Mexico's Resilient Industrial Machine - Mexico Institute in the News

Feb 19, 2013
By

Forward Online

Why is all of this important to the rest of the continent? Jobs, says Christopher Wilson, an economist at the Mexico Institute of the Woodrow Wilson International Center for Scholars in Washington, D.C. Six million American workers, one in every 24, depend on trade with Mexico to stay employed. There are 22 American states whose individual Mexico-related jobs exceed 100,000, with California's 692,000 coming in first and Texas' 463,000 in second. A “back-of-the-envelope” calculation shows how Mexican GDP growth creates new jobs, Wilson adds: Mexico's 5.5% growth in GDP in 2010 prompted a $34 billion increase in U.S. exports to Mexico; every $1 billion increase in exports supports more than 6,000 new U.S. jobs. Mexico's 2011 GDP is expected to grow by 3.8%.

If these assumptions hold true, Wilson says, “144,000 new U.S. jobs could be created due to Mexico's economic growth in 2011.” A modest figure, considering America's jobs shortage right now, Wilson concedes. “But that's with everything else being equal,” he explains. “If we don't do anything else to stimulate trade, we can at least count on the growth rate to create jobs.”

Emphasizing the strength of the relationship, not only is the United States investing billions of dollars in Mexico for things like automobile factories and global banking operations, but investments are also starting to flow the other way. Flush Mexican companies have increased their holdings in the United States from $1.2 billion in 1993 to $12.6 billion in 2010, according to a report by the Woodrow Wilson International Center for Scholars' Mexico Institute.

“Consumers may be surprised to learn,” says economist Wilson, the report's author, “that brands they are familiar with, like Entenmann's, Sara Lee, Thomas' English Muffins, Boboli Pizza Crust, Borden Milk, Weight Watchers Yogurt, Mission Tortillas, Ready-Mix Cement, Tracfone cell phones, Saks Fifth Avenue stores, and even The New York Times, are supported by Mexican investment—as are the U.S. jobs those companies provide.”

The kicker is that investing in Mexican industries creates jobs in the United States, Wilson adds. “A full 40% of the content of U.S. imports from Mexico was originally made in the United States, and it is likely that the domestic content in Mexican imports from the United States is also high,” he says. “That means despite an hecho en Mexico label, a large portion of the money U.S. consumers spend on Mexican imports actually goes to U.S. companies and workers.”

Read more...

Upcoming Events

Webcast

Entrepreneurship and Innovation in Mexico

September 08, 2014 // 12:00pm2:00pm
Webcast

Building Peace in Mexico

September 11, 2014 // 9:00am10:30am

Experts & Staff