Do Mexicans Work Less Hard in Mexico, or Don’t They?
A reader named LLP sent an e-mail early yesterday morning with an interesting question:
I was reading this article regarding California farmers moving their operations to Mexico. The following quote struck me, and I’m trying to find an explanation for the difference in productivity:
“Scaroni expects [to] recover his start-up costs because of the lower wages he pays farm workers here, $11 a day as opposed to about $9 an hour in California, although Mexican workers are less productive in their own country, he said.”
LLP wanted to know why there would be such a difference in productivity between Mexicans working in Mexico and Mexicans working in California (assuming, of course, that the farmer named Scaroni was making an accurate observation).
Shortly after receiving LLP’s e-mail, I saw the article he was referring to in the New York Times, by Julia Preston, and I began to read it. Strangely enough, I couldn’t find the line about Mexican productivity. Instead, here’s what I read:
“I have a customer base that demands we produce and deliver product every day,” [Scaroni] said. “They don’t want to hear the excuses.” He acknowledges that wages are much lower in Mexico; he pays $11 a day here as opposed to about $9 an hour in California. But without legal workers in California, he said, “I have no choice but to offshore my operation.”
Hmm. Had LLP misquoted the article? That didn’t seem likely, since it looked like he had simply cut and pasted. Was he engaging in a little low-grade subterfuge, putting a fake quote in a real article to try to stir up some kind of trouble? That didn’t seem likely either; we’ve heard from LLP quite a few times, and he’d always been a straight shooter.
So I followed the link that LLP had sent with his e-mail. It was the same article, by Julia Preston, but from the Times-owned International Herald Tribune, which typically runs a lot of Times copy in its pages. And there, as LLP had written, was the interesting passage in question:
Transferring to Mexico has been costly, [Scaroni] said. Since the greens he cuts here go to bagged salads in supermarkets, he rigidly follows the same food safety practices as California. Scaroni expects [to] recover his start-up costs because of the lower wages he pays farm workers here, $11 a day as opposed to about $9 an hour in California, although Mexican workers are less productive in their own country, he said.
For whatever reason, Scaroni’s observation about Mexican productivity made it into the IHT but not the Times. So if you read the article in the Times, you missed out on what LLP — and, FWIW, I — thought was perhaps the most interesting point in a thoroughly interesting article.
As for LLP’s original question: why such a differential in Mexicans’ productivity in Mexico versus California? He asked if perhaps it’s because there is less pressure to earn in Mexico. That seems sensible. Not only is the cost of living much more expensive in California, but there are additional incentives for a Mexican worker there — to save money to bring additional family members to the U.S., for example.
But also, that is a pretty huge wage that Scaroni describes: $11 per day in Mexico versus $9 per hour in the U.S. The experimental economist John List at the University of Chicago has done research showing that people who get paid more indeed work harder. But in this case, I am guessing we’re looking at a huge selection issue: the workers who are willing to go to the U.S. for that higher wage are a lot more motivated than the ones who don’t. So it makes sense that they are the harder workers. And the workers who stay behind in Mexico are the ones who … well, they’re the ones who stay behind.