What Would A Living Wage Appear As On The Other Hand In Mexico?

The debate about increasing the minimum wages has gained momentum across the globe in recent years. In emerging economies like Chile and Brazil as an example high levels of inequality and low levels of living prompted wage policies to recover and wage recovery policies, while several states of the rich United States recently raised the minimum wage in certain cases, to $15 an hour.

Did the influence of the best-selling economist Thomas Picketty’s work The Capital of the 21st Century result in this? Perhaps it’s the result of international immigration and the polarisation of politics. In any case, the idea that the workers should receive an “living wage” is now widely accepted.

Mexico is no exception. In 2016, the nation’s minimum wage raised by 4.2 percent and was 73 pesos per day (less than $4). However, it’s not enough to purchase what economists refer to as “the basic basket of goods” for a single person, like tortillas, beans eggs, and a little of meat, much less to provide for even a small family.

The debate on public policy in Mexico is at a high level, with social organizations as well as academics, business leaders as well as political groups advocating that the incredibly low minimum wage binds workers to a life of poverty.

‘Honest Pleasures’

Mexico was among the first nations to implement the concept of a minimum wage in the national level due to the Mexican Revolution and the previous hyperinflation.

Our 1917 Constitution (article 123), dictates:

The minimum wage workers should earn must be enough, taking into consideration the local conditions that will meet the basic requirements of life for a worker along with his education and genuine enjoyments, as the head of the family.

From the time of its introduction until 2000, in which it was the time that the ruling PRI party was unable to regain the presidency Palace for the first time after the past 70 years The minimum wage was employed as a policy tool. In the 1930s and during the 1950s, Mexico established a minimal the minimum wage, which was 24 pesos (US$2 per day in terms of 1969) to keep labor costs low and attract investors. In the period, however, wages grew faster than inflation, and transferring some of the company’s productivity gains to worker wages (as as opposed to only increasing in the form of profits).

In the 1970s and 80s, however the minimum wage was used as a means to limit excessive inflation. This is because by establishing an extremely low minimum wage which had the spin-off result of keeping wages at a low in addition and allowing the government to reduce costs and therefore reduce inflation. But this policy also decreased the purchasing ability of all wages, including those in the lowest brackets, as inflation increased faster than nominal wages.

In the last decade and with an Mexican economy having stabilized and the minimum wage has kept pace with the low inflation. In this way, it has been used to indicate changes in the labour market: an increase of the minimum wage could set the stage for other wages to rise. We have not seen any transfers of productivity gains similar to those in the 1950s and 1960s.

The result is a low minimum wage in the official system that has lost 75 percent in purchasing power over the last 30 years as shown by the graph below.

Minimum Wage For A Market VS Official Wage

In reality, only a small percentage of Mexicans actually make more than minimum wages. The official statistics show that about 8 million Mexicans (more than ten percent of labor workforce) make between one and two times the minimum wage.

This is because there are tax and fiscal incentives to declare that employees make less than they earn. Social security contributions paid by employers are calculated very gradually and companies are prone to under-declare earnings and pay their employees their cash compensation for any difference.

It means that labor marketplace’s daily minimum wage for workers is considerably higher than the government’s minimum wage, despite regional differences, working conditions and other particulars aside.

It’s difficult to determine the actual, though unofficial minimum wage. However, based on the reality that the construction worker makes more than 150 pesos per day (US$8) which is more than twice the minimum wage, we can draw some deductions.

The “Lighthouse Effect”

In light of this, a lot of firms and banks wonder: what is the point of worrying about Mexico’s minimum wage?

The Mexican Central Bank, which wants to keep inflation at a minimum and is not in favor of raising its minimum wages. Additionally, some within the business world believe that, like other countries that a increased minimum wage will increase salaries across the board which could increase inflation. This is referred to as “the lighthouse effect” and no one wants that.

A depressed minimum wage also creates an “reverse lighthouse effect”, which means that companies tend to offer low wages due to their reliance on the official minimum wage. In other words, employers believe that since their wages far above the official standard minimum, that they should be enough for workers’ life. But this isn’t always the case when the comparability points aren’t enough for tortillas.

Furthermore, Mexican economy is an oligopolistic economy and doesn’t provide enough competition for us to ensure excessive profits. Also, we have a weak labor market that has large transaction costs and a huge availability of labour. While official unemployment is just 4.9 percent about 65percent of workers are employed in an informal workforce.

With this abundance of labor, there’s plenty of room for employers to pay comparatively low wages, and not be faced with labor shortages. Therefore, a low minimum wage in the official system can push other wages down.

“No Money For Vacations Or An Automobile”

It is the Consejo Nacional de Evaluacion de la Politica Social that measures poverty using an approach that is multidimensional, calculates that in order to have a daily basket to allow two people to survive the minimum wage needs to increase by 145% to the equivalent of 178 pesos (US$8.75).

If a family has one person who earns a living and a dependent, this sum would be enough to pay for the cost of renting a small apartment; three meals per day, commuting costs, and a few medical services. Naturally, there is no funds for holidays or purchasing and maintaining a vehicle.

Evidently, the magnitude of an increase in a single shot is not possible in a nation where the currency has just dropped by 20 percent. The employers would surely resist in the event of a drop like that.

However, a massive and fast increase could also affect the other income brackets and companies in a general way and, consequently, putting jobs at risk. From a business standpoint it is clear that a new minimum wage that is suddenly raised above market rates is unfavorable.

In the meantime, Mexico should establish a policy of raising the minimum wage slowly over time. This could help reduce inflationary pressures, and also allow companies to modify and control their wage structure.

Chile, Brazil and the US have already implemented this, but with no major effects on employment or inflation. Also, in Mexico when the Mexican government increased the minimum wage across the two areas, the effect was not significant. seen.

The effect of an increase in the minimum wage on inequality are difficult to determine. Countries like Brazil, Mexico and Argentina have seen improvements in equality in recent years However, not all of them have increased the minimum wages they pay. The majority of them have utilized cash transfers with conditions to lift people from the poverty. Therefore, even in the event that Mexico could raise its minimum wage in a reasonable manner over time and time, it is possible that the Gini coefficient that is a measure of inequality, could be unchanged.

However, the lives of Mexico’s poorest earners will certainly improve. It’s not just a matter of basic justice, it could also have the potential to boost Mexico’s economy, boost social cohesion, and possibly reduce unwelcome immigration to United States. In light of the rapid shift in Mexico’s regional setting this is, at the very least, should be a priority in the policy process at this point.


Foreign Aid Can Boost The Economies of The Countries That Provide Aid By Encouraging The Business Environment

Foreign aid support is waning in many of the developed nations which includes Canada. This is evident in an recent poll revealed that 59 percent of Canadians are in favor of reducing foreign aid for developing countries.

It is striking considering the fact that Canada’s foreign assistance, in the amount of 0.38 percent of its GDP and is currently lower than the goal set by the OECD of 0.7 percent which puts Canada at middle of the in the middle range of donors.

The reduction of foreign aid from developed countries does not just hamper international development, it could also impact the international performance of a country’s domestic companies.

While aid to foreign countries must always be focused on reducing global inequality in order to reduce poverty and improve the health of those living in countries where it is received but it’s equally important to recognize the positive of aid for the countries that provide it.

This will help to keep international aid at the time that nations and their people are increasingly looking inward.

Not only an act of kindness

Despite the evident lack of foreign aid among the population at large, the Canadian government promised to increase the amount in the budget for 2024 after the cut of 15% in the previous year, which drew massive critique from the assistance industry.

It’s important to be aware that aid from abroad isn’t just an act of charity but also a benefit to the countries that offer aid.

A number of governments are now communicating the importance of international assistance to the citizens of their countries. For example Australian government Australian Government has introduced the new development strategy in 2023 insisting on the necessity of lifting the poor in the developing countries, bringing peace and prosperity to Australia.

In the same way the Canadian government highlighted that it was crucial for Canada playing a more active position on the global scene with the Budget announcement for 2024. Promoting national interests and protecting Canadian values requires active involvement and participation in international issues.

Foreign direct investment decisions

As experts and researchers in the field of strategy We were particularly interested in the possibility of foreign aid creating positive spillover effects for companies of the donor countries.

If positive results are present and the reduction of foreign aid will not only affect countries that receive aid as well as harm the economic wellbeing of the countries that provide aid. The reduction in foreign aid, for instance, could lead to Canadian companies losing their competitiveness abroad and this could result in decreased job opportunities and a decrease in economic growth in Canada.

Our study examined the role played by Japanese foreign assistance in decision-making of foreign direct investments by 1,451 Japanese companies operating in 76 of the developing countries from 1991 until 2002. Foreign direct investment is the investment made by a business or other entity that is based in one country to another.

We excluded construction and infrastructure firms because their investment decisions might be influenced by execution of aid-related projects and not tied to spillovers of aid.

Aid to development was a key foreign policy instrument for Japan especially in those years. As of 1991, Japan had become the world’s largest aid recipient, but its aid budget was drastically cut in 2003.

The initial Official Development Assistance Charter, promulgated in 1992, was a favor of aid with a low tie -and Japan mostly stopped the practice of tying aid to Japanese businesses or products. After the charter was rewritten to reflect the needs of Japanese companies in 2003 permitted the easier access to aid-related contracts for Japanese companies.

New insights gleaned from research

Our research showed that all types of foreign aid could positively impact the direct foreign investment by donor countries in the countries of recipients. This includes social and economic assistance to infrastructure (for roads as well as telecommunications and education health) as well as non-infrastructure assistance (such such as emergency aid).

Both kinds of aid could lower the risks and costs of foreign direct investment that creates new opportunities for donor countries’ firms in countries that are recipients of aid.

Infrastructure aid helps improve access to networks and information in the countries of recipients, improving the overall market conditions. In addition, aid that is not infrastructure-related can help reduce political and market risks, making it more convenient for businesses to work.

In Northern Vietnam, Japan supported the development of roads as well as port facilities in the 1990s. Interviews conducted by The Japan Bank for International Cooperation reveal that, without the modernized infrastructure for transportation, the majority of the investment made by Japanese firms would never be made throughout the country. Utilizing these facilities was crucial for these firms since they depended on imported components and raw materials, making fast cost-effective transportation between ports and port handling essential.

Our study also revealed that not all businesses benefit in the same way from aid from abroad. Certain companies, such as those that had less experience in the aid-recipient country were more dependent on foreign aid to tackle local issues they were unable to overcome on their own.

The national interest is at risk

Our findings from research show the fact that cutting aid to foreign countries from developed nations doesn’t just slow international development but could also affect the interests of the nation.

Although the main goal of aid from abroad is to boost the wealth of people who live in countries that are developing It is important to consider the positive benefits aid may be able to have on countries that receive aid too.

A deeper understanding of aid from abroad is crucial for Canadians when they consider the impact of aid policies on the economic wellbeing of Canada as well as its global impact.

A robust international aid program isn’t just a moral obligation and an essential strategic requirement for countries such as Canada. In continuing to aid efforts to develop international relations, Canada can safeguard its economic interests while demonstrating its commitment to equity in the world and stability.


Are Drones Delivery A Latest Technology Or Just A Band-Aid For Urban Planning Problems? I Visited Australia’s “Drone Zones” To Discover

The CEO of drone delivery firm Wing declares that 2024 is “the year of drone delivery”. The company was first publicly traded at the end of 2014 as the result of a Google “moonshot” project (https://georgetowinternationalacademy.org/). It is now operating in a number of cities including Australia as well as in the United States and Finland, with plans to grow further.

Wing promises quick, inexpensive delivery of groceries and food at the push of a button. However, there are some critics raising concerns regarding personal privacy issues like the noise level and privateness. But what are the main difficulties of having delivery drones in your area?

To learn more, I’ve spent time within australia’s “drone zones”, interviewing local business owners and residents in test suburbs throughout Canberra in NSW and Logan within Queensland. As it turns out, privacy and noise aren’t the principal concerns.

Instead, the discussion was about the larger issues of infrastructure like poor traffic, bad public transportation, and other shortcomings of urban planning. They also discussed drone delivery was suggested as a temporary solution.

What Exactly Is Wing Function?

Customers can use Wing. Wing is similar to UberEats or Menulog customers can place orders and make payments through an app. The items available are light everyday items from many vendors, including sushi rolls, takeaway coffees and even small supermarket items.

What’s distinctive is the way in which it delivers. A small, autonomous drone equipped with the sensors of its own and a navigation system delivers the package via air.

In community trials deliveries have proven astonishingly rapid. The average delivery time is 10 minutes, with the fastest delivery time – from the moment of order placing until delivery to the doorstep in just 2 minutes and 47 seconds.

Wing began its initial trials in the town of Royalla close to the border between New South Wales and the Australian Capital Territory. Australia has served as a test site for its systems since.

As part of my study regarding drone delivery within Australia I’ve spent time with my drones in Canberra and Logan and watching the trials, and talking to people who live there about the challenges of drone delivery actually is like.

There were different opinions regarding issues such as privacy and noise. Some people didn’t mind noise at all, whereas others thought it was an “jumbo whipper snipper” of greater concern was the message Wing suggested regarding how urban planners will evolve, and the sustainability of small-scale businesses.

Sustainability That Is Based On Traffic And Cars

One of Wing’s most persuasive arguments to both residents and the government is it’s battery powered drones are the lowest emissions, fastest and sustainable option for “last mile” delivery. In essence, Wing promises to take cars off the roads by introducing drones to the skies. However, the business model currently relies heavily on urban sprawl and traffic.

The regions Wing has chosen to target have significant infrastructure issues. While Wing might be able to provide a quick solution to these issues in the short-term however, over the long haul its success is dependent on roads remaining congested and the neighbourhoods becoming inaccessible. This is a huge warning for communities, who prefer an improved transportation system on the ground rather than increasing drone traffic in the skies.

From the point of view of Wing According to an official spokesperson for Wing:

Wing is a great service to those who live in areas with a lot of traffic congestion. […] We believe drones are the best suitable for transporting a tiny item when other effective methods aren’t in use.

In my discussions with residents living in Browns Plains (in Logan, south of Brisbane) and Gungahlin (in Canberra), the conversations quickly shifted into drones, resulting in poor public transport and roads.

Honestly, it’s terrible. There are buses that can take over an hour to reach Woodridge. It’s only a 13 minute drive down the road, and it takes forever to arrive. The traffic is always bad.

Parking was a frequent source of complaint for these locations:

The design of Gungahlin It’s as if everything are being added to. The rapid growth of many high-density constructions has brought a significant change to parking and other issues for people who want to go to the mall, […] there’s no parking.

The Abandonment of Small Businesses In Favor of Large Partnerships

In the year 2019 the year that Wing first arrived at the city in Logan in Queensland the company partnered in partnership with businesses from the area. In the theory, Wing would help these companies reach more customers as well as “take [them] to new heights”.

This method was extremely successful. Local hardware shops, coffee shops, and grocery stores supplied supplies in Wing’s warehouses. The year 2021 was the time Wing has declared Logan “the drone delivery capital of the world”.

However, in 2022 Wing started to shift towards a business model that was simpler to scale up. Instead of purchasing and supplying its own warehouses and also managing its own delivery service, Wing struck deals with major retailers like Coles as well as DoorDash.

Customers and local businesses feel sucked into the chaos. A local resident said to me:

The main reason we decided to join the site was that, it’s still possible to help local. You can get it delivered fairly cheaply and there’s also a convenience aspect. Then, when they’ve taken everything away, for instance Boost Juice is likely the only thing I’m using on the site currently, and it’s via DoorDash or even via their website directly.

A business owner from another said he was “ditched”:

They set a deadline to it and stated “We’re redoing the way we’re doing business.” […] They made the decision to reduce their expenses even although they’re controlled by Google and they’ve made lots of cash. They’ll use the rooftop space of the biggest shopping centres and take off the drones from there. They will also make use of the inventory from Coles or whatever they were working in the moment.

The huge partnerships of Wing also make it difficult for smaller companies to make a mark. Local shops can’t meet the requirements of a delivery in ten minutes. commissions on delivery platforms of up to 15% could affect their profits.

A Wing spokesperson said to The Conversation the company is providing service delivery to more small companies than they did previously and added that “68% of restaurants and merchants on the [Wing] marketplace are independent small businesses that aren’t affiliated with a national chain or brand”.

Long-Term Effects

The image emerging from my conversations shows that drone delivery was initially thought of as a pleasant enough new concept, but the potential negative long-term effects on the quality of life of communities are becoming evident.

Wing’s innovations go beyond technical – like the autonomous drones that it has developed, its physical infrastructure as well as traffic control systems, but are also the social as well as regulatory. Partnerships between major retail chains and developers of properties aren’t less significant in addition, the firm is engaged in creation of new safety regulations and standards for drones. Since it is a subsidiary of the multibillion-dollar US technology company Alphabet (the the parent that is part of Google), Wing has considerable resources for making sure that its business is successful.

Wing has stated that Australia is the future of drone deliveries.. Listening to the tales of those who are experiencing drone delivery We can find out more about the risks they pose and unanticipated effects.