Wednesday, February 20, 2008

Minimum wages in other countries - we never had it so good

This post revisits something that I previously discussed in greater detail in the Ontario Empoblog on December 31, 2005.

My personal view is that whatever our next President McBama does, it won't be enough to solve the illegal immigration issue. Frankly, the only thing that will solve this issue is a steep increase in wages paid to workers in Mexico. (Although, as I've satirically noted, you could achieve the same result by sponsoring a steep decrease in wages paid to workers in the United States.)

If the pay differential between the U.S. and Mexico is reduced, there will be less incentive for people to come here illegally. (For a parallel discussion, see how net emigration from Puerto Rico to the mainland declined as minimum wages were standardized in Puerto Rico.)

People complain about the U.S. minimum wage and say that it is below a "living wage" that decent people should pay to their employees. Well, if U.S. minimum wages are obscene, Mexican minimum wages are downright Satanic. In a recent mrontario post, I linked to a Hispanic Business article which contained the following information on Mexican wages.

The minimum wage in Tijuana is about $4 per day...

Luckily, factory workers don't make the minimum wage. But they're not rolling in wealth.

...with the average factory worker earning $10 or $11 per day....

Can you imagine the outcry if a San Francisco firm tried to pay its workers $11 per day? But it's all right to do this if it's just a bunch of foreigners that are making the low wages.

But Mexico is a dreamland compared to, say, Bangladesh, in which the 2006 minimum wage was the equivalent of US$25. A month. And even then, 80 percent of factories haven't implemented it yet.

Like it or not, there is not a free flow of business between different countries. On the one hand, such a free flow could depress wages in this country. However, on the other hand, such a free flow could raise wages in our neighbors to the south, which would potentially solve many problems in this country, including the continued closure of emergency rooms in southern California.

Some of the links in this post were found at Brock Haussamen's website. You may also want to check the Yahoo page on minimum wages. Although many countries, including Mexico, are not included, the page does allow clickable access to information on minimum wages around the world. Turns out that Mongolia makes Bangladesh look like Robin Leach's best buddies.

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