to 6.2 percent in June. The Brownsville-Harlingen MSA reported a jump in unemployment from 4.6 percent in May, to 5.6 percent in June.

This is a stark contrast to the statewide jobless rate of 3.4 percent in June, which was the lowest recorded unemployment rate in Texas since records were first tracked in 1976. The Austin-Round Rock MSA, for example, reported one of the lowest unemployment rates at 2.7 percent.

“It’s a great day to be a member of the Texas workforce,” Texas Workforce Commissioner Julian Alvarez III declared in a July 19 press release touting the new jobless rates. But not necessarily for workers in the Rio Grande Valley. Because where the rest of the state is seeing mostly a decrease in unemployment, the Rio Grande Valley saw joblessness jump by a point in some of its major cities.

And although analysts point out that the jobless rate in June still remained lower than a year ago — when unemployment was 7.2 percent for the McAllen-Edinburg-Mission MSA, and 7 percent for the Brownsville-Harlingen MSA — they are concerned by this uptick.

Automation at maquiladoras affecting joblessness

One possibility that could be at play is the increase in automation, which nationwide is slowly replacing low-skilled jobs. This includes computer technology that allows customers to scan their own groceries. And diners to order their meals from computers hooked up to tables in restaurants, never needing to interact with a human.

In South Texas, the spread of automation is amplified by a large number of maquiladoras. These are large, duty-free factories located on both sides of the U.S./Mexico border, which take raw materials and assemble manufacture, or process and export goods. As advances in automation increase and more automation tools are integrated into these maquiladoras, then more of these low-skilled factory positions are eliminated, or at risk.

“One of the things with immigration that we really need to be looking at is what do we do with the low-skilled or no-skilled migrants who are coming in and what’s the impact of technology on them?” Keith Patridge, president and CEO of the McAllen Economic Development Corporation, told Border Report.

“What do we do with 11 million or 15 million migrants that are here with no support base, no background, no family to support them and no skills or education and their jobs are replaced by automation? What do we do as a society in that case?” Patridge asked.

Keith Patridge, president and CEO of the McAllen Economic Development Corporation, spoke to Border Report on July 24, 2019. (Sandra Sanchez/Border Report)

‘We have to be part of the solution’

Many who push to change U.S. immigration policies and laws say it all comes down to economics. The vast majority of Central Americans from El Salvador, Honduras and Guatemala who are fleeing those countries and flooding the Southwest border of the United States, are trying to get away from corrupt governments, joblessness and rampant crime.

Investing in those economies, and helping to train local residents, could go a long way in solving today’s immigration problems, Texas Sen. Juan “Chuy” Hinojosa, D-McAllen/Corpus Christi told Border Report. It also could help to stem the flow of low-skilled and no-skilled workers to the United States.

“Our country, we face a greater security danger and risk south of the border than we do in Afghanistan. Yet we invest billions in Syria, billions in Iraq, billons in Afghanistan but we don’t pay attention to Central America or South America. If we invested in Central America to build up their economies to minimize their corruption and government, to try and train their police forces and to help educate their citizens, that would be a much smarter long-term investment for us,” said Hinojosa, who is vice chairman of the Texas Senate Finance Committee.

“Look at what’s happening in Venezuela. We’ve got to pay attention to what’s going on and we have to be part of the solution, not the problem, and we have to be smart in the way we approach and get this issue resolved,” Hinojosa said. “We need to do something now before it really gets out of control.”

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