Commitment

From time to time, I am surprised by the source of my own questions. This morning, for example, I asked (through Google) how Mexican per capita household annual income compares to that figure in the United States. I would not have had that question but for stumbling across something mostly unrelated; an article that asserted (or was it just suggested?) micro-businesses account for the primary source of income for large proportions of family incomes in impoverished countries. The article implied that “jobs” are few and far between in many countries and, therefore, people create or maintain their own tiny businesses to provide at least meager sources of income.

Before I go on, I wasn’t surprised by the facts and suggestions and assertions; I was surprised that they became sources for some questions I did not have when I awoke this morning.

At any rate, the article and my subsequent question led me to the website for an organization (a company, I assume) called CEIC. CEIC was founded in 1992 in Hong Kong by “a team of expert economists and analysts.” CEIC is a research organization that collects and analyzes macro-economic data from countries around the world. Some of those data and those analyses are available on the organization’s website; more data and more in-depth analyses, I suspect, are available for sale. But that’s an entirely different topic, so I’ll return to my area of interest.

According to data available on the CEIC website, the  per capital annual household income in the United States was $31,454 in 2018. In Mexico, the figure for the same year was $2,782.32. So, the per capita household annual income in the U.S. was more than eleven times greater than in Mexico last year. I knew the difference would be significant, but the size of the difference stunned me.

If my income were reduced to one-eleventh of what it is today, I would either starve or go on public assistance or both. “But the cost of living in Mexico is much less than it is in the U.S., so it wouldn’t be that bad,” some might say.

Sure. Housing in Mexico does not cost one-eleventh the price of housing in the U.S. Nor is the cost of transportation or food in Mexico equal to that fraction of the cost in the U.S. The bottom line is that the economic lives of the Mexican people at large are radically different from the economic lives of Americans. An article in Borgen Magazine discusses food poverty in Mexico, reporting: “In 2008, 18.2 percent of Mexican residents lived in food poverty. Food poverty is defined as not earning sufficient income to purchase nutritious food, even if the total income is used.” The U.S. Department of Agriculture Economic Research Service reports on its website that 11.1% of Americans lived in “food-insecure households” in 2018. Granted, the data are separated by ten years and by definitions that may not completely correspond to one another, but they offer some interesting (and painful) insights.

I was surprised that the percentage of people who live in “food-insecurity” (I’ll adopt the USDA term) in the U.S. is not even double the percentage in Mexico. Given the enormous income disparity, I would have thought Mexican food-insecurity would be many times greater that American food-insecurity.  I am sure there are reams of data that might help explain why my surprise is unfounded. I wish I knew where to get those data and how to interpret them so I might better understand what, to me, looks like an inexplicable discrepancy. In the absence of both access to the data and the knowledge to properly analyze them, here’s where my mind is going: the vast majority of what I’ll call “excess wealth” in the U.S. goes toward non-necessary expenditures. We know it doesn’t go toward savings; the last figure I saw said U.S. savings amounted to less than nine percent of income, on average. And if memory serves, the Mexican savings rate is actually far greater, somewhere around twenty percent.

So, without the benefit of information and analytical skills, my take is this: Americans engage in wasteful, frivolous spending at a far greater rate than do Mexicans. Back to the source of my original left turn into economic research: if Americans were to divert just a portion of their frivolous spending toward lending money to micro-businesses in Mexico (and many other countries), it might go a long way toward reducing those disparities. I’ve been doing just that for a few years by making loans through KIVA. But none of my loans have been made to micro-businesses in Mexico. I’ve made loans in Peru, Ecuador, El Salvador, Columbia, Solomon Islands, and the U.S. All of the non-US loans have either been repaid in full or are being repaid. The only one for which I’ve not yet seen any payments is one I made for an agricultural enterprise in the U.S. While I feel good about doing what I’ve done, the amount of money I’ve lent through KIVA is truly embarrassingly small.

After this morning’s excursion, wading through data I don’t entirely understand and making conclusions I can’t entirely defend, I feel compelled to do more than I have done. But will I do as much as I think all Americans should? No. I won’t. Because, like almost all Americans, my personal comfort and desire for personal and familial financial security is greater than my concern for those who are less fortunate. Some people might say, “You’re being too hard on yourself; you should be proud of yourself for doing more than many do.” I would respond by saying, “No, I’m not being hard enough on myself and on everyone else who has the financial wherewithal to help lift up others and who choose, instead, to “invest” their money in luxuries and other non-necessities. ”

But maybe I am asking all of us to be saints; and I don’t believe in saints. I just wish we all would do more than we have done. I know many of us donate food and clothing to help impoverished people and we may give money to organizations that help people find temporary shelter or even longer-term housing. While that’s admirable, I think longer-term solutions are better “investments” in humanity. Micro-loans can help people generate their own income, buy their own food and clothes, and secure their own housing.

So far this morning, I’ve spent my mental energy comparing the economic behaviors of the U.S. with its Mexican counterpart. The problems of poverty are global. They will require global intervention if they are ever to be solved. And this rambling rant won’t even begin to make one iota of difference; it doesn’t even make me feel good. It doesn’t even strip away some of the feelings of outrage and impotence and sadness that accompany the recognition that we live in a world that is so far from imperfect that it might be the model for inadequacy.

Ach. There’s no value in beating oneself up for one’s failings. The best way forward is, always, a commitment to do better and to do what one can. And so I close this unhappy diatribe with a promise to do what I would have others do.

About John Swinburn

"Love not what you are but what you may become."― Miguel de Cervantes
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