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Mexican Billionaires Cause Immigration

Why should we care here in the United States about Carlos Slim, his billions and high Mexican phone prices?

By Gabriel Buelna
Published on LatinoLA: April 25, 2007


Mexican Billionaires Cause Immigration


As the son of Mexican immigrants and avid observer of everything Mexican, I noticed recently that Forbes magazine announced that Mexican telecom magnate Carlos Slim Helu had overtaken Warren Buffet as the world's second richest man at $53 billion. The richest man on the planet is still Microsoft's Bill Gates at $56 billion. In a country with a per capita income of less than $6,800 a year and with half the population living in poverty, the question is whether this is good or bad for Mexico and begs the question. "Why we should care in the United States."

To put Slim's earnings in perspective, his $53 billion is equivalent to roughly 7% of Mexico's annual economic output. His empire includes an airline, a cigarette company, music, internet service, mobile phone service and telephone giant Telmex. The latter was bought from the Mexican government in 1990 by a group of investors led by Slim. The purchase was made during the tenure of former Mexican President Carlos Salinas De Gortari, whose term ended with Mexico's largest currency devaluation, the loss of millions of jobs and Gortari's self imposed exile in Ireland. Essentially, the company was bought under dubious circumstances.

To put Telmex's grip on the Mexican economy in perspective, nine of ten landlines in the country are under its control, with its influence now reaching throughout Latin America with 100 million subscribers. According to the Organization for Economic Cooperation and Development Organization for Economic Cooperation and Development, Mexicans pay some of the highest phone rates in the world with a notoriously low quality of service.

So why should we care here in the United States about Carlos Slim, his billions and high Mexican phone prices? It is not Mr. Slim's billions we should be concerned about. In fact, if Mexico's billionaires were creating new products and jobs, I would admire them. The fact is, billionaires like Slim hold back economic growth, by choking off small and medium sized business with their control and protection by government. According to the Small Business Administration, small business accounts for 52 percent of all U.S. workers. In Mexico, small and medium sized businesses don't have an opportunity to succeed because companies like Telmex control the government levers, choking off any small business threatening their monopolies.

Each year, millions of Mexicans are forced to immigrate to the United States. Suffering through dangerous, humiliating circumstances, simply to work and send money back to their families. Once here, Mexican and other Latin American are extremely hard working and entrepreneurial, creating jobs throughout the economy. Under the right circumstances, this business energy could be occurring in Mexico or whichever home country they arrive from.

Slim is quoted as saying that "Poverty isn't solved with donations" and noted that jobs are created by growing businesses and not by hand outs. I do believe Mr. Slim is correct: Creating and nurturing Mexico's small and medium sized business would create the millions of jobs it needs. For Mexicans to dynamically participate in their own economy, fair opportunities with adequate government support must be given. Until this happens, we will continue to see immigration and poverty.

During the same news cycle as Slim's dubious honor was released, Mexican President Felipe Calderon signed a law eliminating prison sentences for libel or defamation. While I am shocked such laws even exist protecting Mexican officials, I applaud Calderon for moving toward eliminating barriers to Mexican democracy. For Calderon, signing such laws is easy compared to the heroic steps he will need to take if he intends to reduce poverty in Mexico by eliminating the monopolies and characters controlling it. He will need to break up Mexico's monopolies and invest in government monitoring to assure competitiveness continues throughout the Mexican economy.

Democracy is not simply about voting, it's about creating institutions that keep the economy and all aspects of life moving forward in a rhythm. While Mr. Slim is not alone in his monopolistic tendencies, he is an example of the Mexican mindset of holding down the masses for the benefit of an extreme few. The next time a Mexican businessperson makes the top ten richest persons in the world, I do wish it would be for creating new software, products or services that all Mexicans are proud of. Just as Mexico has come a long way in creating transparent elections, it to can help create an environment where Mexicans can feel free to grow and prosper and not feel obligated to immigrate to the United States. When they do visit the United States, the trip should be for pleasure and not painful.

What do you think?

About Gabriel Buelna:
Gabriel Buelna, PhD, MSW is Executive Director of Plaza Community Center in East Los Angeles and a faculty member in the Chicana/o Studies Department at Cal State Northridge. You can visit his blog at /




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