Shopping Invaders
Symptom of Mexico’s Problem
By D.W.

In every big shopping season, the upscale malls and expensive retail outlets in my hometown of San Antonio Texas and in the surrounding areas are flooded with wealthy shoppers from Mexico who come here to spend lots of money. San Antonio merchants report that the Mexicans are more difficult to deal with than local customers but they do spend plenty of money and they do make a big impact on the local economy. And this is a phenomenon that is also evident in certain cities of other border states.

To attract these well heeled shoppers, upscale retailers in the United States routinely advertise in Mexico City’s ritzy areas and in magazines for the well-to-do.

But why do these affluent Mexicans travel a thousand miles and stay at expensive hotels just to shop?

The answer is rather startling but it is because American stores are cheaper!

Now that revelation was a shocker to me. How can American department stores and retail shops still be cheaper than Mexican stores? Isn’t Mexico a third world country, so shouldn’t merchandise be priced a lot cheaper over there?
 

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In fact, plenty of Americans already travel to Mexico to find bargains at cut rate prices and to enjoy low cost beach resorts. And many Americans also like to buy inexpensive jewelry and pharmaceuticals in Mexico, so why aren’t clothes and other products easier to obtain and produce?

Interestingly, rich Mexican shoppers cite lack of choice and expensive prices in Mexico’s upscale retail sector as the main reason that they choose to come to shop in the U.S.

On the surface, this doesn’t seem to be such a difficult problem to overcome.

Couldn’t some enterprising Mexican entrepreneur build a shopping center or two that offers elite Mexican shoppers the range of choices that are available in the United States? Wouldn’t competition from other entrepreneurs eventually bring the prices down? And since the operating cost, especially with cheap labor, is a lot lower in Mexico than in the U.S., why isn’t such entrepreneurship already happening?

Their government should be supportive of such an endeavor to keep Mexican wealth in Mexico and should lower taxes and cut red tape for these entrepreneurs.

Unfortunately, Mexico is also a socialist country burdened with enormous bureaucratic red tape and plenty of corruption so it suffers the same fate as so many other destitute third world nations. In fact, the lack of interest in developing their own country’s retail sector is symptomatic of their attitude about their economy as a whole.

As Americans, we should be concerned with the attitude of Mexico’s elite and how they are running their economy. And more to the point, Mexico’s elites are the ones who are in the best position to change this situation and get the country moving in the right direction. We already have enough problems with the Mexican border right now; imagine if their entire economy collapsed.

But more importantly, Mexico’s failure to develop as a modern nation is our problem to the extent that its problems cross our border.

Columnist Thomas Friedman in his book, The World is Flat, describes how Mexico has managed to squander the golden opportunity presented to it by NAFTA. It has direct land access to the world’s largest economy and plenty of natural resources and cheap labor. By all accounts, Mexico’s economy should have mushroomed and developed into the industrial powerhouse that China is now.

Friedman also describes how the country is now importing statues of the Virgin of Guadalupe, a cultural icon, from China. The kicker is that China ships these through American ports and drives them across the border. This is not just bizarre it is disturbing because it vividly demonstrates that the Mexican economy is failing miserably.

In addition, Harvard economist David S. Landes in his book, The Wealth and Poverty of Nations, demonstrates how a nation’s culture is imperative to its economic development. Some cultures embrace entrepreneurship, innovation, education, and good governance, while others do not.

Are the socialist values that Mexican culture already embraces going to lead to a better Mexico?

So far, the answer has been a resounding no. However, cultures are man made and Mexico’s culture is not fixed in stone so their economic environment can still change.

However, we as a nation can’t just shrug off the problems on the Mexican border as nothing more than a steady source of cheap illegal labor. We are not immune from Mexico’s social problems although we cannot change them. Only Mexicans they can change Mexico and it’s not looking too good for the home team.

We can however reduce our vulnerability to Mexico’s problems by closing the border.

Perhaps all those resourceful, hardworking and risk taking illegal aliens will stay in Mexico and work on reforming their country.

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