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Ermo’s Television — Consumerism and Remittances

10 May 2007

In the course of cinematic history, there have been many great quests: searches for the Holy Grail, the Ark of the Covenant, the true nature of Humankind, the essence of God, and, during this film from Chinese director Zhou Xiaowen, a 29-inch television. In Ermo… we follow the obsessive struggle of one woman (Alia) to earn the money to buy the biggest television in her village.

From a College of Wooster (Massachusetts) Chinese Course Description

Ermo is no different than a lot of poor and ambitious campesinas. As the plot summary says:

The independent Ermo supports her son and disabled husband, rising early to make noodles she sells as a street vendor. A snooty neighbor has a TV, so Ermo wants a huge one.

She takes a job in the city, has an affair, sells blood and eventually, she and her elderly impotent husband end up with a TV too big for their house.. and a living room full of neighbors trying to make sense of American football. A cautionary tale perhaps, but is there anything strange about the quest for consumer goods… or a better life? And, Ermo’s justification is that she wants the best for her son who spends way too much time at the neighbor’s watching cartoons.

Wait a minute. What does a Chinese movie have to do with the MexFiles?

Not much other than it’s a great movie I first saw on Mexican television and it has everything to do with remittances. Ermo has a lot of Mexican sisters, who come from Chiapas or Veracruz or Oaxaca to sell their goods in the streets. Perhaps they’re just planning to buy a television (or a computer — TVs having reached even the remotest parts of Mexico long ago), or perhaps she has other goals in mind.

Ermo was not poor in her own village, and the ladies who come to the city to sell a little of everything, aren’t necessarily either. And Mexico is a wealthier country than China. But people are people, and they want better lives… and better stuff.

As Oscar Lewis noticed with Mexico City’s working class in the 1950s and 60s, many country dwellers stay, seeing the benefits of urban life. There’s nothing new in that. When the obsessively curious Lewis began his studies just after World War II, he could sort the wealth of families in given vecinidades by who owned a wrist-watch and who had THE radio in the complex. By the end, he’d stopped counting watches and radios and started counting TVs. Today he’d be counting I-pods, but not cell phones.

I lived for a several months in a cuarto ambulado (rooming house) where the big excitement on my floor was the day one of my neighbors got his own giant TV… and, like Ermo’s, it was too big to fit comfortably in his cramped living space (though — unlike Ermo’s neighbors — we didn’t watch foreign sports. We watched futbol and luche libre).

Ermo herself worked for her TV, but would her desires have been much different if her brother, or husband was working abroad and sending her money? She might still want to buy a TV. The grumps at the International Monetary Fund try arguing that remittances are a “moral hazard” for the recipient, which seems to mean they’ll be tempted to buy a big TV, but who are international bankers to lecture others on morals?

There’s some indication that remittances are a mixed blessing for rural economies. The folks who have them can invest in goods (like Ermo’s 29-inch color TV), but it raises prices for folks who don’t receive remittances. Much of the early criticism of remittances in the U.S. media took the form of collective head-shaking over new pickup trucks and satellite dishes in rural areas. “Why didn’t those people spend their money on schools or better houses?”

They did, but people — poor or otherwise — don’t always make the best consumer choices, and, besides, it could be argued that new trucks meant better transportation, and a satellite dish meant better educational opportunities. Remittance money is invested in the local community, and — according to most studies — at least doubles in value (My brother sends home a thousand dollars, and I buy bricks to build an addition on the house and hire local laborers. The laborers and the brick makers buy groceries and their own TVs. The grocer…and appliance store…).

As I’ve noted before, and as “credible” sources like the Inter-American Development Bank’s Manuel Orozco (“Worker Remittances in an International Scope” 1993, PDF file)

The benefits of migration are significant for both sending and receiving countries. Remittances are one important benefit for immigrant-sending countries.

Although there is no direct relationship between remittances and human development, they have an important impact on the economies of receiving countries. Migration and remittances do not necessarily relate to the level of development in a country (not only the poor migrate, nor is migration only from poorer to wealthier countries). Countries receiving remittances come from low, medium and even high human development
cohorts. The connection of remittances to development is related rather to a) the receiving country’s regional economic position and its relationship to a more economically salient country and b) the macroeconomic impact remittances have on the receiving country.

In other words, even a “middle income country” like Mexico benefits from remittances. The U.S. enjoys two benefits — by leaving the country, the money is effectively “banked,” and the “interest” comes back indirectly through Mexican purchases that benefit the U.S. (something I don’t pretend to comprehend), but the U.S. gains lower cost labor at home, and consumers who, being elsewhere, are at no cost (or low cost) to the seller (in other words, grand-dad back in Zacatecas buys his satellite dish from WalMex. And it’s not U.S. taxpayers financing the road that grand-dad drives down to the store, nor your local power plant that is providing the electricity, nor your local hospital that picks up the tab for the uninsured WalMart worker who falls off a ladder getting the dish out of the stock room).

More importantly, remittances aren’t only spent on consumer goods, though sometimes in themselves, they improve people’s lives. A refrigerator means better food — and presumably better health. A computer is … one hopes… educational. Bricks provide jobs for brickmakers and masons. Indoor plumbing benefits a family’s overall health. And remittance funding provides for education, or the chance for higher education.

Better educated, healthier people will earn more and have fewer — and healthier, better educated — children. A win-win-win for remittances.

One of the stupider anti-immigration measures you hear from time to time is a tax on remittances. While there are some costs to immigration, remittances seem to be a benefit. It certainly is for Western Union, which recongizes that remittance investments in Mexico are in their own best interests:

ENGLEWOOD, Colo.–(BUSINESS WIRE)–The Western Union Company (NYSE:WU), a worldwide leader in money transfer services, is expanding its ties to Mexico, meeting with government officials who play a vital role in Mexico’s remittance industry and economic development.

Later this month, company officials will participate in high-level discussions in Mexico City on corporate initiatives and social responsibility. During these meetings, Western Union representatives also plan to announce the expansion of the 4+1 program, an economic and social development initiative in conjunction with Mexican Home Town Associations in the United States (HTAs) and the federal, state and municipal governments in Mexico.

…“Western Union has committed more than a million dollars to the 4+1 program, matching the contributions the HTAs and the three Mexican government levels have provided to support much-needed initiatives in key states in Mexico affected by high levels of poverty and migration. We will continue to set the industry standard, not only for products and services, but for social responsibility and good corporate citizenship.”

Earlier this year and during the initial stages of the program, Western Union helped fund eight projects in communities throughout the State of Zacatecas. These projects included an eco-tourism park, fruit and vegetable processing, nopal farming, agribusiness equipment, a pork farm and a computer assembly plant. In all, Western Union will contribute $1.25 million to these and other projects in five states. During an upcoming trip to Mexico, the company will announce the expansion of the program to the State of Mexico.

It’s a secondary, unexpected benefit. Immigrants are creating their own foreign aid programs. And if some campesino’s kid watches too much TV, so be it.

More than you’d ever want to read about remittances as microfinancing

Speaking of remittances — and added value –we depend on them for essentials like the phone, rent, electricity — to provide you the direct and indirect benefits of reading the Mex Files.

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