Mexico is Latin American winner as Brazil spirals

4/29/16 CNN Money

South-America-BrazilIt’s a tale of two economies for Latin America’s two largest countries.

Brazil is in a political crisis and severe recession. Its president, Dilma Rousseff, could be impeached this year. Brazil’s debt has also been downgraded to junk status.

Meanwhile, Mexico is growing, politics are relatively stable and its debt was upgraded in 2014.

“Right now Mexico and Brazil are as different as they come, this is day and night,” says Alberto Ramos, head of Latin America economic research at Goldman Sachs.

Those diverging narratives bore out Friday. Officials in Brazil announced that unemployment hitnearly 11% in the three months ending in March, way up from about 8% a year ago. Mexico’s unemployment rate is 3.7%.

Mexico’s economy grew 2.7% between January and March compared to a year ago, according to government figures released Friday. That’s even slightly better than what most economists expected.

That’s not stellar growth but it’s a lot better than Brazil’s economy, which shrank 3.8% in the fourth quarter last year and its central bank estimates the economy will contract 3.5% this year.

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Publication | The Impact of Crime and Violence on Economic Sector Diversity

By Viridiana Rios, Mexico Institute Global Fellow
December 21, 2015, Harvard University


Literature has focused attention on identifying whether crime and violence impact growth via changes in economic factor accumulation, i.e. reducing labor supply or increasing capital costs. Yet, much little is known as to how crime and violence may affect how economic factors are allocated. Using a unique dataset created with a text-analysis algorithm of web content, this paper traces a decade of economic activity at the subnational level to show that increases in criminal presence and violent crime reduce economic diversification, increase sector concentration, and diminish economic complexity. An increase of 9.8% in the number of criminal organizations is enough to eliminate one economic sector. Similar effects can be felt if homicides rates increase by more than 22.5%, or if gang-related violence increases by 5.4%. By addressing the impact that crime has on the diversification of production factors, this paper takes current literature one step forward: It goes from exploring the effects of crime in the demand/supply of production factors, to analyzing its effects on economic composition.

Download the paper here.

Mexico Violence Linked to Youth Unemployment: Report

1/25/2016 InSight Crime

InSightLogo_main_24bitA new World Bank report states there is a correlation between homicide rates and the number of unemployed male youths during the apex of Mexico‘s drug war, a telling reminder that improving public security requires more than just criminal justice reform.

The recently released report (pdf) examines the risks facing Latin America’s “ninis,” a term used to describe youth who are neither in school nor active in the work force. Using data from Mexico‘s national employment surveys, the study concludes that there is no correlation between the amount of ninis and homicide rates from 1995-2013.

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In Mexico, Jobs Without The Recovery

10/17/14 The Wall Street Journal

people waiting - out of focusAs the U.S. shakes off the “jobless recovery” epithet with a string of solid employment reports, its neighbor to the south appears to be suffering from the opposite problem—recoveryless jobs Mexico’s unemployment rate fell in September to 5.1% from 5.3% a year before, and was down from August in seasonally adjusted terms, the National Statistics Institute said Friday. Urban unemployment slipped to 5.8% from 5.9% a year earlier, but remains way above pre-2009 crisis levels.

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Immigration and the Labor Market

people walking down city street - blurThe New York Times, 6/25/2013

Are American workers are about to experience unwelcome new competition for their jobs? The bill moving through Congress to overhaul the nation’s immigration laws, if approved, would give employers access to expanded visa programs that would admit hundreds of thousands of immigrant workers, of both low and high skills, to toil in workplaces from strawberry fields to technology companies.

The legislation also offers legal status to millions of immigrants working illegally across the country, and ultimately a shot at citizenship. The change would encourage many to roam freely throughout the economy, leaving dead-end jobs in immigrant-heavy sectors of the labor market to seek higher pay elsewhere. But by many accounts, most American workers need not worry about the prospect of hordes of workers entering the country with an eye on their jobs. Rather, immigration is seen as more likely to leave American workers better off.

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Surviving with $15 pesos (Spanish)

Photo by Flickr User Global Tribe
Photo by Flickr User Global Tribe

La Jornada, 2/22/2013

Maria Martinez’s sunken eyes and wrinkled skin make her seem more than 50 years old.  In Mixtec, she explains that she does not remember when she was born;  meanwhile, the nurse revises her records  clarifies the doubt:  Maria is 35 years and the baby she carries in her arms  is her seventh child.

Like her, many families live with 10 or 15 pesos a day (one quarter of the minimum wage)with which they can only afford  pasta, beans and, if revenues improve, chicken or beef every 15 or 30 days. “A chicken costs 80 or 90 pesos, and I can’t afford it,” says Maria.

Even though 300 families receive some aid, malnutrition, remoteness, lack of education, and unemployment keep them in the geography of poverty.

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Mexico’s Coppel Brothers Emerge With $16 Billion Fortune

Bloomberg BusinessWeek, 11/15/2012


In 1970, Enrique Coppel Tamayo introduced a credit card that allowed his working-class customers to buy clothing and furniture at a handful of retail stores he owned in Culiacan, Mexico.

With Mexico’s economy rebounding from the 2009 recession, and unemployment declining, the country’s consumers have more cash to spend on household goods. Coppel’s department stores across the country give the poorer among them the chance to buy a sofa-bed or an iPhone in small payments over six to 18 months. The Coppel empire has expanded despite the surge in violence in their native state of Sinaloa, home to the cartel of Joaquin “El Chapo” Guzman, Mexico’s most-wanted druglord.

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