Thursday, March 8, 2012

A Missing Factor

Mary Anastasia O'Grady writes a column on Latin America for The Wall Street Journal. Most recently she writes (subscription required for access) about the growing middle class in Mexico, summarizing the viewpoints of two Mexican co-authors Luis de la Calle and Luis Rubio who see Mexico as:
A nation where many politicians still think of the electorate as rural and poor but where consumption patterns reveal a trend toward urbanization and upward mobility. Judging by family incomes but also by things like housing rental and ownership, appliance purchases, Internet access and trips to the cinema they argue that today "the middle-class population is the majority in Mexico."

This has occurred "by combining the income of various family members [including remittances from abroad] rather than through the increased income of an individual or couple." In other words, Mexico has not achieved the wage gains generally associated with a rising middle class.
If the middle-class population is now the majority in Mexico it is true in substantial part because Mexico has exported millions of its poor to the United States. This factor O'Grady doesn't mention.