What We’re Watching: Mexico boosts the minimum wage again

Maximizing Mexico's Minimum Wage – Andres Manuel Lopez Obrador took office as Mexico's president last year on promises to reduce income inequality in his country. To accomplish this, he raised Mexico's unusually low minimum wage last year by 16 percent. On January 1, the wage will rise another 20 percent, roughly seven times the current rate of inflation. Supporters say the move will boost purchasing power and alleviate poverty. Critics warn that it will stoke inflation and discourage companies from hiring new workers. For perspective, even after these two hikes, the Mexican minimum wage will still be barely US $6.50… per day.


North Koreans Outside North Korea – There are almost 100,000 North Koreans working outside their home country, mainly in China and Russia. The NK government wants them to stay put, because the money they send home to their families helps keep North Korea's economy afloat. But a United Nations resolution, introduced two years ago in response to North Korean missile tests, says all these workers have to go home by December 22. Think they'll go?

Vito the Bionic Cat – If you've read reviews of the new film adaptation of "Cats," the Andrew Lloyd Webber musical, you know there's a solid chance it's the worst movie ever made. Like your Friday author, you probably had no intention of seeing it anyway. Fortunately, there has been good news this week in the world of real cats. For the first time in history (we think), veterinary surgeons have successfully attached prosthetic legs on an Italian cat. Vituzzo—his friends call him Vito—lost both hind legs in a car accident. Today, his new bionic legs have made him an Internet superstar. Somebody should make a movie about that.

What We're Ignoring

Impeachment Games – Reportedly, some Democrats want House Speaker Nancy Pelosi to refuse to send the freshly-passed Articles of Impeachment to the Senate until Mitch McConnell, leader of the Republican Senate Majority, agrees to allow more witnesses and evidence into the proceedings. We can ignore this proposal, because the Democrats have zero leverage here. Republicans are happy to delay the trial because the uncertainty would create turmoil for the presidential campaigns of Democratic Senators Warren, Sanders, Klobuchar, and Booker—and because it will appear to some voters that Democrats are playing games with a process they've thus far tried to treat with solemnity.

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As the coronavirus pandemic has plunged much of the world economy into turmoil, you've probably heard a lot about what might happen to "supply chains," the vast networks of manufacturing and shipping that help create and deliver all those plastic toys, iPhones, cars, pills, pants, yogurt, and N95 face-masks you've been waiting on.

The future of global supply chains is an especially important question for China, the world's manufacturing powerhouse. Some countries and companies now worry about relying too much on any single supplier for consumer and medical goods, let alone one where the government hid the first evidence of what became a global pandemic and sometimes enforces trade and investment rules in seemingly arbitrary ways. The US-China trade war — and the vulnerabilities it reveals for manufacturers — certainly don't help.

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AMLO and Trump: an unlikely duo – When Mexico's populist president Andrés Manuel López Obrador, known as AMLO, shakes hands with President Trump at the White House on Wednesday to celebrate the new United States-Mexico-Canada trade deal, it will mark AMLO's first foreign trip since he assumed office nearly two years ago. In the run up to the meeting, both Trump and AMLO have boasted of warm personal ties, but the friendship is… an unlikely one. Recall when AMLO was elected in 2018, most analysts predicted that he would clash with Trump over immigration and trade (AMLO had long advocated for Mexicans' right to work in the United States, while Trump infamously referred to Mexican migrants as "criminals" and vowed to abolish NAFTA, the free trade agreement that was a boon for Mexico's economy.) But in endearing himself to Trump, AMLO may have calculated that, from Mexico's standpoint, a revised trade deal is better than no trade deal at all, and has thus been willing to appease the US president on issues like immigration. (As part of an agreement with the Trump administration, for example, AMLO deployed the National Guard to stop Central Americans trying to reach the US via Mexican territory.) Moreover, in flying to Washington now AMLO might also be keen to distract attention from his own poor handling of the coronavirus pandemic, which has seen Mexico's death toll surpass 30,000 in recent days, now one of the highest in the world.

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Ian Bremmer's Quick Take:

Got through the Fourth of July. Pretty rough one for 2020 here in the United States. Still in the thick of it as we see caseload exploding in the United States. But really, the virus is all about developing markets right now. Poor countries around the world very soon, with the exception of the US and the UK, all of the top 10 countries around the world in terms of coronavirus caseload will be poorer countries. Let's keep in mind, these are countries that test a lot less, which means the actual numbers, in the United States the experts are saying probable likelihood of total cases is about 10x what we've actually seen in the US, in emerging markets and most of them, it's more like between 20 and 100. In other words, this is really where the virus now is.

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Many countries around the world — mostly democracies in the Americas, Asia, and Europe — have condemned China's recent move to implement a draconian new security law for Hong Kong that in effect ends the autonomy granted to the territory when it reverted from British control to Chinese rule in 1997. However, last week 52 countries expressed support for China's decision at the UN Human Rights Commission in Geneva. Most of these countries either owe China a lot of money or are relatively authoritarian regimes themselves — but not all of them. Here's a look at the China-debt exposure and freedom rankings of the countries that took Beijing's side on the new Hong Kong law.