Minimum wage

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Few debates are so relevant for the public attention such as the one that is going on right now in Mexico about minimum wages. The fact is that this economic concept is so important to a personal and a national level because it determinates the standard of living of people and societies in general. My interest started after reading an opinion about how the high standard of living of countries such as Germany and Switzerland is in part the result of their flexible labor systems that exclude the minimum wage.

My basic knowledge about the topic motivated me to look up some studies related to the impact of changes in the minimum wage on diverse economic aspects. With this research I don’t expect to state an expert opinion in the topic or to reach to conclusive answers about this issue. This exercise has to do more with identifying key element points that can help to shape more robust opinions in this concern.

First, I learned that the minimum wage is an economic variable with great impacts in diverse economic factors. There are empirical studies focused in impacts of the m.w. on employment, income inequality, inflation and skill differences between workers. Surprisingly, I also learned that m.w. has no impact in these same concepts whatsoever. More clearly, empirical results from studies show most of the times inconclusive results in this regard. What a dilemma!

Conventional economic analysis states that increases in the wage floor have as a consequence two effects in the economy: the substitution effect and the scale effect. More precisely, when wages increase the production cost for employers rises; this at the same time motivates the producers to increase prices of goods and services that they offer. The inflationary impact firstly disincentives consumption of these goods and services, secondly reduces of production levels and finally lowers the demand of workers (scale effect).

On the other hand, the increase of the wage floor drives up the costs of labor (mainly low skill labor) with respect to other production factors. This increase in costs disincentives labor investments in the production (substitution effect).

It is also true that high wages also tend to disincentive the attraction of investment in highly productive sectors of the economy. These ideas are linked to the economic growth theory that emphasizes that increases in the productivity of an economy are the adequate way to reach sustainable economic growth more than increases in wages. However, increases in the productivity are explained by changes in technologies and increases in the educational and training levels of workers, factors that require long-term strategies to change.

For all of the above it is pretty clear isn’t it? We have to avoid taking decisions towards changes in m.w. Due the fact that market economy will define the optimum level of labor needed for the production with the optimum level of wage required. Haven’t we?

The main issue with this statement is that assumptions on this model don’t directly hold to the reality of actual labor markets. Moreover, these assumptions specifically don’t hold to the reality of labor markets in developing regions such as Latin-American countries. The studies mention several economic distortions in Latin American labor markets such as: differences in skill levels among workers, non-perfect competitive markets and informal markets.

In Latin America, low skill workers have wages near or equal to the level of the m.w. Furthermore, the income of these workers is usually the lowest in the society. For this reason, if m.w. changes, the incomes from these workers will be the ones that would present the biggest changes in relation to other segments of the population. A research of the World Bank and the University of Bogota found in this regard that increases in wages have a positive impact in the income redistribution of societies. In this same way the University of Illinois found in Honduras a positive impact in the redistribution of income when wages of workers close to the wage floor increase. If we consider that 10% to 30%[1] of formal workers in Latin America have incomes near or equal to the m.w. , We can state that changes in m.w. affect a great segment of the working population in these countries.

In the case of informal workers, the studies show that the m.w. is a relevant indicator to measure the income of this segment of the workforce. In addition, the studies show a lighthouse effect in changes in the income level of informal workers when m.w. changes. This argument is very important if we consider that a great proportion of labor in Mexico works in the informal sector.

The redistribution effect of income of the society has a natural impact in the inequality level of societies. If the low-income workers (the ones closer to the m.w.) have an increase in their income, the differences among the highest and lowest percentiles of the society reduce significantly. As an example, researchers at the London School of Economics in their study of the real wage in Mexico during 1980 and 2004, found that the degradation of the wage in real terms contributed to the increase in income inequality in the Mexican society.

It is very important to highlight that, authors of these studies warned that these results don’t define m.w. as an economic tool to eradicate poverty, due the potential impacts in unemployment and inflation mentioned in the last paragraphs.

Here we found two different approaches for analyzing the changes in the m.w., and the issues when deciding about increases or decreases in the m.w. As I mentioned earlier my intention here is not to arrive to a final conclusion, but to show part of the previous arguments in this respect. In the end it is good to shape our own conclusions considering the important aspects of the topic.

[1] In specific for Mexico, in a recent calculation of the UNDP states that 40% of the workers have an income close to the m.w.

El salario mínimo

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Pocos temas atraen tanto la atención como lo está haciendo el debate de los salarios mínimos hoy en México. El hecho es que el salario es un importante concepto de la economía a nivel personal y nacional pues éste determina el nivel de vida que llevan las personas y sociedades en general. Mi interés se despertó después de escuchar una opinión sobre cómo el alto nivel de vida alemán y suizo es resultado sus sistemas laborales flexibles, los cuales no cuentan con un salario mínimos.

Mi escaso conocimiento sobre este tema, me motivó a investigar algunos estudios relacionados con el impacto de los cambios del salario mínimo en diversos aspectos económicos. Con esto no pretendo ni mucho menos dar una opinión experta ni llegar a una conclusión categórica sobre el asunto, simplemente pretendo exponer puntos que lleven a opiniones mejor argumentadas sobre este tema.

Lo primero que encontré sobre los salarios mínimos fue que esta variable económica tiene un impacto en diversos indicadores de la economía. Los estudios empíricos del tema se centran en los impactos del salario mínimo en el empleo, la desigualdad de ingresos, la inflación y en los diferentes impactos entre trabajadores calificados y no calificados. Sorprendentemente, también encontré que el salario mínimo no tiene impacto sobre los mismos conceptos mencionados. Es decir, resultados empíricos muestran resultados inconclusos sobre el tema. Vaya dilema!

El análisis económico convencional dice que el aumento en los pisos salariales tiene como consecuencia dos efectos: el efecto de substitución y el efecto escala. Específicamente, cuando los salarios se incrementan, el costo para los empleadores para producir se eleva, lo que provoca que los empleadores suban el precio de los bienes y servicios que ofrecen. Este impacto inflacionario desincentiva el consumo de productos por parte de los consumidores, provocando un menor nivel de producción y en definitiva el despido de trabajadores dado este nivel menor de producción (efecto escala).

Por otra parte, el incremento del piso salarial aumenta el costo de los trabajadores (principalmente los menos calificados) con respecto a otros factores de producción, esto provoca que se reduzca la inversión de mano de obra en el proceso de producción (efecto substitución). Es cierto también que los salarios altos desincentivan la atracción de inversiones en sectores altamente productivos de la economía. Estas ideas están ligadas a la teoría sobre el crecimiento económico, el cual establece que los aumentos del nivel de productividad de los países son el camino más adecuado para alcanzar un crecimiento económico sostenido. Sin embargo, los aumentos en la productividad se explican por cambios tecnológicos o aumento en los niveles de educación y entrenamiento de los trabajadores. Factores que requieren planeación estratégica de largo plazo.

Entonces es sencillo. No se debe aumentar ni disminuir el salario mínimo, pues la economía de mercado determinará el nivel óptimo requerido de mano de obra en el proceso de producción y el salario óptimo. Simple no?

Por otra parte, existe la visión de que el problema en este razonamiento es que los supuestos de este modelo económico no se ajusta a la realidad de los mercados laborales. Mucho menos a las realidades de los mercados laborales en países en vías de desarrollo como los países latinoamericanos. Estudios destacan distorsiones como: la diferencia entre el nivel habilidades entre los trabajadores, mercados no perfectamente competitivos y la economía informal en mercados latinoamericanos.

En Latino América, los trabajadores menos calificados son lo que perciben ingresos cercanos o iguales al salario mínimo y también son los trabajadores con menos ingresos. Si existe un cambio en el nivel del salario mínimo, los ingresos de estos trabajadores son los que mayores cambios muestran en relación a otros segmentos de la población. Al respecto, una investigación del Banco Mundial y la Universidad de Bogotá encontró que los ingresos en salarios tienen un impacto positivo en la redistribución de los ingresos en las sociedades. Igualmente, la Universidad de Illinois encontró que en Honduras los efectos redistributivos del ingreso se ven afectados cuando los salarios de los trabajadores con salarios cerca la salario mínimo aumentan. Si consideramos que cerca del 10% al 30%[1] de los trabajadores asalariados en Latinoamérica tienen ingresos cerca al salario mínimo, podemos ver que los cambios en los salarios mínimos tienen un gran impacto en los mercados laborales en regiones latinoamericanas.

En el caso de los trabajadores informales, quienes de principio podría pensarse no tienen un salario formalmente establecido, los estudios muestran que el salario mínimo es un indicador representativo de los ingresos que reciben esta parte del mercado laboral. Añaden los estudios, que los aumentos en el salario mínimo muestran un efecto “faro” (indirecto) en los cambios en los niveles de ingreso de los trabajadores informales. Argumento que resulta relevante cuando consideramos que un importante sector de los trabajadores en México es informal.

La redistribución de los ingresos de los sectores más pobres de la población tiene un impacto lógicamente en el nivel de desigualdad de las sociedades. Si los trabajadores que tienen menores ingresos ven aumentado en su nivel ingresos, la brecha en ingresos entre los percentiles mas altos y los mas bajos se reduce sustancialmente. Investigadores de la London School of Economics en su estudio sobre el salario real de México entre 1980 y 2004 encuentran que la degradación en términos reales del salario en México ha contribuido al aumento de la desigualdad entre los estratos de la sociedad.

Sin embargo, los autores de estos estudios advierten que estos resultados no indican que el salario mínimo debe ser utilizado como una herramienta efectiva para atacar la pobreza, dado los impactos en el nivel de desempleo e inflación que se mencionaron anteriormente.

En conclusión, los cambios salarios mínimos tiene aspectos importantes que considerar cuando se toma la decisión de aumentarlos o disminuirlos. Como mencioné mi intención no es llegar a una conclusión sobre el tema, sino exponer parte de los argumentos que se están analizando en una decisión de política económica como ésta. Al final cada uno puede tomar las conclusiones que considere pero es siempre es bueno conocer algunos aspectos relevantes.

[1] En el caso específico de México, un cálculo dado por el experto de la CEPAL indicó que el 40% de los trabajadores en México tienen un ingreso cercano al nivel del salario mínimo.

Cultures

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Just as I mentioned before Tokyo is a amazing city because of many facts. Cuisine, temples, technology are mixed in a very well planned urban area. However, I consider that in top of all these factors, there one thing that defines how extraordinary is Tokyo and that is its people.

I remember I read from George Friedman last summer, that societies, just the same way as human beings, have their own behaviors. These behaviors are shaped by several factors such as: aging of the population, history of the societies, current events, economical factors, etc. Moreover, Friedman states that the United States is still a very young society, you can say a teenager. Just the same way a as teenager can be kind of adventurous, vital, paranoid, and a little bit maniac, the US society is also shaped by these behaviors.

On the other side, I find the Japanese society, that seems to be an ancient society. Ancient societies should be related to ancient qualities. For example Wisdom, patience, serenity, with a little degree of skepticism. Personally I think I find some of those behaviors in Japanese society. For example: I appreciate the quality of being patient and moderate embedded in the behavior of the Japanese culture.

There are a lot of examples of this: from the size of portions in their meals to the planning of all the transportation system, which is perfect. Also their water and electricity systems are designed to be very efficient. Additionally Japanese society seems to be very aware of ways for live in sustainable ways. As a conclusion patience and moderation are the qualities that impress me the most about Japanese.

So, I this theory is right, there are some questions in my mind and one conclusion that come to my mind. First, the questions: Is the mexican society a child society? If so, which behaviors, as mexicans we have? How being a child society, defines how our society behaves? Second, the conclusion is that I wish that some behaviors of the Japanese society could be learned by the American society and the mexican society. At the same time, there are some behaviors from the american society and the mexican society that I wish I could find in the Japanese society. Im a way I will be happy to have more Japan in the world, but also more world in Japan. (Wait a minute this sounds familiar to me.. hahah)

The confidence of the American society is remarkable, its entrepreneur mentality, allows them to become with the best innovations, that later are used by all the globe. Mexican culture by its side, believes in the family as the elemental organization of society, mexican society will look for the way to solve its owns problems with the resources available, even it these resource are limited. You can identified a mexican miles away, because in general he will be try to start a conversation with the person standing aside. Doesn’t matter if the conversation is so irrelevant, such as the conversation about the weather.

I dont know is this perception is correct or if it is just a cliche… anyway i still believe that a person is victim of his circumstances. In this sense Im glad to have multicultural circumstances, I believe that this will be enhance my capacity of understand other ways of thinking and will allowe me to increase my framework of personal abilities to be more critic. Isn’t that what is Fletcher all about?

After these thoughts some pics that is the attractive part of my blog jajajaja.

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Japaneses friends

I have always believed that Japan is a beautiful nation, because of its ancenstral culture, its delicious food, and its great sense of community. However, I think that my high afinity with the Japanese culture is a result of the great friendships I have made with Japanese people. Im very glad that this trip to Japan offered me the opportunity to meet with my dear Japanese friends.

Yukiho Nonaka was my first Japanese friend. We meet each other almost 10 years ago, while she was studying Spanish and she working as a volunteer in Mexico. By the time I met Yukiho, she was a kindergarden teacher in the mornings and all nigth-party DJ. Nowadays Yukiho works in the aromatherapy business, eventhough, she is still worring about social issues (she gives aromatherapy to senior people) and still party like a rock star! :D I’m glad I could meet her again and I looking forward to meeting her husband and family in the next weeks.  

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We went to Kanda area to have dinner and of course to have some drinks. I loved the restaurant because it was very traditional.

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I met my friend Jo in Fletcher. Jo is a master student in International Business at Fletcher. Currently he is doing a double internship in Japan, one in a healthcare company and he will start his other internship at July in a financial company. BTW, Jo is a great fan of Fletcher’s Professor Jaques! We went to have dinner also in the area of Kanda, there I finally had the opportunity of knowing his girlfriend Marika. I’m sure that Jo and I are going to do many different plans in Tokyo during our internships.

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Naomi is a 2011 fletcher alumni. She is a very good friend of Alejandra and now a very good friend of mine. Naomi speaks English and Spanish perfectly, which its a great relief from my difficult mission of understanding Japanese. Naomi knows Mexico very well, she has been in Mexico city, Guanajuato and i think the Riviera Maya. She understands what is to eat a real taco and how exciting is to visit the Zocalo in sunny Sunday. She works for a well-known technology company in Japan, which by the way is a very important competitor of Hitachi :S Lol. Naomi invited me to visit Kamakura with her and two friends (Kanako and Weny).Image

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We went to a several temples, to have a delicious dinner, to the beach, to have some drinks and finally to a very nice Korean restaurant. I really had a magnificent time with Naomi and her friends and I hope we can have more opportunities to hang out and to practice my Japanese.

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I meet my friend Yumiko last year at Fletcher. We were classmates in Econometrics and we also were group partners in this course. Yumiko also can speaks perfectly English and Spanish. I was so happy, when Yumiko told me she studied in Cuernavaca. When I arrived to Boston I never imagine to know someone in Boston that knows Cuernavaca. Yumiko just finished her master program at Fletcher last may. Now she is looking for a job, although she already had several offers, she is still waiting to take the right choice.

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We went to visit Shibuya district, where we had dinner, we walked and we visited a temple. I loved to catch-up with Yumiko.. Although, we spend almost a semester working together, we never had the opportunity to talking a lot. This time was the perfect occasion. Yumiko’s birthday is coming the next week so I believe we will have the opportunity to meet us again.

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Finally last Friday i meet Yamano-San, Daisuke-San and Rachel-San. Yamano-San is a Fletcher 1994 alumni, he works for the international division at Hitachi and he kindly organized a dinner with Daisuke-San (Fletcher 2011) and Rachel-San (Fletcher 2011). Daisuke and Rachel met each other back in Fletcher. He works at a Japanese law firm and Rachel works in the Mexican consulate. Image

We had a great dinner in a Spanish restaurant. The night was perfect because the music, the food but more importantly because of the amazing fletcher stories that we share during the dinner. So far I have met some of my Japanese friends but still there are some of them missing I hope I can meet them soon.

Nipon working machine.

My office is in the 21st floor in the UDX building in Akihabara.
In the office we are around 57 persons, I will say that the average of ages in the office could easly be 34 or 35 years old (it is a very young office)
The work is divided in several business units, each of ones,with topics that range from economical analysis to live and living research. Im part of the
Technology Research group.

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My analysis is focusing in the analysis fo the global dynamics of competitiveness and how these affects industrial sectors such as manufacturing. So far my
research has been focused in issues related to American competitiveness and I am eager to extend that to a deep analysis on the Mexican competitiveness.

Also, I was exicted when I realized that the main philosophy of Hitachi is to build products to create smart cities. Of course, I know that many of my
experience here will be appropiate for my thesis topic, which is related to smart cities that can promote innovative societies.

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In other aspects, people in the office offered me a very kindly welcome. I had a entire round of meetings with all the business groups, in which I had the opportunity of
knowing everyone’s projects and more importantly I could know a little bit more about their personal interest and passions. Just as I expected, Japanese
pleople are amazing host and very professional in their day a day treatment.

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I am really loving the opportunity of learning this great culture through its people. I have always believe that if you want to learn how other societies think
you have to have great conversations with them. So far my main objective is to get to know as many Japanese persons during this intership, share great and
deep conversations and have really good meals.

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Sometimes while working in a think thank, I remember me my time in Promexico. Moreover, through me colleagues here, sometimes I remember La UIN (Unidad de Inteligencia
de Negocios). Thanks to this experience I have recoignaize many areas of improvement that the UIN could implement but more importantly I have also identified
many streghtens that the UIN has and that I will love to teach to my co-workers here.

私の家 (mi casa)

As I mentioned before my apartment is located at Akihabara zone. My apartment is in the 12th floor from where I have a beautiful view. Image

 

 

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The apartment is approximately 50 mts2, but it has all the appliances needed to live. It has a little fridge and kitchen, washing machine, fax, t.v. and the famous intelligent toilet.

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Yesterday, for the first time I use the kitchen to cook some food. In order to get use to the culture, I cooked some rice with beef and egg. 

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Anyway the bathroom is a little different from the american type of bathroom. Everything seems to be in small portions, even the size of the shower. 

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For those not familiar with the intelligent toilet, let me explain you what is so special with it.  The system of the intelligent toilet is based on the idea that the best way to clean your butt is by using water. So the toilet has a small hose that spray pressure water.

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The bedroom is the half of the apartment and it has a little desk with all the appliances needed to study. I thank god also that the apartment has A/C, because the weather has been getting warmer in the last days. 

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 In terms of location my apartment is about 15 minutes from the Hitachi office, which is super cool, considering that for most of the people in Tokyo this trip is in average 1 hour by train.  

In conclusion I really feel very fortunate of having a good place to stay, for the next couple months this place is going to be my home. A place in which, I will try to follow the tons of dreams I have in my mind, where I will put all my effort to do this experience one of my best in my live and a place in where I will be always remember my love ones;  My Chinita linda!

Tokyo style

Woa! That’s what came to my mind the first time I saw Tokyo. Narita Airport, where I arrived, is Airport located at the Chiba prefecture, that is around 40 min away from Tokyo. While I was in my way to Tokyo Station where I was suppose to meet my co-workers from Hitachi, I saw the industrial part of Tokyo, which is located next to the atlantic sea. It was an amazing welcome from Japan, the sunset made the sky look so clear and kind of reddish. 

Then after 45 min I finally arrived to Tokyo station, there I had to wait like and hour for my co-workers, thus I decided to make a little round in the station. My first impressions in the station were 1) Tokyo station seems to be a very energetic place with a lot of young people 2) Everybody seems to be in a rush, I taught that time in Tokyo must pass very quick just like in Mexico City.

At 8:00pm I met my HRI co-workers, Shikano san and Sumi san. They took to my apartment (which i will write about in another post) and later we when to have dinner at a restaurant in the Akihabara area. Shikano San is a 32 years old Japanese, Shikano’s passions seems to be latina girls and automobiles. He seems to love his car very much. Also Shikano has a deep passion in photography, he actually has amazing pictures in his cellphone. On the other hand, Sumi San is a 27 years old girl from Japan. She studied Spanish as a major in Japan (although she waited to the last moment of our day to tell that she speaks spanish). Also Sumi has a perfect english because she was working at Hitachi in New Jersey. 

The restaurant at Akihabara was a traditional dinner in Japan. The Japanese restaurant use to serve a lot of type of dishes but in a small portions, so you can eat a lot of type of food in a same meal. Of course you can have beer but also you can drink the traditional chochu, which is a type of whiskey.  

Finally, I went back to my place. While walking back to my place, I walk a very particular area of Akihabara, in where you can find electronic shops and manga shops. The area is full of light, music, extravagance outfits and costumes. So far that was my first night at Tokyo.ImageImageImage