Foreign Workers in Mexico: Labor, Wages, and Globalization

Introduction: Mexico's Population and Economy

Mexico is a large country with an approximate population of 107,449,525 people, growing at an average rate of 1.16% annually. Over the years, a general trend has emerged in the movement of people from rural to urban areas in search of better lifestyles and available opportunities. As a result, most cities have continued to register high numbers of residents; approximately 70% of the country's total population lives in urban areas, leaving only 30% in rural regions. The Mexican government faces the ongoing challenge of a rising population, which continues to strain the economy and put pressure on scarce resources. Mexico City is considered the most populated urban center, as it supports a wide range of economic activities (Maps of the World, 2012).

To a large extent, both federal and local governments have made efforts to distribute resources to other cities in order to develop these regions equally — an effort to decentralize businesses, services, and governance. The government has introduced free education, giving citizens the opportunity to acquire basic schooling. Both federal and state governments have continued to finance and support universities and other institutions offering tertiary education, in order to ease the financial burden on parents and students. While the population is fairly educated, job creation and the expansion of employment opportunities remain the primary challenges the government faces.

Foreign Workers and Investment in Mexico

Due to the scarcity of jobs and weak domestic demand for labor, the country has suffered significant brain drain, with top professionals either emigrating or moving abroad to seek opportunities in developed nations with stable and advanced economies. Mexico has continued to offer cheap labor to its neighbors across various professions, owing to the affordability of its labor market. The majority of its workers are either unskilled or semi-skilled, which is one reason why nations in need of inexpensive labor — including the United States and other developed countries — have consistently turned to Mexico.

Even as the country has lost portions of its workforce to other nations, it has also continued to attract foreign companies and investors who create jobs domestically. Mexico must trade with other nations to find markets for its produce and minerals. The country operates an open economy, welcoming trade and the employment of foreigners as executives in its companies. Mexico is endowed with natural resources that have greatly attracted foreign investors; as a result, many professionals have been employed in the mining industry in collaboration with local partners and workers. In other sectors, such as agriculture, the constitution imposes restrictions on how much land an individual foreign investor may hold, with only a small percentage allocated to foreign investors.

Mexico's affordable labor has allowed it to benefit from partnerships with foreign companies located near the U.S. border, taking advantage of its favorable wage costs compared to other industrialized nations. These professionals and executives have enjoyed a mutually beneficial working relationship, a dynamic facilitated by Mexico's open economy and by its membership in the World Trade Organization (WTO), which has brought about reductions in tariffs among member nations. Mexican executives and professionals have gained valuable experience and accessed better employment opportunities compared to some of their local counterparts. This arrangement has also helped create a blend of cultures, which is broadly beneficial. Mexican professionals, in turn, take advantage of reduced border restrictions to seek employment abroad and negotiate for better compensation. The primary drawback, however, is that opportunities occupied by foreign workers may be denied to similarly qualified local candidates (Economy Watch, 2010).

Conclusion

Globalization contributes to wealth creation, creates flexibility within the job market, and develops the economies of participating nations. It does not, however, make wages uniform around the world; instead, it makes wages more competitive. It is ultimately up to individuals to make use of the open economy by setting their wages based on their qualifications and the complexity of the work involved (Vorton, 2010).

Countries should open up to foreign workers in order to encourage foreign investment and develop their economies. Globalization has opened up markets, and countries should embrace this concept by creating opportunities and taking advantage of wage differences to source labor. Mexico should open more markets, develop more trade contacts, and continue building its economy in order to sustain its growing population. If Mexico grows its economy, it will be better positioned to support the labor market and improve overall productivity. However, governments must also exercise oversight to ensure that local workers have equal opportunities, thereby reducing unemployment — a major challenge in nearly every economy today.