Wednesday, May 17, 2006

Economics, wages and osmotic pressure

Glenn Reynolds links to a good article that describes the
mexican economic reason for the flood of immigration and
why south america is moving leftward politically.

Apart from the macro-economics, croneyism and lack
of education, another big driver for the northern migration
is low pay and the way that people in mexico are paid.
People are paid flat salaries (salario fijo) with a per month wage,
and are expected to work the hours necessary to get the job

During the 10 days I just spent in mexico, we had two company
drivers who were on duty for the same number of hours as me.
Working from 6 in the morning until 10 at night is pretty normal
in the oilfield during drilling operations, and we get paid well for
that. The drivers picked us up, drove us around all day then
brought us back to the hotel, then drove back to the cheap hotel
they stayed at. (not my idea)

They make a flat wage for that, and the minimum wage in mexico
is 50 pesos per day. One driver said his cousin is working in the US
and working two jobs and in 4 months has saved enough to buy a house
in Villahermosa.

Just do the math and it's easy to see the osmotic pressure-like force
driving people northward. Even if you get paid $3/hour here, but you
work 16 hours per day you can make $48 dollars per day, which comes
out to 500 pesos per day or 10 times what they make in Mexico, and
they aren't working that much more in the US than in Mexico.
You'd have to be a fool not to come up to the US, and if I were in
their shoes I'd do it too.

The best fence in the universe won't keep people out with that kind of
force behind it, witness the transport of drugs. Anytime there is a huge
profit margin like this wage differential, the drugs or the people will get

One possible answer is to not just 'give' mexico a guest worker program,
we should ask that low wage workers in mexico be given the opportunity
to select a per hour wage, as well as demanding economic reforms to make
mexico's economy more like Chile's and less like, Mexico's.


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Anonymous Anonymous said...

Very interesting. I wasn't aware of just exactly how much the wages differenciated between Mexico and the US.

It's no small wonder why they don't stay on their side of the border given the money that's at stake.

It's really too bad the rich folk down there are so greedy and short sighted.

7:53 PM  
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