"So, I wonder what is different about the Mexico case. It seems to me that under a totalization agreement, LEGAL Mexicans working in the US for Mexican companies would contribute to the Mexican system, whatever that is, and NOT the US Social Security system. Of course, if they are working for AMERICAN companies, then obviously they would be covered just as an American would be, and under all the same rules."
If that was the only way totalization worked there would be no harm done. The problem is, there is another part to the totalization process that would suck the trust funds dry.
http://www.socialsecurity.gov/pubs/10180.html
Payment Of Benefits
U.S. Social Security agreements also help people who have worked in both the United States and an agreement country, but who have not worked long enough in one country or the other to qualify for Social Security retirement, disability or survivor benefits. Under an agreement, each country can count your work credits in the other country if this will help you qualify for benefits.
For example, if you have earned some Social Security credits in the United States, but not enough to qualify for a benefit, we can count your credits in an agreement country to make up the difference. If you meet the minimum eligibility requirements based on combined credits from both countries, you will receive a partial U.S. benefit that is proportional to the number of credits you earned in the United States. The other country also can use your U.S. credits to help you meet the eligibility requirements for foreign Social Security benefits.
Although each country may count your work credits in the other country, your credits are not actually transferred from one country to the other. They remain on your record in the country where they were earned. It is therefore possible for a person to qualify for a separate benefit payment from each country.
Yes, I see.
In fact, because I had put in five years working in Korea(the Korean minimum) before the US-Korea Social Security agreement went into effect, and I had reached age 60, I qualified for a Korean pension, which I have been collecting ever since, and which will never reduce or influence my eventual Social Security payments.
I suppose this is an instance of this phenomenon working the other way.
I agree that because of the huge disparity between the minimal value of the contributions and the huge number and value of potential claims, treating Mexico in this way would be fiscally irresponsible.
there would be nothing keeping an illegal from doctoring his work history in Mexico to qualify for a partial benefit in the US, even if he was unemployed for long stretches of time in Mexico. That partial benefit might be greater than what the full benefit would be in Mexico, given the paltry wages down there.