The value of $1

What can a dollar buy you in Mexico?

  • 2 pounds of tomatoes
  • a toy for your child on a Sunday afternoon walk
  • a hand-crafted clay candle holder
  • 1 liter of gas (¼ gallon)
  • 2 rides in public transit in my city or 4 rides in Mexico City
  • 1 kilogram of tortillas (more than 2 pounds)
Veggies purchased for $1: 4 carrots, 1 bunch of parsley, 2 onions, and 2 squash

Veggies purchased for $1: 4 carrots, 1 bunch of parsley, 2 onions, and 2 squash

I think the question is a bit too simple though. A more interesting one would be: what does a dollar mean to each person in Mexico? When asked this way, a light sheds on the growing gulf between the rich and the extremely poor.

The most vulnerable to poverty: indigenous people, women, children, elderly, and those living in rural areas

The most vulnerable to poverty: indigenous people, women, children, elderly, and those living in rural areas

The latter is the question that development agencies ask, and this is what the World Bank found in 2010 when they investigated poverty in Mexico:

  • 1 out of every 2 people live on less than 40 dollars a day
  • 1 out of every 3 people live on less than 5 dollars a day
  • 1 out of every 4 people live on less than 4 dollars a day
  • 1 out of every 10 people live on less than 1.25 dollars a day
About half of the Mexican population lives in poverty

About half of the Mexican population lives in poverty, twenty percent live in extreme poverty

When the value of a dollar is seen in those terms, you stop thinking that public transit is cheap and wishing for equivalently priced tomatoes. Instead, you start thinking about how challenging it must be for a large percentage of Mexicans to feed their families. And you realize that many still have little access to education, quality health care and clean water.

Some college students recently made a documentary film about their experience living on one dollar a day in Guatemala. It sheds light on the reality of living in extreme poverty. I highly recommend checking it out. Here’s the preview:

Mexico has been divided this way for centuries; rich and poor. But Mexico is changing, rapidly.

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The distribution of wealth is similar to that of the United States: one percent of the population holds almost 45 percent of the wealth. Mexico is home to some super wealthy people, including the richest man in the world. And they are getting richer every year.

But what is really interesting is when you look beyond the extremes. When you shine the spotlight away from the top 1 percent and the bottom 50 percent, instead looking at the remaining 49 percent of the population. These are the rich and the middle class.

The middle class is growing, expanding at much higher rates than the super rich. As a result, migration rates to the United States are slowing, and the quality of life for half of Mexico is improving leaps and bounds. This does not look like a passing trend.

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As a Peace Corps Volunteer, my work is focused on development for the benefit of the poorest 50 percent of the population. We live among the poor, and we are paid in similar-to-slightly higher stipends, meant to cover our basic needs and ensure that we have enough to choose safe housing, food and travel options.

I earn about 21 dollars a day. I am considered to be living in poverty. The difference is that my household consists of one person; myself. I am not supporting a family; I was able to build a savings account for unexpected expenses; and I know that no matter what happens, during the next year my stipend will be direct-deposited into my account each month.

Peace Corps changes your perspective. When I self-reflect, I see how much I have rather than what I sacrificed when coming to Mexico: I have running water and a boiler to heat it; I have a sink inside my kitchen; I have electricity and I do not need to make a fire inside my home in order to make my food.

I have financial security and stability. And I only need to work one job.

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Many Mexicans work several jobs because one is not enough. And 3 of every 5 Mexicans work in the informal sector. They make and sell things on the street, or they provide services by word of mouth. You can imagine how these nontaxable jobs affect state and federal investments into social programs and infrastructure.

So many jobs are in the informal sector, and are done by hand

So many jobs are in the informal sector, and are done by hand

These are entrepreneurial people who see needs around them, and recognize how their abilities can meet those needs. It may surprise you to learn that about 1.1 million of the informal sector labor force are children between 5 and 14 years old.

Many children in Mexico help the family out by selling sweet bread at fairs or other such jobs

Many children in Mexico help the family out by selling sweet bread at fairs or other such jobs

While they call it the shadow economy, it is visible everywhere. You just have to look out of the window and you will see countless examples:

  • Children filling potholes in the road with shovelfuls of dirt, asking for tips from drivers. The local and state governments often do not have money to repair roads
  • A man carrying 5 handmade chairs on his back to his regular spot on the sidewalk. There, he can sell his handiwork without the cost of maintaining a permanent store
  • People using their incredible whistling skills to direct cars as they parallel park. They also maintain an eye on the car while it is parked for tips
  • Carts of all shapes, sizes, colors, and physical conditions used to push items like snacks, household items, and toys around the streets in search of customers. They typically have a distinct song or noise to alert potential customers who are still in their homes that the tamale man is passing by!

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I live among dreamers. They are people who tap into their creativity and ingenuity to make a better life for their families. One of my co-workers, Daniel, is a great case-study in the modern Mexican economy.

Ever positive and kind, my co-worker Daniel

Ever positive and kind, my co-worker Daniel

Daniel lives with his wife and 11 year old son. He earns his main income at the national park as the supervisor of the park rangers. His work schedule is set in 24 hour shifts, every other day with no vacation. That means that exactly half of his time is spent at the park, away from his family.

The other half of his time, Daniel creates miniature figures out of natural materials: a 2×2 inch boat made out of a walnut shell and cactus fibers; a statue of a person made from acorns and wood shavings. They are beautiful and intricate. He teaches his son, who like his father is quiet and kind. They sell their crafts together at fairs when they are not selling their homemade ice cream.

He is also plotting the set-up of a store that will sell roasted chicken. I have no idea when he will be able to make this dream come true, but the plan is set in his mind.

Like so many in Mexico, he is able to afford a nice, comfortable middle class home, school fees for his son, and the upkeep on his car. And just like so many others, Daniel straddles the line between poor and middle class.

His story is similar to so many people across this country. They have opportunity here in Mexico, so they chose to stay. They work hard and often, and many try to help their fellow countrymen rise slowly out of poverty.

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More daily wages in Mexico:

  • $4.50 – minimum wage
  • $7 – government-paid temporary project workers (I work with these people regularly)
  • $30 – typical middle class income
  • $56 – median household income in Mexico, 2012
Community members hired by the government for temporary jobs, paid about $7 per day

Community members hired by the government for temporary jobs, paid about $7 per day

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Making me smile, Thanksgiving edition

This year, I am thankful for:

  • Having a comfortable place to live with indoor plumbing, hot water, and electricity
  • Having good health, and for the good health of those around me
  • Having people in Mexico who have served as my proxy family and friends, adopting me and making me feel at home
  • Having a family back home who love and support me, even from afar
  • All of the surprises that Mexico provides each day, like when I looked out of the window of a cafe and saw an elephant drive by, wearing loud-speakers. Turns out, it was a life-sized but realistic plastic replica announcing the circus
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4 responses to “The value of $1

  1. As with so many of your posts, you remind me that there is so much to know about how others in our world live. In our ‘ordinary lives’ we all can’t help but get caught up in our own immediate decisions, struggles and hopes. But, I think it it’s so important to know the things that others around our small world are dealing with.
    Thank you for helping me understand.
    Happy Thanksgiving to you. I hope today was filled with fabulous treats. We missed you at the table today, but know that you are doing such wonderful things.
    Blessings to us all.
    Love you
    Aunt K

  2. What a well-written and insightful post about Mexico’s economy! And Daniel sounds like an amazing person; thanks for sharing his story!

  3. Reblogged this on From PC to PC and commented:
    Really interesting look at how the economy of developing countries affects peoples’ personal lives from a fellow PCV in Mexico. While I don’t want to brush over the differences between Mexico and Guatemala (and there are some pretty big ones; Guatemalans actually harbor a lot of historical bitterness toward their neighbor to the north, who they see as the more developed, more powerful, and generally all-around-luckier country) but a lot of this post resonated with what I’ve seen in my town. The “shadow” economy is also a huge part of life in my community, and I also see the big differences between the poorest of the poor here and those (like my host family) that are slowly moving up into what is Guatemala’s “middle class.”

    Anyway, check it out!

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