Thursday, February 3, 2011

A Poor Canadian Living in Rich Mexico - Part 2 - The Stats

Wealth Distribution - two scenes from Mexico City
Of course, the idea that Mexico is financially richer than Canada is absurd; I acknowledged that in my last post!  But it's not just my imagination that Mexico has a lot of very well-to-do people.

Comparing some of the stats from the two countries will help show the bigger picture.

These are taken from the CIA World Factbook, a great source of statistical info for just about any country:

                                                                         Mexico                    Canada
Population:                                                 110,000,000             31,000,000
Gross Domestic Product:                         $1.56 trillion            $1.3 trillion
GDP per capita:                                          $13,800                     $39,600

Average household income:                    $10,000                   $26,000
                                                                    (these last two are from Wikipedia - it's all in US dollars)

So, while both countries are "trillion dollar class" economies - a status shared by only 14 countries - and Mexico actually has a larger economy than Canada, the fact that Mexico shares that wealth between more than 3 times as many people makes it pretty clear where average wealth is higher.

But there's one little detail the CIA World Factbook points out:

While in Mexico "per capita income is roughly one-third that of the US, income distribution remains highly unequal."
 In Canada, on the other hand, this is less of a problem.

The World Factbook backs this claim with it's "Distribution of family income - Gini index" ranking Canada (32) much better than Mexico (46) (A lower number means better family wealth distribution; the "best" country has a score of 22; the U.S. is only slightly better than Mexico at 42.)

While Mexico has very low unemployment it has big problems with underemployment - people who have jobs, but don't get paid enough for that job.  Putting all this together means, while Mexico has one of the world's best economies (being in the trillion dollar class is really impressive!) there are really rich people who have most of this money, and there are really poor people who see little of it; the idea will come as no surprise to most Mexicans, who complain about this often.

What they forget, though, is that this same fact means that many Mexicans have a good deal more wealth than many Canadians.  By visual impression, I would think there are more really rich people in Mexico than in Canada. But Forbes' list of country by number of billionaires suggests the opposite; Canada has 24 billionaires, while Mexico has 9.  Canada also has considerably more millionaires.  Maybe the Mexican wealthy just like to show it off a bit more.

These same stats also means that a "poor" Canadian really doesn't compare in any way whatsoever to a poor Mexican; but in this case it's Canadians who need to be reminded of this fact, not Mexicans.

Canada tends to be a very middle class country, while Mexico's middle class seems to be smaller than it should be.  One of my friends from Mexico City pointed out that the middle class of the city's southern area is a very small community that tends to be fairly closely connected; this is surprising from a city with almost the same population as Canada.

Canada hasn't accomplished this through socialism; in fact, the Heritage Society ranked Canada #6 worldwide, in its "Index of Economic Freedom World Rankings" - and I don't believe socialism figures very positively into this ranking. I'm definitely not bragging, here, just an analysis.

(Completely contrary to popular beliefs and absurd blanket statements from both sides of the political spectrum in the Canada and perhaps the U.S., Canada actually has more capitalist economic freedom than the U.S. which ranks #9.  It's very strange, for that reason, that left-leaning Canadians like see the country as more socialist, and right-leaning Canadians as well as right-leaning detractors of  Canada from the U.S. like to complain about Canada's "socialism," which seems to be a fabrication of political image.)

Back to Mexico, though, some people are saying that the country's middle class is growing.  I don't enough about economy to say how this would be best done, but I just hope it's true.

The first part of this post was about  my personal experience living in Mexico with very little money - and the difficulties in convincing people of that fact:

1 comment:

  1. Well done, my friend, very well done. The US middle class is going away. There is more money in fewer pockets than ever and more middle class folks like me are slipping into the low income bracket. I couldn't go back home even if I wanted to because there are NOOOO jobs where I'm from. I was talking to my dad on the phone a couple of days ago and I was telling him how worried I am that I can't survive on $30 per day. His reply was that $30 per day is better than the zero dollars per day that I would be earning in Michigan. There was a time when I was working in Michigan at a crappy job and earning $4300 per month with full benefits plus four weeks paid vacation. Those jobs are gone. Now I make $600 per month take home and no benefits or paid vacation. Plus I work ten times as hard at my job. This is a tough pill to swallow! If ya have any tips I'd be glad to have them.