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Middle class values — back to school and double parking

24 August 2007

It’s the start of the school year in Mexico City, so time for the annual parents cause traffic snarl story.  El Universal  reports that 107 parents were ticketed for double parking or using reserved handicapped spaces as they dropped their kids off for the day.   This probably reflects a media obsession with the new traffic code (and, unnoticed in the “green referendum” a few weeks ago was support for more public school buses), but it indicates something else going on.  More parents have cars to double-park when they drop the kids off at those private schools all over la Capital. 

A few years ago, I noticed this when a guy who would claim the sun sets in the east if I said it said it set in the west was jabbering on and on about high crime in Mexico City (it was declining at the time, as much for demographic reasons – the Mexican baby boomers are getting too old to make good criminals), citing the growing number of car thefts as one example.  True, but then, there are a lot more cars to be stolen and those that are tend to be older cars without alarms or decent locks (think VW bugs) in poor neighborhoods. 

There’s more of everything available – not just in Mexico, but throughout Latin America == according to the 16 August Economist .   The Economist sees it as a booming “middle class,” but I’m not so sure. 

When Oscar Lewis, back in the 1940s, began his exhausive studies of Mexican families, carefully noted every item in family homes.  Looking at families like the Children of Sanchez and their neighbors, he took note of which families owned forks in the poorest apartment blocks, and who in the working poor neighborhoods owned radios (usually the landlord).  By the late 1950s, Lewis was not counting the family silver, nor paying much attention to radios.  The families that owned a TV sometimes indicated a more entrepreneural  bent than anything else– one of the “Five Families” he studied in the late 50s set up a snack bar in their living room, and rented TV viewing time to the neighbors.   

The Economist is defining “middle class” as having the income to spend on stuff.  I suppose they know more about official definitions than I do, but I don’t think just owning stuff is any sign of anything.  Everybody wants stuff.   

One reason I don’t have a knee-jerk anti-rich guy bias uber-richest guy in the world Carlos Slim is that I don’t see anything weird about people who have a little money to spend wanting to spend it.  It wasn’t rocket science that made Slim rich… it was selling things people with a little money to spend want: cigarettes (Citam), telephones (Telemex, SBC, etc., etc., etc.), internet connections and computers (Prodigy and CompUSA) and other stuff (Sandborns, Sears, etc., etc., etc.).  Slim reconginzed that even poor people want to have things – one reason he supported the Lopez Obradór administration in the Federal District (and helped Lopez Obradór’s Presidential campaign) was his recognition that if the poor had some money to spend, they’d be spending it with him.  And that people with enough to eat can think about buying a computer, or a telephone.     

 I’d expect The Economist to focus just on income, but there are other signs that Mexico (and by extention – or at least statistically – Latin America in general) is wealthier.  People eat more. During the Fox administration (something of a golden age of government propaganda), I was always amused when I’d see back commercials from the Department of Rural Development advertising the free turkey program followed by Secretaria de Salud anti-obesity commercials. The turkeys, in case you were wondering, were live – since the 1950s, the government (then, the PRI) was giving away turkeys, and the commericals were extolling the Fox administration for making it non-partisan.  The idea was to provide a small flock to provide more protein (eggs and an occasional turkey dinner) in the campo.   In a Tabasco ejital one time, I posters on a community center bulletin board advertising goth the subsidized food program and a weekly meeting of Weight Watchers.  I assume the Weight Watchers attendees were eating more than a few turkey eggs a week.   

The problem I had with The Economist were the twin suggestions that being able to purchase telephones or jeans or dog food somehow made you “middle class” and that all this was somehow due to “free markets”.  Consumer spending is also skyrocketing in the Bolivarian Republic of Venezuela.  The Economist, given its biases, also defines “middle class” based on consumer spending and income.   

My point is that owning stuff – or being able to buy stuff — isn’t the same as “middle class” in Latin America, or elsewhere.  The “middle class,” to my thinking anyway, are the people who invest in their future (like the family going into debt to buy a TV, but turning it into a small profit center), think in terms of community (think of the shopkeepers who know everyone who belongs on their street – and who clean the sidewalk every morning) and see the value in education for its own sake.  As the Economist’s countryman, George Orwell made clear, “middle class” doesn’t have anything to do with the ability to spend.  Orwell talked about the English “lower upper middle class” of depression England – clergymen, retired officers on inadequate military pensions, and others who might have the values – and aesthetic tastes – of the upper middle class, but not the purchasing power.   

In the anti-class conscious U.S., we label almost everyone “middle class,” but – as the Economist does – use consumer goods as the marker.  Nearly everyone in the U.S. can afford a telephone, and a computer and televisions and cars.  So, by U.S. thinking, everyone is middle class. 

Not so in Europe and Latin America, where values and esthetic choices have more to do with one’s class.  In Mexico, nacos – the lower class – are not necessarily poor.  “Rich Nacos” are almost hip – or rather the naco style is hip.  But values like education, thrift, propriety, and a desire to avoid social conflict, are  not naco values.   Managers, doctors, engineers, professors, civil servants – the traditional Mexican middle class – is often more like Orwell’s “lower upper middle=class” than otherwise.  I knew a lawyer who made ends meet selling tacos at night (his wife, a psychologist, sold baby clothing), and I’ve talked about the TV cameraman/reporter who drives a cab.  The Economist did note that some street vendors earn more than some university graduates – but that’s true in the U.S. as well.  Ask anyone with a humanities degree.  Some of us have Masters’ degrees and drive trucks.     

Street vendors are entrepreneural, earn a decent living (and work hard for it), and – one hopes – are investing in their kids futures.  Which is what makes this story, published last Sunday by the AP, so noteworthy.  We have two visions of entrepreneurship, and of citizenship, at odds here.  We just can’t fit this into our nice little divisions of “class”:  

Mexico tries to reform its street economics, collect more taxes


Sunday, August 19, 2007  

MEXICO CITY: Tens of thousands of vendors sell everything from school supplies to pirated pornography videos on the teeming streets radiating from Mexico City’s main plaza, the Zocalo.

Mexico City‘s leftist mayor, working from a building all but engulfed by the makeshift market, is now seeking to move the vendors from the capital’s historic downtown by Oct. 12 and free up streets lined with colonial treasures ranging from cathedrals to museums.

If Mayor Marcelo Ebrard succeeds in his plan to relocate the vendors to government-subsidized properties nearby, he will have done what many other administrations have failed to do. Attempts in other neighborhoods have sparked all-out street battles with police.

Removing the vendors is one of the few issues the capital’s leftist government has in common with President Felipe Calderon’s conservative administration, which views them as tax evaders it wants to reel into the formal workplace.

But relocating them promises to be difficult.The vendors are represented by large and occasionally violent unions, and are campaigning against the relocation plan. They argue that the designated properties offered by the city will fail to attract customers and have asked for the deadline to be extended until Jan. 7.

“The people can’t support themselves on some property if there are no sales,” said Alejandra Barrios, president of a high-profile vendors union recently at a conference of city and business leaders. “And the new areas need to develop a reputation, and that takes time.”

“We have to defend ourselves somehow, and Marcelo (Ebrard) has to understand that.”

The Mexico City Chamber of Commerce estimates there are 35,000 vendors in the downtown area.

Vendors say they can often make more money selling in street stalls than they can earn with jobs in the formal sector, where the minimum wage is just US$5 (€3.70) a day.

Ebrard says he does not want to use force to meet his goal of eradicating the huge market, and he is trying to negotiate a deal with business leaders and vendors. But the market provides thousands of jobs for the vendors, who pay no taxes and receive few social services.

Previous eviction plans have only succeeded briefly, as vendors promptly swarmed back to the downtown area after relocation sites proved fruitless.The city’s campaign comes as Calderon, as well, grapples with an underground economy that the World Bank estimates employs as much as 60 percent of Mexico’s work force and equals nearly 30 percent of the country’s gross domestic product.“The country can not prosper on a base of illegality, and the greater the illegal economy, the more society will suffer and fall victim to crime,” Calderon said recently.

So far, Calderon says his government has created 500,000 new jobs and has set aside US$300 million (€222 million) to cover the social security for first-time job holders for one year, an effort to encourage people to join the formal work force. He has called on his Cabinet to encourage small and medium businesses.Mexico’s notoriously low tax revenues are part of the reason that its social protection programs are too weak to discourage informal labor, said Bill Maloney, chief economist for Latin America and the Caribbean at the World Bank.

Poor workers often drift in and out of the formal job market, sometimes earning more selling designer sneakers on the street than working as an accountant.

“This is a status rise, going from being a salaried employee somewhere to being informal, self-employed,” Maloney said.

Victor Gutierrez, a 48-year-old father of two who is blind, said he began selling goods in the streets after the 1994 peso devaluation.“In a company, unfortunately, it’s rare for them to pay even a little bit more than the minimum wage,” he said.

Gutierrez said he made about US$3 (€2.20) a day working at the textile plant. Now, he can earn as much as $20 (€15) a day selling board games and beauty products on the street.But Gutierrez said if the city government moves him to a government-sanctioned location, business will likely suffer since his stand will no longer be in the line of daily foot traffic.Many vendors, he added, will then simply join the millions of Mexicans who have migrated illegally to the United States in search of work. 

 

In a nutshell, this is the problem we have we think about Mexico.  We expect things to be different, and when they are (like the informal economy) begin with the assumption that it’s bad, even though the results – what the Economist calls “middle class” are good. 

2 Comments leave one →
  1. 2 September 2007 6:28 am

    Several things jump out from your latest offering, Rich.

    But firstly, old Georgie-boy Orwell – aka Eric Blair, privately educated son of wealthy, colonial administrator parents – had his tongue in his cheek just a little bit when he described himself as ‘lower upper-middle class’. Class was one of his literary obsessions as he could never reconcile the lower-class poverty he saw around him with his own privileged background.

    Now, the whole thrust of the effort in DF to ‘regularize’ the street traders around the Zocalo is mirrored in Calderon’s current effort at having the Ley de Hacienda restructured. The street traders of DF pay no taxes – which, when they were employed at minimum wage or close to it, their employers may have done – nor do they pay IMSS or contribute to the cost of the maintenance of the civic infrastructure in DF.

    At federal level, there are moves afoot to levy a flat tax on all small businesses (to counter tax dodging) but how this will have any bearing on the relatively informal economy of the Zocalo ‘ambulantes’ is anyone’s guess.

    As Allan Wall said in a recent article on Mexidata, the entrepreunerial spirit is all very well but it’s rather like subsistence farming – it only supports you and yours and adds nothing to the commonweal.

  2. 11 December 2007 3:03 pm

    I would have to agree with him on that one.

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