Labour In Mexico: A Vicious Dependency Cycle


 Jesus
Arturo
Segura
Sanchez
 Student
ID
#:
200272869
 ECON
211:
Development
Economics
 Professor:
Arla
Cameron
 October
28,
2010





Segura

 1


Labour
in
Mexico:
A
Vicious
Dependency
Cycle
 Mexico
has
a
free
market
mixed‐economy
that
supports
a
population
of
110.6
 million
of
people1.
This
market
ranges
from
a
modern
to
primitive
industry
as
well
as
an
agricultural
sector.
Mexico’s
industry
does
not
fulfill
the
labor
force
demands
that
 result
from
an
unemployment
rate
of
5.5%.
In
addition,
the
underemployment
rate
 could
be
as
high
as
25%.
Mexico's
GDP
plunged
6.5%
in
2009
as
world
demand
for
 exports
dropped
and
asset
prices
tumbled.
The
government
of
Mexico
continues
to
 face
many
economic
challenges
including
high
income
inequality
distribution,
improvement
of
the
public
education
system,
upgrading
infrastructure,
modernizing
 labor
laws,
and
fostering
private
investment
in
the
energy
sector2.

With
the
 development
of
societies
and
technologies,
nations
started
to
create
trade
agreements
 in
order
to
promote
market
growth.
Mexico
is
part
of
different
trade
agreements
that
 stalled
it
in
a
dependent
state
towards
the
wealthy
nations.


























































1

2010
World
Population
Data
Sheet.
Population
Reference
Bureau

.


2
The
World
Factbook.
North
America:
Mexico.
Central
Intelligence
Agency
.






 After
the
First
and
Second
World
Wars,
the
world’s
economy
was
going


Segura

 2


through
a
rough
crisis;
therefore,
many
different
trade
treaties
were
taken
into
action.
 With
the
application
of
the
trade
agreements
some
concerns
and
argues
emerged.
Who
was
gaining
more
and
who
was
being
exploited
were
amongst
them
and
soon,
 treaties
started
to
been
questioned.
This
matter
was
the
basis
for
the
creation
of
the
 Dependency
Theory.
The
Dependency
theory
explains
how
the
developed
countries
 interact
with
undeveloped
countries
within
a
trading
market.

This
theory
can
also
be
 seen
as
an
opposition
to
free
trading:

free
trading
is
supposed
to
support
and
help
the
economic
growth
t
of
undeveloped
nations
and,
the
Dependency
Theory,
only
focuses
 on
the
unfairness
advantages
of
the
developed
nations
versus
the
undeveloped
ones.

 The
Dependency
Theory,
inspired
by
the
Brazilian
economist
Celso
Furtado,
 maintains
that
underdeveloped
nations
continuously
nourish
developed
nations
at
the
 expense
of
the
developing
nations’
own
health.
These
underdeveloped
nations
are
basically
acting
as
colonial
dependencies,
sending
their
wealth
to
the
most
developed
 nations
with
minimal
compensation.
The
Dependency
Theory
also
suggests
that
 developed
nations,
actively
keep
underdeveloped
nations
in
a
subservient
position
 through
exploitation,
economic
force
by
instituting
sanctions,
or
by
prescribing
free
trade
policies
attached
to
loans
granted
by
the
World
Bank
or
International
Monetary
 Fund.

“The
result
is
‘peripheral
capitalism’,
capitalism
unable
to
generate
innovations
 and
dependent
for
transformation
upon
decisions
from
the
outside’”
(Nafziger
144).

 Some
of
the
basic
premises
of
the
Dependency
Theory
are:

1.

Poor
nations
provide
natural
resources,
cheap
labor,
a
destination
for
obsolete









technology,
and
markets
to
the
wealthy
nations.
This
leaves
people
from








Segura

 3


developing
countries
without
the
opportunity
to
reach
a
decent
standard
of
life.
 2. Wealthy
nations
actively
perpetuate
a
state
of
dependence
by
various
means.
 This
influence
may
be
multifaceted,
involving
economics,
media
control,
politics,
 banking
and
finance,
education,
culture,
sport,
and
all
aspects
of
human
resource
development
(including
recruitment
and
training
of
workers).
 3. Wealthy
nations
actively
counter
attempts
by
dependent
nations
to
resist
their
 influences
by
means
of
economic
sanctions
and/or
the
use
of
military
force.3
 
 Mexico’s
economy
is
primarily
oriented
to
the
export
of
goods.

The
most
...