Mexican Remittances And Wal-Mart’s Shadow

Ideas and Issues

walmart_mexicoMexico City We met early in the morning with the director of research for the Universidad Obrera de Mexico (Workers University of Mexico)’s direction of investigations, Laura Sanchez.  We had already read some of her articles in the bi-monthly magazine, trabajadores, about the way that Wal-Mart was reducing wages in agriculture in Mexico, which had riveted my attention.

The Universidad Obrera is a small, public college that has existed since  about the Mexican Revolution more than 70 years ago.  Currently they are having some difficulty funding issues that revolve around former leadership of the school, but meant that as we met with Sr. Sanchez, she and the other professors and researchers here were unpaid, computers were gone, internet connections had been shut off, and they were managing on shoe strings, literally.

To the point though the additional thoughts she shared on the Wal-Mart impact on agriculture and particularly its propensity to import goods and take advantage of tax codes, was of interest to our our India FDI Watch coalition which is right now contending with governmental efforts to once again reform foreign investment rules at the peril of workers in the cities and farmers in India.  Ironically, the biggest claim the multi-nationals make in India is that modern agriculture and distribution impacts on the supply chain will increase the wages of ag workers.  Sr. Sanchez says the research in Mexico is finding the opposite with Wal-Mart.  And, this doesn’t even factor in the number of informal workers that Wal-Mart uses in Mexico, which Sr. Sanchez and others believe is illegal under Mexican law.

Additionally we talked about the impact of remittances and how to lower these costs which has been an issue for ACORN International.  Their research argues that remittances, even today in the depressed economy, are the #1 economic engine in Mexico, as opposed to the government’s arguments that natural resource extraction (oil) and tourism come ahead on the list.  We talked at length about the varying bank charges on both sides of the border.  We are hopeful that once this current crisis works its way out which seems soon, that a partnership between Universidad Obrera and ACORN International can finally put together the research we need to push banks around the world to finally do the right thing with governments finally providing the regulations that bring them in line.

Arizona had to be on the agenda of course.  The news of a DOJ lawsuit hardly seemed to move anyone we spoke with in Mexico.  The lines are simple.  They see the story much differently and find mainly hate in the eyes of the argument.  There’s a lot more to be said about this in coming days.