The migrant caravan crisis that led to a five-hour closure in both directions of the busy San Ysidro Port of Entry on Sunday highlighted the far-reaching economic impact such disruptions can have on the San Diego region — from potential labor shortages to substantial business losses among border-area merchants.
San Ysidro shop owners alone lost an estimated $5.3 million in sales as a result of the temporary shutdown, with some fearing that any future closures will put them out of business.
While there are multiple ports of entry along the U.S.-Mexico border, San Ysidro is the busiest border crossing in the Western Hemisphere. About 70,000 vehicles and 25,000 pedestrians move between the two countries each day.
The Sunday shutdown occurred after hundreds of migrants made a rush to the U.S. border and were met by federal authorities deploying tear gas in an attempt to disperse the crowd.
President Donald Trump early Monday morning sent out a tweet threatening to close the border. His comments have raised fears of future closings that threaten to disrupt the local cross-border economy.
Here is what we know about how the local economy is affected when there are disruptions and delays at the U.S.-Mexican border in San Diego.
How much business flows across the border?
“Across the entire border, you have more than 1 million crossings a day, $1.6 billion in two-way trade every day,” said Duncan Wood, director of the Mexico Institute at the Washington D.C.-based Wilson Center. “So if you did see, as Trump threatened this morning that he would permanently shut the U.S.- Mexico border, you’d be looking at disastrous, catastrophic losses on both sides of the border.”
On a daily basis, commercial exchange between San Diego and Tijuana in sectors from tourism to manufacturing is estimated at $2.1 million.
Prior to a $741 million expansion last year at the San Ysidro port, the San Diego Association of Governments predicted an 87 percent increase in vehicle traffic by 2030 in the San Ysidro area.
What types of goods and services are coming across the border?
In addition to agricultural goods, the San Diego-Baja California region is a manufacturing juggernaut, with nearly 600 export manufacturing plants and 50 contract manufacturing options within a 15-mile radius south of the San Ysidro Port of Entry. It is estimated that $42 billion worth of goods are imported and exported at Otay Mesa each year, according to the Smart Border Coalition.
Manufacturing components and equipment in such sectors as medical devices, electronics, automotive, plastics, aerospace, ship building and pharmaceuticals are regularly crisscrossing the border.
According to Jock O’Connell, international trade adviser for Beacon Economics, a research and consulting firm based in Los Angeles, most trade between Mexico and the U.S. goes through Texas but the impact statewide is sizable.
“In California, Mexico is our top export market, by far,” O’Connell said, citing that in the first nine months of this year, trade with Mexico accounted for 17.3 percent of all of California’s exports. “So California has a strong need to keep borders functioning efficiently.”
What businesses are most vulnerable?
In San Ysidro alone, the Chamber of Commerce counts 650 businesses in its ZIP code, most of them small.
“A vast majority of the ‘mom and pops’ make the bulk of their profit between Nov. 20 and Jan. 5,” said Jason Wells, the chamber’s executive director.
Wells estimated about 75 percent of San Ysidro’s businesses, including the popular Las Americas Premium Outlets, decided to close Sunday.
“It was a decision they didn’t make lightly,” Wells said. “The perimeter of their parking lot is the border wall, so anything happening at the border can affect customers and employees … I’ve got many businesses who wouldn’t survive two more days of this. It’s that critical.”
Stores re-opened Monday but Wells said foot traffic in the early afternoon was slower than normal. Even before the weekend closure, sales were down 35 percent as many of the lanes at San Ysidro were closed in anticipation of the arrival of Central American immigrants.
“No one wants to cross and (worry) that while I’m there they shut down the border,” Wells said.
Construction trades, landscaping companies, and hospitality businesses, including hotels and restaurants, are affected when there are severe delays at the border because many have employees who live in Tijuana.
How many workers need to cross to get to jobs in San Diego?
It is difficult to quantify how many workers cross the border each day. One estimate is that about a third of those arriving by car and on foot are coming to jobs in San Diego.
Unite Here, the union that represents hotel and hospitality workers, estimates at least 15 percent of its members are crossing the border to work in San Diego. “The tourism economy would be devastated if there was a complete shutdown,” said Unite Here Local 30 president Brigette Browning. “These are the jobs that non-immigrants will not perform, the hardest ones, like housekeeping and the dishwashers.”
How are businesses in San Diego coping?
Like other hotels, the Loews Coronado Bay Resort was affected by the Sunday shutdown when some employees were absent from work.
“We have team members who live in Tijuana and legally work at Loews Coronado Bay Resort,” said hotel Managing Director Sean Clancy. “The border closures have obviously resulted in some delays, and a few work absences. Commute times have been extended, and in the case of yesterday’s border closure, several of our team members were concerned about how they would get home. Some … stayed at the hotel overnight last night to avoid the border entirely.”
Clarke Ramsey, president of LePerv Landscape Inc. in San Diego, also said the border shutdown led to some tardy arrivals and work no-shows. About 20 percent of his 30 employees live in Tijuana, he said.
“It definitely hurts us,” Ramsey said. “The first thing I had to do this morning was send out emails saying we wouldn’t be at their properties. People understand it because they’ve seen this on the news. I’m already trying to come up with solutions, like do we have a place to rent a house for four or five people who need to stay overnight.”
The San Diego Convention Center Corp., which has about 50 full- and part-time employees who cross the border, has a break room with comfy bean bag-like seating for those workers who arrive early and need a place to relax before their shifts start or need to wait before heading back home across the border.
“Many of our staff have also made connections with those who live here in San Diego so that they have accommodations to stay here if they need to,” said corporation spokeswoman Barbara Moreno.
What about trucks? Where will all of that traffic go?
The crossing at Otay Mesa is the single largest gateway for commercial trucks moving across California and Mexico and is the second-largest truck port along the entire U.S. border with Mexico.
In 2017, the Otay Port of Entry recorded 9.27 million northbound vehicles crossings and 17 million crossings that included passengers and pedestrians.
But the Otay Mesa facility is considerably smaller than the port at San Ysidro, which racked up 32.17 million passenger and pedestrians crossings.
That means if San Ysidro is closed for an extended period of time, travelers could not simply drive east to Otay Mesa to cross the border without experiencing significant delays.
“Otay cannot handle San Ysidro’s traffic,” said Paola Avila, vice president of international business affairs at the San Diego Regional Chamber of Commerce. “We know border wait times on their own cost our economy billions of dollars.”
What about tourism from Mexico?
“Visitors from Mexico fuel a tourism economy that benefits all Californians,” said Caroline Beteta, president & CEO of Visit California, the state’s tourist office. “Mexico is by far California’s top international market, responsible for more than 40 percent of California’s international visitor volume and $3.1 billion of visitor spending every year.”
Last year San Diego welcomed more than 4.7 million day and overnight visitors from Mexico. They spent an estimated $360.4 million while here, according to Warren L. “Skip” Hull, vice president of CIC Research.
Representatives of various industries, government agencies, and business groups are already meeting and communicating with one another regularly to be prepared in the event of more border disruptions. Just last week, the San Diego Regional Chamber of Commerce hosted such a meeting to address how to minimize the impact on the workforce and share ideas.
San Diego mayor Kevin Faulconer is in Washington D.C. through Tuesday, meeting with the White House Office of Intergovernmental Affairs, the Environmental Protection Agency and other federal officials on cross-border relations.
In an email to the Union-Tribune, Faulconer said he will urge “our leaders to work more collaboratively with Mexico to help resolve this issue as quickly and humanely as possible by providing increased border staffing and more resources to process those who are truly seeking asylum.
Los Angeles Times reporter Margot Roosevelt contributed to this report.
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