November 24, 2013

ON TO TACKLING CRIME AND CORRUPTION:

In Middle of Mexico, a Middle Class Rises (DAMIEN CAVE, 11/19/13, NY Times)

This is a Mexico far different from the popular American conception: it is neither the grinding, low-skilled assembly work at maquiladoras, the multinational factories near the border, nor the ugliness of drug cartels. But the question many experts and officials are asking is whether Mexico as a whole can keep up with the rising demand for educated labor -- and overcome concerns about crime and corruption -- to propel its 112 million people into the club of developed nations.

"We are at something of a turning point," said Eric Verhoogen, a professor of economics and international affairs at Columbia University. "The maquila strategy has been revealed not to have been successful, so people are looking around for something new."

The automotive industry has been Mexico's brightest spot so far. In many ways, central Mexico has already surpassed Detroit. There are now more auto-industry jobs in Mexico than in the entire American Midwest. At least 100,000 jobs have been added in Mexico since 2010, according to a recent Brookings Institution report, and General Motors, Ford, Chrysler, Honda, Mazda, Nissan, Audi and Volkswagen have all announced expansion plans, with nearly $10 billion to be invested over the next several years, mainly in a 400-mile corridor from Puebla to Aguascalientes.

The work tends to be better paid than what could be found in the area before the companies arrived. It is still a fraction of the salaries of American workers -- many employees on the factory floors in the interior port make around $3.65 an hour -- but higher-paid professionals make up about 30 percent of the employees at many auto plants here, roughly twice as much as in the maquiladoras near the border.

And although robotics and other changes have kept overall employment in the industry somewhat limited, more of the industry has moved to Mexico as the car business has recovered. Around 40 percent of all auto-industry jobs in North America are in Mexico, up from 27 percent in 2000 (the Midwest has about 30 percent), and experts say the growth is accelerating, especially in Guanajuato, where state officials have been increasing incentives.

The 2,600-acre interior port, for example, has become a draw because, in addition to the polytechnic, the state built customs facilities, a railroad depot and a link to the local airport. Guanajuato also helps find candidates for companies to hire and, in some cases, gives them free classes to help them pass standardized tests required for employment. At Volkswagen, many of the young men and women flowing in and out of test-taking sessions said they benefited from the assistance.

Guanajuato even pays companies a small bonus for sending workers abroad for training. Mauricio Martínez, 29, an engineer at the Italian tiremaker Pirelli, which was one of the first companies to take up residence in the port, said he and his wife, Mariana, still saw their trip to Prague after his training in Romania as a fairy tale.

"I'm a small-town guy," he said one day after work, in his kitchen with a beer. "But there I was; an Italian company from Milan hired a small-town guy from Mexico."

He said he now makes $2,250 a month ($27,000 a year), far more than at his old job at a tow-truck company and roughly double the median household income nationwide. That's more than enough for a middle-class life here. Both husband and wife drive to work, and this year they bought a three-bedroom townhouse in a new development for about $80,000. On a recent visit, "The Big Bang Theory" played on their flat-screen TV as a neighbor watered her patch of lawn no bigger than a beach towel.

While cooking dinner, Mrs. Martínez said that her husband's job had given them the credit and stability they needed to start her own business -- a gourmet salad shop in a colonial village nearby. And as is common in other countries with an expanding middle class, such as Brazil, their economic rise has led to demands for better government.

Posted by at November 24, 2013 6:57 AM
  

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