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MotherF
Joined: 07 Jun 2010
Posts: 1450
Location: 17�48'N 97�46'W
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 Posted: Tue May 08, 2012 3:34 pm Post subject: |
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I studied in Chile and what first drew me to Latin America was the southern cone countries. There is no fair way to compare the economies of Mexico and Chile for one very vital reason--Mexico has a traditional rural population. Chile was more sucessful than even the US at wiping out it's original populations. More than 50% of the population of Chile lives Santiago. The Chilean countryside--which is MUCH much smaller than Mexico, is almost entirely large estates and land that was open to and ripe for mining. Mexico also has a very large mining potential, but those lands were returned to the peasents during and after the revolution. During the past 50 years the PRI allied with the PAN has been trying to undo the Mexican Revolution and get the peasent off their land to open it up to exploitation by multinational firms.
To say Mexico's economy has been stable during the last 12 years is a joke. Yes, the peso has been stable, but the cost of basic food items has not. In the past 12 years the price of tortillas has doubled, while the minimum wage has not gone up that much. Why has the price of tortillas doubled? NAFTA. I don't have time to delve into NAFTA now, but it has not been good for Mexico. |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Tue May 08, 2012 3:57 pm Post subject: |
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| To say Mexico's economy has been stable during the last 12 years is a joke. Yes, the peso has been stable, but the cost of basic food items has not. In the past 12 years the price of tortillas has doubled, while the minimum wage has not gone up that much. |
Hyperinflation, currency devaluations, interest rates in double digits...that is what Mexico was during the 80's and 90's...that can hardly be called stable. When all your savings are wiped out because the central bank played loose with the nation's finances, when you couldn't get a mortgage or borrow for a business start up because interest rates were at biblical levels. Stable?
Go ask a Mexican what Fobaproa means to them...
In 12 years, yeah prices have doubled. Even low inflation means prices still go up and 12 years is a long time...same thing has happened in Canada and I would guess in the US too. The price of tortilla is controlled so it's not subject exactly to the full force of the market/NAFTA. As it stands now, many poorer families gain by having the staple subsidized (and that's good) but how long can you drain the public purse in this direction? |
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Prof.Gringo
Joined: 07 Nov 2006
Posts: 2236
Location: Dang Cong San Viet Nam Quang Vinh Muon Nam!
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| Posted: Tue May 08, 2012 4:04 pm Post subject: |
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| Guy Courchesne wrote: |
| Quote: |
| To say Mexico's economy has been stable during the last 12 years is a joke. Yes, the peso has been stable, but the cost of basic food items has not. In the past 12 years the price of tortillas has doubled, while the minimum wage has not gone up that much. |
Hyperinflation, currency devaluations, interest rates in double digits...that is what Mexico was during the 80's and 90's...that can hardly be called stable. When all your savings are wiped out because the central bank played loose with the nation's finances, when you couldn't get a mortgage or borrow for a business start up because interest rates were at biblical levels. Stable?
Go ask a Mexican what Fobaproa means to them...
In 12 years, yeah prices have doubled. Even low inflation means prices still go up and 12 years is a long time...same thing has happened in Canada and I would guess in the US too. The price of tortilla is controlled so it's not subject exactly to the full force of the market/NAFTA. As it stands now, many poorer families gain by having the staple subsidized (and that's good) but how long can you drain the public purse in this direction? |
Minimum wage increased from $5.15 an hour to $7.25 an hour with several states having set wages even higher.
Mexican minimum wage has barely moved.
The price of tortillas is controlled??? Not it isn't!
http://en.wikipedia.org/wiki/Tortilleria
Corn was subsidized in Mexico from 1974 to 1999, and the price of tortillas was capped by law. When subsidies and price controls ended, tortillerias had to adapt. The end of the subsidy was met with mixed reception. Some tortilleria owners saw the move as an opportunity to retain jobs and increase profits, while others expressed concern that higher tortilla prices would hurt low-income families who relied on tortillas as a staple food |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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Phil_K
Joined: 25 Jan 2007
Posts: 2041
Location: A World of my Own
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| Posted: Tue May 08, 2012 4:17 pm Post subject: |
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| ...or borrow for a business start up... |
I think that's still the case. For financing an established business, I think it's easier. |
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Prof.Gringo
Joined: 07 Nov 2006
Posts: 2236
Location: Dang Cong San Viet Nam Quang Vinh Muon Nam!
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| Posted: Tue May 08, 2012 4:20 pm Post subject: |
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Sure thing, guy:
The Pact has been heavily criticized by both the right and the left. Critics argue that the Pact was both non-binding and a de facto acceptance of a 30% increase in the price of that product (from MXN $5.95 to $8.50 per kilogram). Many tortiller�as ignored the agreement, leading to price increases in well in excess of the $8.50.
From the same site you just listed above:
http://en.wikipedia.org/wiki/Tortilla_Price_Stabilization_Pact |
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Phil_K
Joined: 25 Jan 2007
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Location: A World of my Own
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Tue May 08, 2012 4:26 pm Post subject: |
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Exactly...price controls being criticized...tortillerias can't absorb the increase in bulk prices when the final product's price is controlled yet the government hands out money to the farmer to produce it.
You either go full bore and control the price from source to seller or you let it go completely. This hybrid form of price control should have been a temporary bandaid but it has been left to linger. No one wins. |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Tue May 08, 2012 4:29 pm Post subject: |
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Not sure...the tortilla issue is one I've followed for years, along with the tax battles over sugar and HFCS. It wouldn't surprise me if there were some form of control over those as well, at the very least through local boards. We see this in Canada a lot. |
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Prof.Gringo
Joined: 07 Nov 2006
Posts: 2236
Location: Dang Cong San Viet Nam Quang Vinh Muon Nam!
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| Posted: Tue May 08, 2012 4:45 pm Post subject: |
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Pretty sure the price of milk is still controlled. |
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Phil_K
Joined: 25 Jan 2007
Posts: 2041
Location: A World of my Own
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| Posted: Tue May 08, 2012 4:51 pm Post subject: |
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| Prof.Gringo wrote: |
Pretty sure the price of milk is still controlled. |
The Liconsa, for sure. Although this supposedly "affluent" family uses it as well, in its supermarket form, as it's $2 cheaper than the other brands and tastes exactly the same. |
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MotherF
Joined: 07 Jun 2010
Posts: 1450
Location: 17�48'N 97�46'W
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| Posted: Tue May 08, 2012 4:55 pm Post subject: |
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Umm, tortillas are now 12 pesos a kilo!
Guy I didn't say it was stable before, but in the 80s and 90s you could eat on the minimum wage. You can't now. The minimum wage is a joke--practically slave labour in terms of what you can get.
I have to say I agree with Phil--most people are no more able to get large loans than before. There is a lot more credit now, but most of them are small, unethical and screwing the working class and lower middle class. |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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| Posted: Tue May 08, 2012 5:04 pm Post subject: |
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10.50 for tortillas in my area, but I've seen them at 11 and 12.
Minimum wage is certainly a joke, and that's why you have a large informal economy across the country. It was no different 12 years ago when it was also a joke.
Credit needs to open up more or rather, competition in credit. And not US style of credit of the last decade leading to the housing crash and people owing more than their homes are worth...that's the pendulum going to far. Just enough credit and a stronger civil court system to keep the system honest. |
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Guy Courchesne
Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City
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geaaronson
Joined: 19 Apr 2005
Posts: 948
Location: Mexico City
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| Posted: Fri May 11, 2012 9:46 pm Post subject: |
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| It`s 11-13 pesos here in the Yucatan. Tortas used to be under 8, 8 years ago, but now are 13. I could go to the mercado in Merida and get eggs for 9 pesos a docena during and tomatoes during the scarce season for about the same for a kilo. rotisseried chicken is now 60 pesos per bird, 100 for two on Saturdays. |
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