Mexico...

[Boerseun]

Now, I'm from a totally different part of the planet. I'm a white person living in Africa, and with Apartheid having favoured my people for many years, I understand Western values and First World standards perfectly. Now, with us actually being exposed to the "Real Africa" after pretending to be blind to it for our 350-year-odd tenure in this continent, I'm also beginning to develop an understanding of the Third World mindset.

 

What I don't get, however, is Mexico.

 

How, in short, did Mexico end up being a poverty-stricken, for all practical reasons "Third World" country? How did history bypass Mexico? In my mind, if ever there was a country to prosper, it'd be Mexico. The biggest consumer on the face of the planet lives just north of the border, and Mexico has lots and lots of cheap labour. Mexico should be a manufacturer's paradise. Obviously, it's not. The East is booming on trade with the US that could have been based out of Mexico. Lower transport cost (compared with the East), similarly low-waged labour should clinch the deal to set up your factory in Mexico.

 

Why didn't it happen?

 

Is it because of some other, more subtle reason? Does catholiscism have anything to do with it? Is it bad governance? What are the reasons that the development bus has mostly passed Mexico by?

 

I'll be the first to admit that I don't have the foggiest notion of what's happening over there - that is, after all, why I started this thread! - but from a distance, with the perspective you get from it, Mexico looks like a corrupt and poor nation missing out on lots of opportunities that got shipped off to the East, instead.

 

Why?

 

Can somebody explain this to me?

[C1ay]

Is it bad governance?

 

That's it in a nutshell. They seem infected with a perpetually corrupt government.

[Mercedes Benzene]

If I can remember correctly, in the book "Who Will Tell the People?" by William Greider, there is at least one chapter that discusses just the questions that you have about Mexico (and the relation to the American economy). I'll see if I can find it tonight when I get home from work, and maybe I'll scan a couple pages if it seems helpful.

[freeztar]

Mexico should be a manufacturer's paradise. Obviously, it's not. The East is booming on trade with the US that could have been based out of Mexico. Lower transport cost (compared with the East), similarly low-waged labour should clinch the deal to set up your factory in Mexico.

 

Why didn't it happen?

 

Actually, it's been happening for a while.

 

Here's a recent example:

BBC NEWS | Americas | Ford to open new plant in Mexico

[Turtle]

How, in short, did Mexico end up being a poverty-stricken, for all practical reasons "Third World" country?

Weed maybe? :hihi: Not sure to what extent the US continued to bash them economically after we took texas (back?) from them.

 

How did history bypass Mexico? In my mind, if ever there was a country to prosper, it'd be Mexico. The biggest consumer on the face of the planet lives just north of the border, and Mexico has lots and lots of cheap labour. Mexico should be a manufacturer's paradise. Obviously, it's not. The East is booming on trade with the US that could have been based out of Mexico. Lower transport cost (compared with the East), similarly low-waged labour should clinch the deal to set up your factory in Mexico.

 

Why didn't it happen?

It is happening, but also the US has historically employed large numbers of migrant Mexicans to work in-country. Here's an interesting new development: >>

Chances are much of your car was built in Mexico. Increasingly, the planes you fly on are, too.

Aerospace companies are streaming to Mexico, drawn by lower wages, enthusiastic government promotion, a new safety agreement with the United States and an increasingly sophisticated workforce. ...

Aircraft makers flock to Mexico - USATODAY.com

 

Is it because of some other, more subtle reason? Does catholiscism have anything to do with it? Is it bad governance? What are the reasons that the development bus has mostly passed Mexico by?

 

Greed & weed. :( :(

[Buffy]

You picked Mexico, but quite frankly, its all of Latin America that has aspects of this malaise.

 

Ping Racoon and get him to come expound about this: I'm quite sure he has some fascinating insights! :)

 

In terms of Boerseun's angle, its especially fascinating: in Latin America, the race that "won" is "oppressed": this is the source of hatred towards "Gringos"--which to me has always been amazing since the majority both north and south of the border is European.

 

Although Latin America has a lot of "mixed blood," the "pure" Native American population is treated as non-persons, making Latin America one of the most segregated and racist places on earth. Pick a country, and you will find that the Native Americans are exclusively on the bottom of the heap.

 

But nonetheless, its the Gringos who have evilly oppressed all of the Latinos.

 

Shame, shame.

 

While there are many caricatures of Latinos, I personally find most of them false. Sure, while they love their Siesta, they work harder than most Gringos I know, and I hire them at the drop of a hat. They're supposed to be slow, but in fact they are among the best business people I've ever met.

 

So that begs the question posed above: why are they so poor? The vast majority of Latin America has indeed been politically leftist throughout most of its history, which has indeed stifled investment. But so much of the investment has been "colonial" in nature, meaning that the profits were shipped offshore and not reinvested, meaning that yes, the Gringos took it all.

 

No wonder they're pissed at us.

 

Latin America has always been colonial, and the most prosperous and successful countries unfortunately have been the ones that have been siezed by strongmen who looted the country.

 

So, B, not too different from Africa!

 

The mariachis would serenade, and they would not shut up till they were paid, :)

Buffy

[Mercedes Benzene]

Mexico's economic condition is largely the responsibility of the government. In many places in Mexico, vast communities have been set up a la hooverville. I agree, it's strange how a *formerly* prosperous region such as Mexico took a turn for the worst after the arrival and subsequent scavenging of European settlers, but I would say that the government has not done anything to enact laws that make Mexico more economically stable.

 

The thing is, the US does invest in Mexican outsourcing, but laws are such that work conditions and minimum wages do not favor a stable economy in some areas. Here's an excerpt that begins to explain the problem facing communities just over the border:

The colonias of Ciudad Juarez are like a demented caricature of suburban life in America, because the people who live in Lucio Blanco or Zaragoza or the other squatter villages actually work for some of America's permier companies -- General Electric, Ford, GM, GTE Sylvania, RCA, Westinghouse, Honeywell and many others. They are paid as little as fifty-five cents an hour. No one can live on such wages, not even in Mexico. With the noblesse oblige of the feudal padrone, some U.S. companies dole out occasional despensa for their struggling employees -- rations of flour, beans, rice, oil, sugar, salt-- in lieu of a living wage.

In addition to the cheap labor, the U.S. companies who have moved production facilities to the Mexican border's maquiladora zone enjoy the privilege of paying no property taxes on their factories. As a result, Ciudad Juarez has been overwhelmed by a burgeoning population and is unable to keep up with the need for new roads, water and sewer lines and housing. The migrans who came from the Mexican interior in search of "American" jobs become resourceful squatters, scaveniging materials to build shelters on the fast-developing hillsides. In time, some of these disappointed workers decide to slip across the border in the hop of becoming real Americans.

Source:Greider, William. Who Will Tell the People: The Betrayal of American Democracy. New York: Touchstone, 1992.

 

So, it's not ALL Mexico's falt in this sense. The laws were made such that Mexicans would not loose work from competition in the East. It then also falls to the responsibility of the United States.

I think that better agreements such as NAFTA could help promote a stronger economy in Mexico.

It's also important to say that Mexico's economy has improved GREATLY in the past decade+. According to wikipedia, they have the 14th largest economy in the world, but just as in any country, there are disparities.

 

For some more information, see:

Maquiladora - Wikipedia, the free encyclopedia

North American Free Trade Agreement - Wikipedia, the free encyclopedia

Economy of Mexico - Wikipedia, the free encyclopedia

[Buffy]

Mexico's economic condition is largely the responsibility of the government.

Yah, and Mexico is a democracy, so who does *that* refer to? :phones:

 

And the ruling party through most of Mexico's history is the....

 

Institutional Revolutionary Party

...one of the best examples of Newspeak I think I've ever seen!

 

The great contradiction of Mexico's government is that it is run by an oligarchy of the rich in the country, that maintains its cover by at least in name portraying itself as a Socialist government emphasizing the support of poor Obreros y Campesinos.

 

So yah, its the "government" but you really need to point it back to the rich folk who--like in most poor countries--really run everything for their own benefit....

So, it's not ALL Mexico's falt in this sense. The laws were made such that Mexicans would not loose work from competition in the East. It then also falls to the responsibility of the United States.

Well, yah, but on the other hand, its *extremely* lucrative to those folks who actually *own* the maquilladoras...and guess who they are? :cheer:

 

I think that better agreements such as NAFTA could help promote a stronger economy in Mexico.

I agree. It does ship jobs across the border in the short run of course, but its probably better to send them to Juarez than Guangzhou, since--as those who believe the "Amero" is imminent--it'll all be "us" in the end... :cheer:

 

And after all, even in Egypt, the Pharaohs had to import Hebrew braceros, :cheer:

Buffy

[Boerseun]

Interesting!

 

We have kinda the same problem here, where our poverty-struck neighbours (Zimbabwe et al) stream over our borders in search of "real" jobs, paying something worthwhile.

 

This, of course, result in unplanned and uncontrolled squatting in all our major cities and towns of illegal immigrants in search of a better life. This, in turn, significantly affects the crime rate when those same individuals find out that the stories they've heard about everybody having jobs in South Africa turns out to be false - and they must somehow get hold of a loaf of bread.

 

I have a suspicion that that is appliccable to the US with illegals from South of the border, too.

 

And the solution is pretty clear, in both cases.

 

If, *somehow*, conditions can be made better for the foreigners in their own countries, then there would be no incentive for them to cross the border - they'd stay at home and enjoy the opportunities created there.

 

This, of course, demands stable and progressive governance in the first place. Getting politicians to see the light in third world countries are notoriously hard, because they have their grimy fingers on the levers of power, and have a vested interest in maintaining the status quo. Just look at Mugabe, as a case in point.

 

So, how to do it?

 

I think (and this might sound a bit off, but bear me out) that a good place to start will be to scrap minimum wages in the rich country. The locals, in your case the US residents, South African in my case, are registered with the appliccable government institutions that monitor their incomes for tax purposes. They can't work for less than minimum wage, because then the government will come down like a ton of bricks on the employer. This, of course, creates the perfect window of opportunity for illegals from the poor neighbour (Mexico in your case, Zim and Mozambique over here) to cross the border illegally, and present themselves as unregistered labour with no minimum wage requirements to unscrupulous employers.

 

This might sound a bit callous, but there will always be employers exploiting people. No law will ever stop it. So, if that is the case, you might as well enable them to *exploit* the locals, closing that window to foreigners. If a person works below minimum wage, earning so little should, in some cases at least, inspire them to do better - either through studying and advancing their position, or through somehow starting up their own little business. Earning less than minimum wage certainly doesn't limit upward movement in motivated individuals. But placing rigid minimum wage restrictions on companies certainly motivates some of them, at least, to explore the illegal, more profitable route of employing illegals who aren't registered with the IRS.

 

That's a start, at least. Counter-intuitive, to be sure, but I'm sure there's something to scrapping minimum wages.

 

Any thoughts as to how this might affect the US/Mexico immigration issue?

[Buffy]

I just love the Law of Unintended Consequences and Santayana's quote about learning from history....to wit...

 

Eliminating the minimum wage is a favorite crusade among Conservatives here, although its usually simply based on free market principles, government not being allowed to limit businesses "freedom to innovate," etc. Conservatives are pro-business in this country, so the real issue is that they just want to lower their costs, and guess who puts up the most obstruction to proposals to punish employers for hiring illegal aliens--the most obvious and easily implemented mechanism for halting the problem...

 

Well of course one of the arguments about *why* Labor Unions have been in decline in America is that the minimum wage eliminated the motivation for laborers to support them for collective bargaining: wages have stayed high, as jobs have been exported, *mainly* as a mechanism to keep the unions from coming back. No reason to drop the wages, just pay it to fewer people.

 

Of course if you were to the drop minimum wage, unions would be back with a vengeance.

 

So why the heck are Conservatives for it? They already won the battle!

 

Last words are for fools who haven't said enough, :phones:

Buffy

[Boerseun]

Well, that's one way of looking at it.

 

Scrapping minimum wages might look on the surface as if it can only benefit business, but the hoary old chestnut still holds:

 

"If you want to pay peanuts, expect to employ monkeys."

 

The companies willing to pay the best wages will end up with the best employees - an edge over their competitors who are trying to skimp on wages, ending up with the monkeys, ending up with an inferior product.

 

But if a company wants to employ those willing to work for peanuts, and willingly take the risk as far as the quality of their product is concerned, by all means - don't stop them. The market might just take care of that.

 

But it certainly closes the option of luring illegals because the locals can work as cheaply - the motivated individuals caught in that trap does not, in fact, have any ceiling as far as upward mobility is concerned. Access to capital based on sound and solid business plans might be eased, however.

[Buffy]

"If you want to pay peanuts, expect to employ monkeys."

I agree with that. That's why Dell has begun to pull back their phone support for big Corporate clients back from India to the US.... :phones:

But it certainly closes the option of luring illegals because the locals can work as cheaply - the motivated individuals caught in that trap does not, in fact, have any ceiling as far as upward mobility is concerned.

The other interesting proposal is to simply lift restrictions on immigration and *keep* the minimum wages.

 

There's an argument that they actually can't work for less than minimum wage without contributing to factors that are detrimental to society. If you are going to avoid ghettos and shantytowns, you need to pay people enough to afford a home, whether they're foreign born or not.

 

This will of course *promote* *permanent* immigration--which means that wages earned here are not shipped home to the mother country and therefore to the *detriment* of that neighboring country, like Mexico, and *force* them to invest!

 

I don't think there's a right answer, but I do believe in creative destruction and the notion that trying something new is a good idea simply because the market has not already discounted its value and thus may lead us to an even higher local minimum....

 

Tradition weighs like a nightmare on the minds of the living, :cheer:

Buffy

[Boerseun]

I agree with that. That's why Dell has begun to pull back their phone support for big Corporate clients back from India to the US.... :phones:

Certainly a step in the right direction, IMHO. I'm personally of the opinion that the whole hyped-up "Globalisation" issue is simply a ploy to bypass local wage restrictions and employment rules and regulations. That's how a company with a high profile like Nike, for instance, gets to use people like Tiger Woods as their public faces, paying him top dollar (ridiculously so) to promote a product created in sweatshops in the third world, the workers expected to live on pennies a day. The entire wage bill is exported to the manufacturing country - as little as it might be. If employment regulations were more relaxed, Nike sneakers could be made in "sweatshops" in the US, callous as it might sound. If an employee doesn't like the conditions, he/she can make another plan. But the wage bill will stay in the US - to be spent there.

The other interesting proposal is to simply lift restrictions on immigration and *keep* the minimum wages.

Not too sure what you'd achieve with that. Considering the situation I'm most familiar with, most of the wages earnt by illegals in SA, the excess of the amount they need for bare-bones survival, is simply sent off to their family in Zimbabwe. Their entire social infrastructure is still there, and they end up with the proceeds. So we have a situation where foreigners earn below minimum-wage in SA, living under the radar, and the wage bill still gets exported. That money could have been spent on consumer products in SA, stimulating the local economy. I have a suspicion that the same might apply to illegal Mexicans in the US, simply because it's individuals (for the most part) making the journey across the Rio Grande - they also leave the biggest part of their social infrastructure at home.

There's an argument that they actually can't work for less than minimum wage without contributing to factors that are detrimental to society. If you are going to avoid ghettos and shantytowns, you need to pay people enough to afford a home, whether they're foreign born or not.

That's certainly true. But also only if their social infrastructure at home is taken care of. If their family really suffers at home, and little Pedro needs his school money, and uncle Mendez needs that knee operation, then most of the excess above bare-bones survival will probably get exported back to Mexico. Or am I putting too much trust in human nature? It obviously won't be the rule in all cases. Which brings us back to my initial point - stable, progressive governance in the source country! Even if you do sit with massive illegal immigration, you have to make sure the source country can look after their own, otherwise the wage bill earned in the host country will simply evaporate accross the border, not being spent locally, not contributing to the economy! Damned if you do, damned if you don't!

This will of course *promote* *permanent* immigration--which means that wages earned here are not shipped home to the mother country and therefore to the *detriment* of that neighboring country, like Mexico, and *force* them to invest!

I agree, provided that the source country can take care of its own - even in the face of massive illegal emigration. But then again, if they can actually take care of their people regarding jobs, emigration should taper off.

I don't think there's a right answer, but I do believe in creative destruction and the notion that trying something new is a good idea simply because the market has not already discounted its value and thus may lead us to an even higher local minimum....

Interesting thoughts, interesting thread!