It seems the workers in China aren’t the only ones benefiting from the rise in wages; Mexico has received more offers from US companies to build factories in Mexico over the past year, Reuters states.
Mexico’s wages are now only 14% higher than those in China, a number which was once 17 times bigger in 2002. Along with the closing wage rates, the price of oil has been going up over the last two years; with these two factors in mind, US companies have looked at Mexico to build their foreign factories. 80% of Mexico’s exports already are sent to the US.
For the US, this would be a good opportunity to continue building a relationship with Mexico. Not only are the costs beginning to even out with China, but as stated in my most recent post, having close trade proximity is ideal for both countries. Not only that, but Mexico also imports twice as many US goods than China. Therefore, helping stimulate Mexico’s economy by providing labor opportunities should only benefit American exports too.
Though there may be concerns with the political and social stability of Mexico, the opportunities to improve the environment surrounding these horrible times is evident. Look for Mexico to be on the rise in 2011 as they the people are able to gain more employment prospects.
What do you think of building more factories with our neighbors of the south? Should we still stick with China because their costs remain lower?
For more statistics on Mexico vs China, follow the link below
References: www.reuters.com/article/idustre70p70l20110126
(Post by Evan Amano)
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