Morena followers and sympathizers ignorantly say that Mexican people should boycott Walmart, Costco, Starbucks, McDonald’s, and other companies that “sound” American.
Let’s look at the numbers.
Walmart/Sam’s, Costco, Starbucks, McDonald’s, and Sears, for example, provide DIRECT employment to more than 1 million Mexicans, with all the benefits required by law. That means that their employees receive a salary, pay taxes, receive social security, Infonavit, etc., etc.
To understand the catastrophic impact of a successful boycott against companies like Walmart, Costco, Starbucks, and McDonald’s in Mexico, let’s analyze the economic and social effects at different levels:
- Impact on Employment
These companies employ more than 1 million Mexicans with legal benefits. If the boycott forced them to close or reduce operations, the effects would be:
- Mass unemployment: 1 million people would be left without income.
- Increased poverty: Many of these people depend entirely on these jobs.
- The burden on the social support system: More people would demand welfare scholarships, unemployment insurance (in the case that it applies to executive positions), and government assistance, which they will not be given.
- Impact on Government Income (SAT, IMSS, Infonavit)
These workers pay taxes and contributions. If they lose their jobs:
Loss of ISR and IMSS fees with cheerful numbers (I repeat: cheerful numbers as a practical example)
- If each worker earned 10,000 pesos per month, with an average rate of 10% of ISR, the government would lose 1 billion pesos per month only in ISR.
- In contributions to IMSS and Infonavit, calculating 15% of the payroll, the impact would be billions of pesos per month not to mention per year in tax losses.
- Impact on consumption and the economy.
- One million people with less purchasing power means less consumption, which affects other small local companies that depend on these large corporations as suppliers and would also lose income.
- Closing of stores and reduction of foreign investment
- Companies like Walmart, Costco, McDonald’s, FedEx, etc. invest billions of dollars in infrastructure and expansion in Mexico. But ignorants do not know this or do not even take it into account.
- A successful boycott would scare away foreign investment and send a negative signal to other global investors.
Less investment, less employment, and less economic growth = financial, political, and social catastrophe.
- Impact on prices and competition
- Less competition means that prices would rise, affecting consumers of all classes and socioeconomic levels, particularly the middle/low and lower classes.
- Self-service stores maintain low prices due to economies of scale. Without them, costs would rise.
- Corollary –
An economic and social disaster
If a boycott were to succeed in closing or significantly reducing the operations of these companies in Mexico, the effects would be:
- Hundreds of thousands of unemployed
- Loss of billions of pesos annually in taxes
- Less consumption and greater poverty
- Reduction of foreign investment
- Increase in prices of basic goods
The result would be a catastrophic blow to the Mexican economy, affecting not only the boycotted companies but millions of people directly and indirectly.
Ignorance costs a lot and not just money.
José E. Urioste
February 03, 2025
Times Media Mexico
