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May 20, 2005
Mexico
Our relations with Mexico are currently centered on illegal immigration, the ways to stop it, and what to do with the illegal immigrants who are already here.
But behind this is the more fundamental problem: low Mexican wages and the difficulties ordinary Mexicans can have finding good, well-paying jobs at home. After all, that’s why they’re crossing the border.
So, we can debate fences and walls and Minutemen, and we can debate what to do with the people who already made it here. But none of these things will stop people from wanting to cross the border. And as long as they want to, they will try. And often.
NAFTA was supposed to fix this problem. It was supposed to give Mexican industry inside access to the American market, which was supposed to give a boost to Mexican wages. But as worldwide trade barriers fell, and the Mexican government failed to liberalize the rest of the Mexican economy (viz. their moribund oil industry) the value of NAFTA for Mexican workers fell too.
The key for Mexico is its domestic consumption. Well-paid Mexicans with good jobs in Mexico , spending their money in Mexico are good for the Mexican economy and the U.S. Border Patrol. Win-win. Heck, they may even start buying some of our goods someday.
So how do we get there? How does the Mexican economy become more like the American one?
Focus on the worst Mexican businesses, the businesses with the worst labor record, the lowest wages and the most employees. It’s businesses like these that which, when bettered by unionization, will have the greatest positive effect on Mexican per capita income.
And—funny story, this—hundreds of thousands of workers in Mexico toil away for one behemoth employer, one that’s trounced upon the right to organize, one that treats its workers like dirt, and one so large that, in Mexico like in the U.S., its sales are taken by government as a leading economic indicator.
¡Bienvenidos, Wal-Mart!
Wal-Mart de Mexico SA, a.k.a. Walmex, is every bit the company the Yankee parent is. And though junior gives Mexican consumers nice cheap things, it pays its Mexican workers, like its American ones, rock-bottom wages. When a company's low-wage profile is accredited by the Mexican government for keeping down inflation, you know it's got economic clout.
But a big, economic-indicator-size company like Wal-Mart, employing millions internationally, should pay better wages. That puts upward pressure on wages across the economy, meaning the then-better-paid employees of businesses all around the economy (blue collar, white collar and professional employees) could afford to buy more Wal-Mart products.
It’s called Fordism, and it's how America became a first world consumer economy in the first place.
Instead, despite a 27% surge in Q1 profits, Walmex keeps its wages down. At 4.5% of the Mexican economy, this makes it hard for any Mexican business to raise its pay. And the downward pressure on
Mexican wages encourages immigration (by whatever form) to America.
Wal-Mart is Fordism backwards. It keeps employee wages low to pay for its low prices. In as much as Fordism acts as an informal minimum-wage increase, WalMart-ism acts as a minimum wage decrease.
That's the last thing the Mexican economy—or the American economy—needs.
And the Mexico-America link here is key. Unionizing Wal-Mart America should be a sine qua non of the Democratic Party, but it's not enough. We need to unionize Wal-Mart Mexico, too. If you unionize in just the United States, you’d be inflating wages here while leaving them deflated in Mexico. That would only worsen the situation at the border, bringing more hardship to more Mexican families and draining Homeland Security resources from the war on terror.
Unionize Wal-Mart Mexico, and the increase in wages will enrich the Mexican economy and begin the long process of reducing our Mexican trade deficit. Unionize Wal-Mart America, too. The modest increase in taxable income that will generate will help pay down that nasty federal deficit of ours--not all the way, but it'll make a start.
Unionize Walmart. It's the structural, Democratic answer, to the twin deficit problem.
Posted by James Fichter at May 20, 2005 12:22 PM
