US inflation continues to rock the Mexican economy, forcing more migrants to the border

The United States posted an inflation rate of around 6.8% at the end of 2021, placing it sixth among the countries with the highest inflation rate among the 20 largest economies. of the world. Next to the United States, in fifth place on this list, was its neighbor, Mexico.

Mexico ended 2021 with an inflation rate of nearly 7.4%, Trading Economics reported. While 2021 saw the country’s economy grow by almost 6%. Like the United States, which grew 5.6%, it now faces uncertainty in the face of a steady wave of price increases.

Like its neighbor to the north, which has seen a wave of wage increases, Mexico has also decided to increase the incomes of its workforce, with border communities raising their hourly minimum wage rate by $ 1.33l the hour to $ 1.62 and the hour — a 22 percent increase.

However, even with this measure in place, Mexican citizens still might not be able to avoid the ripple effects of an overheated US economy.

Ariel Ruiz, policy analyst at the Migration Policy Institute, said News week that because the American and Mexican economies are so closely linked, Mexico’s economic success and failure tends to mirror that of America. When U.S. inflation drives up the price of parts and materials, Mexico’s manufacturing sector suffers, and as that sector suffers, Ruiz said economic opportunities begin to dry up.

Mexican citizens could look to economic opportunities in the United States if inflation causes the country’s formal economy to contract. Here, people climb a section of the border wall on April 29, 2018 in Tijuana, Baja California Norte, Mexico.
Photo by David McNew / Getty Images

“Inflation is causing economies on the border with Mexico and the United States to contract,” he said. News week. “Most of those [economies] become difficult to access, the more likely it is that these people from northern Mexico will consider emigrating. “

While Ruiz doesn’t expect this problem to lead to short-term migration, he said the effects of long-term inflation could spill over into the Mexican economy, from its profitable manufacturing sectors to lesser industries. which benefit from manufacturing revenues. Ruiz said this could put significant pressure on the country’s poorest cities, leading to a potential wave of migration.

Already, authorities at the southwestern border of the United States have seen a constant flow of single adults with Mexican citizenship heading for the border. Since March 2021, border officials have met more than 50,000 single Mexican adults each month, with the number approaching 60,000 in November and October. Tony Payan of the Baker Institute for Public Policy at Rice University said News week in May that these people tend to migrate for economic reasons.

While this demographic currently does not make up the bulk of the nearly 174,000 people who have arrived at the border, this trend could change if stable employment opportunities shrink and Mexicans are pressured into making a living by doing business. informal work that does not benefit from a paycheck.

“If industries continue to contract, Mexicans will be more inclined to work in the informal sector, and this informal work could be the first step in making the decision to migrate,” Ruiz said. News week. “The US-Mexico border is so intertwined that anything that happens on one side will affect the other.”

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