When it comes to economic agreements, nations must compromise, leveraging their best interests with diplomacy. During his presidential campaign, Donald Trump strongly criticized the country’s past history of negotiating with other countries, claiming the U.S. was always on the losing end. One of his biggest targets and point of criticism was and continues to be Mexico.Peña Nieto and Trump met on August 31, 2016. What happened behind closed doors is not clear, although the Mexican president has been one of Trump’s most vocal critics.
The summit was held in Hamburg, Germany. The photo is from their sit down on July 7, 2017.
Trump promised the wall will be “impenetrable, physical, tall, powerful, beautiful, southern border wall.”
“I would build a great wall, and nobody builds walls better than me, believe me, and I build them very inexpensively,” he promised.
Nonetheless, Mexico has vehemently said they will never pay for such a wall. In addition to building the wall, Trump has also warned that he plans to renegotiate the North American Free Trade Agreement (NAFTA).
He plans to cut the $64 billion trade deficit with Mexico by manufacturing within the United States. He said things will be made in the 50 states like baseball bats and fire trucks.
Trump’s 18-page goal report said it would also renegotiate NAFTA so that more products would be bought from the U.S. NAFTA has been in effect since 1994.
In order to avoid Mexican workers migrating to the United States, Trump is asking Mexico to increase its minimum wage. Mexico has a daily minimum wage salary rather than hourly.
By increasing Mexico’s wage, this would discourage companies from moving south of the border. Mexico has the lowest wage among the developed countries.
It increased it from 73.04 pesos to 80.04 pesos. At the time of the exchange rate in January, it translated to $3.52 to $3.86.
Violence from the drug war, an increase in fuel as well as food prices, are just some of the things facing a country with a population of 127 million people.
A food basket to feed a family of four at the end of 2016 cost $10.52 a day. Even with the daily salary increase, a family would still be short $6.66.
Peña Nieto was sworn into the presidency in 2012. He promised to fight corruption at all levels of government, decrease violence, drop in crime, improve the economy, and make education a priority. When he was elected, he had a 50% approval rating.
The 51-year-old has been plagued with his own set of scandals that include the purchase of a $7 million dollar mansion in one of Mexico’s most exclusive neighborhoods. The house was under the name of a construction company that had won contracts from the time Peña Nieto was the governor of Mexico City and was in charge of granting the contracts.
A contrast to the 26.9% increase in food purchasing, according to Mexico’s Animal Politico. How Mexico will be able to increase that wage gap is still unclear.
Nonetheless, Mexicans are arguing that their minimum salary wage is illegal. Human rights group further adds that it is also unconstitutional.
“The situation is serious to such a degree that it violates what’s stipulated in the Constitution,” Esquivel, told El Daily Post. “The minimum salary must guarantee a decent standard of living.”
They invoked the article that says “the minimum salaries should be sufficient to satisfy the normal necessities of a family head, of the material, social, cultural nature and to provide the obligatory education for the children.”
“Decent work … is the motor of progress and social prosperity, grand aspirations that are common to all humanity,” Gonzalez Perez said. “Men and women workers have the right to enjoy material well-being and economic security to satisfy the needs inherent in their dignity.”
Forbes says 15 millionaires are controlling the country. These juggernauts amass $148.5 billion or 13% of the total Mexican economy.
In fact, the richest man in the world, Carlos Slim, comes from Mexico. Televisa, Grupo Minera México, and Industrias Peñoles, Banamex are media, mining, banking, and food companies not willing to let go of their old wealth.
That works out to be 45% of the population living under the daily standard of living. It will take the Trump administration, the Mexican government, and Mexican businesses to work together.
Living under violence, poverty, and uncertainty means they can no longer look at the U.S. as a way out for a better living. They are now relying on their own government to do the heavy lifting.
According to Enrique Provencio, a researcher at Mexico’s National Autonomous University, it is more than just raising the minimum wage.
He said during a seminar on the study of development that the “the inability to live a dignified life hindered the exercise of democracy.” A labor reform focusing on salaries is the first step he advised.