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Homer Simpson Nods

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Earlier today I sent a letter to the New York Times in response to an atrociously bad op-ed by Sandy Levin and Harley Shaiken [2]. (I’ll wait several days before posting the letter here because the NYT will not even consider it for publication if it is shared publicly anywhere else.)

But after pondering my letter, I believe that I made there an analytical error. I’ve since revised the letter; hopefully the Gray Lady will publish the revised version.

Specifically, after offering some (I still believe valid) evidence against Levin’s and Shaiken’s claim that the productivity of workers in Mexico is equivalent to the productivity of workers in the United States, I argued, further, that this measured productivity difference is even greater than it appears. The reason (said I) is that Mexico has worse infrastructure and trade logistics than does the U.S. (which is true: it does). Here’s the passage from my first letter that I now believe to be mistaken:

And in reality this difference in the market value of worker output between the two countries is even greater because trade logistics in Mexico – the ease, speed, and reliability of moving outputs from factories to markets – are much worse in Mexico than in the U.S [3]. As a result, compared to the U.S., a greater portion of manufactured output in Mexico is damaged, delayed, or lost as it makes its way through the stream of distribution.

The reason the above passage is mistaken is that the ‘poorness’ of Mexico’s infrastructure and logistics (compared to that of the U.S.) is already reflected in lower market values of the outputs of Mexican factories. And so to suggest, as I did in the earlier letter, that the value of Mexican-workers’ output should be further discounted to reflect that country’s poor infrastructure and logistics is to double-count a Mexican economic liability.

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