Down Mexico way
All the guys and dames
Who work real hard
Keep most of their take home pay
And as my economic spidey senses tingle
My thoughts ever stray
South of the border
Down Mexico way.
Also, it reminds me of this post on long term unemployment as Mexico and South Korea also at the bottom of the charts there.
I would have done "South of the Border, Down South Korea's Way" but it just doesn't have the same ring to it.
The Mexican government counts anyone who works as little as one hour per week as "employed", hence the low unemployment rate.
ReplyDeleteMost wages and retail sales in Latin America are
"off the books", so governments make little effort to tax them. Instead they tax at the top, selling monopoly licenses to the wealthy and well-connected.
So the worker keeps more of his income, but is forced to spend it on overpriced, poor-quality goods and services.
Americans who've worked in Mexico say that almost everything costs more south of the border.
I'm thinking the reason why Mexican taxation is so low is that wages are kind of low to begin with and they don't provide much in the way of social benefits, compared with, for example, Europe. It's a developing nation. However, I am perplexed with South Korea that isn't, anymore, a developing nation. Its GDP per capita compares with the lower end of EU countries. Any ideas?
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