Episode Summary
In this episode of The Expat Files, Johnny Mueller provides an honest and unfiltered view of life in Latin America, contrasting it with the idealized portrayals found in travel magazines and websites. He announces a new consulting service on his website, expatwisdom.com, offering in-depth advice for expats. Johnny discusses the work ethic of Latin Americans, highlighting their contentment with jobs, even those that are physically demanding and temporary. He contrasts this with the work culture in the United States, referencing his father's experience as a blue-collar worker who valued permanent employment. Johnny also touches on the current economic climate, noting that many people are hesitant to quit their jobs due to the lack of alternative employment opportunities.
Johnny explores the dynamics of expat life in Latin America, highlighting the challenges expats face in finding work and the cultural differences in attitudes toward employment and unions. He notes that while many people aspire to become expats, few actually make the move, and those who do often have a different perspective on work and contentment. Johnny also explores the limited presence of labor unions in Latin America, attributing this to a lack of trust in union organizers and the consequences of strikes, which often result in job loss for workers. He contrasts this with the strong union presence in government sectors, where unions have made significant inroads, offering protections and benefits that are less common in the private sector.
Johnny discusses the lack of significant union influence in Latin America, particularly in the context of expat businessmen and the Makila sweatshop industry. He explains that unions in the region are weak and do not exert strong-arm tactics, leading to minimal fear among expat businessmen about unionization. He also highlights the impact of minimum wage increases on the Makila business, noting that governments often raise minimum wages before elections, which can lead to economic slowdown and business relocation. Johnny further discusses the high electric rates in Latin America, attributing them to the reliance on diesel-powered plants and the high cost of fuel. He acknowledges the potential for renewable energy sources like hydroelectric and geothermal power but clarifies that these do not necessarily result in cheap electricity due to the costs of infrastructure and maintenance.
Johnny discusses the cost of electricity in Costa Rica and compares it to the United States and other regions. He argues that despite Costa Rica's reliance on renewable energy, its electricity prices are significantly higher than in the U.S. He provides specific figures, such as the average cost per kilowatt hour in Costa Rica and the U.S., and highlights the impact of taxes on energy prices in Europe. Johnny also explains that Latin American countries, including Costa Rica, have higher electricity costs due to a combination of factors, including lower energy consumption and higher taxes. He concludes by suggesting that expats might consider going off-grid in Latin America due to the region's climate and lower energy demands.
Johnny discusses the differences in water heating systems between Latin America and other regions. He notes that in Latin America, most homes have cold running water, and only a small percentage have central hot water. However, they use point-of-use electric water heaters for showers, which are efficient because they heat water instantly and turn off when not in use. Johnny suggests that Latin Americans could adopt more energy-efficient practices, such as using solar-powered water heating systems, which could be made affordable and sold as a business. He critiques the lack of creativity in Latin American approaches to energy efficiency and highlights the potential for a business opportunity in providing low-cost solar water heating solutions. He further contrasts this with Costa Rica's renewable energy independence, noting that despite producing excess renewable energy, electricity rates remain high, suggesting that energy independence does not necessarily lead to lower costs. Johnny concludes by mentioning Hawaii's high electricity rates due to reliance on diesel generators, despite its abundant sunlight.
The segment discusses the challenges of solar energy adoption in Hawaii and Latin America, highlighting the advantages of solar hot water heaters in these regions due to the lack of frost. It also addresses the paradox of rising electricity rates in Hawaii despite increased solar energy usage, which penalizes those who conserve energy. The segment further explores the impact of government subsidies in Latin America, which discourage energy conservation among the poor by making electricity cheap and accessible.
Topics
Introduction to The Expat Files, Consulting service announcement, Work ethic in Latin America, Contrast with U.S. work culture, Current economic climate and job market, Expat Life in Latin America, Cultural Differences in Work Attitudes, Labor Unions in Latin America, Expatriate Experiences and Challenges, Union influence in Latin America, Makila sweatshop industry, Minimum wage impact on business
Chapters
00:00:00 Opening 00:00:35 Consulting Service Announcement 00:01:24 Work Ethic in Latin America 00:02:58 Contrast with U.S. Work Culture 00:04:21 Current Economic Climate and Job Market 00:04:27 The Competition for Jobs in Latin America 00:05:24 The Lag in Latin America's Work Culture 00:06:35 The Weakness of Unions in Latin America 00:07:24 Unions in Government vs. Private Sector 00:09:03 Expats and Unionization in Sweatshops 00:09:23 Weak Unions and Minimal Fear of Unionization in Latin America 00:10:55 Impact of Minimum Wage Increases on Makila Businesses 00:12:50 High Electricity Costs in Latin America and Reliance on Diesel 00:14:24 Costa Rica's Renewable Energy and Its Cost Implications 00:15:07 Comparing Electricity Costs in Costa Rica and the U.S. 00:15:42 The Paradox of Going Green and Paying More 00:16:17 Electricity Prices in Latin America and Europe 00:18:04 Why Latin Americans Pay More for Electricity 00:18:56 Efficient Water Heating in Latin America 00:19:28 Lessons from Latin America on Energy Efficiency 00:21:13 Opportunity for a Business in Solar Water Heating 00:23:13 Introduction to the Conundrum of Solar Energy in Hawaii and Latin America 00:23:57 The Paradox of Rising Electricity Rates in Hawaii Despite Solar Adoption 00:25:24 Government Subsidies and Their Impact on Energy Consumption in Latin America
Transcript
Automatically transcribed from the original recording; names and wording may contain errors.
[00:03] Hi everybody, I'm Johnny Mueller and you're listening to the expat files living in Latin America. The show that tells you what it's really like to live, work, play and or retire in Latin America. I tell it just like it is, not the version they give you in those glossy travel magazines or the picture they paint for you in those international traveler websites where they're only trying to sell you something. What's it really like for expats living in Latin America? Well, if you stick around a while, you'll find out. So let's get started. Before I get started today with my usual stuff, I'd like to announce that finally I've kept my promise and I have a consulting link on my webpage at www.expatwisdom.com. Which means now, for those of you who want some really in-depth knowledge about what
[00:49] it's like to live, work, play and or retire or do business down here in Latin America, we can go a lot deeper into some of those subjects as it pertains to your own situation. I know from the emails I've been getting that a lot of you want to come down here to Latin America and eventually become expats yourself. So if you do want to have a nice long detailed talk with me, just click on the one-on-one consulting link on expatwisdom.com. And of course I'll still be responding to individual email questions that you might send me. But those answers are always going to be pretty general. If you want the specific stuff, you can talk to me personally. Okay, enough said about that. You know in a show a couple of weeks ago, I mentioned that Latin Americans as a rule, even the ones making 300 bucks a month, don't complain about their jobs. Even if they're working on a road construction crew all day, sweating it out and coming home
[01:36] like a filthy mess, I've never once heard these guys complain about their jobs. So I've heard them complain about the heat and the sun and the rain maybe. But the job, they're just happy to have a job. A job that they call Fijo. That's the kind of job they all want. Fijo. That means fixed. A job that's permanent, not temporary for two weeks or a day or a month. And down here, so many jobs are like that. They're temporary jobs basically or sporadic. Like a lot of the temporary agricultural jobs up north where they hire people just for the picking season. And as you might imagine because most of Latin America has four growing seasons, you got a lot of temporary work. So people move from farm to farm and migrate around looking for a crop to pick. Like for example, I can see for myself right outside the window where I'm doing my show today, it's coffee picking time and I see ten or fifteen people out there with those
[02:25] big white coffee sacks slung over their shoulders. And you don't see that but two or three times a year. And even people who are moving all the time looking for this temporary agricultural work, they don't complain about those jobs at all. Even though they are really tough, tough jobs. And when you ask one of them what kind of job he'd really like to have, they say Travajo Fijo. Which means a fixed job. One that they can go to every day and know it's there, come hell or high water. Because it's awful hard to plan your life. If you know you've only got two or three weeks of work ahead of you and you gotta look for something else immediately after that's over. Now the reason why I bring this up is because it harks back to the fact that Latin America is living in lag time. They're living in the past compared to us up in the first world. Because I remember when I was a kid, my dad never complained about his job and he had
[03:11] a tough one too. And in fact, he usually worked two, even three jobs because there were six kids in the family. And he never graduated from high school. So he had to work factory and grunt work jobs. All the while supporting the kids and sending my mother through graduate school to get her master's and her doctorate. That's what I remember when I was a kid. Is that neither my dad nor any of his friends, also grunt workers, never complained about their jobs. They were just damn happy to have permanent jobs. And the goal of Blue Collar America in the 60's and 70's and even the 80's was to get that 20 or 30 years in with the same company so you could get out with a nice pension. Like I said, my dad never complained about his job. He complained maybe about the heat, or about his bad back sometimes, but never about the job. And even now, so many years after he's passed away, I still don't know if he really liked
[03:58] his job or not. And the reason why I bring this up is because that show I did a couple weeks ago talking about how Latins never complain about their jobs either. Well I got some pretty enlightening emails from some folks saying that they too keep their mouths shut because they don't want to look like complainers, but they actually hate their jobs too and would love to quit or change jobs, but there's just no way to do that. Not in today's horrible economic climate. Like one guy said, saying people just don't go quitting their job because they don't like it. Not these days. Because there's 10 or 20 other guys in line to fill it as soon as you walk out. And I also got some emails from people after that show saying that they really and truly are expat wannabes, but they know somehow that they're never going to make it down to Latin America. But they like to hear all the stories about people who have made it down, so they kind
[04:44] of live vicariously through that, and especially through the trials and tribulations of expat eddy. So I get a lot of emails from people who are never really going to become expats, but all the while they're building up a greater knowledge of what's really happening down on the streets of Latin America, in case they ever do make it down here. And then they'll have a big head start on everyone else, whose only trip to Latin America might have been Costa Rica or Cancun. Places I always say that are about as realistically Latin American as Las Vegas or Hollywood are examples of Main Street USA. So when I say that Latin Americans don't complain about their jobs and are just happy to have one, it's just another perfect example of how Latin America lags behind the United States and the First World by 10, 20, or even 30 years. Though I guess as Latin Americans become more sophisticated in the future, you're going
[05:32] to start to hear them outwardly complain about how they hate their jobs, just like you hear First World people do. But until then, down here, the working classes are just very content just to get a paycheck. Which is, I suppose, a very good reason why unions, and I'm talking about labor unions, are having a very hard time penetrating down here. Though I admit there are unions in certain industries like textiles and sweatshops and stuff, but there seems to be among the Latin American population an innate kind of distrust or suspicion for union organizers in general. And as one construction worker told me recently, when union guys come around and try to organize, the bottom line is that they always want a piece of your paycheck every month. And they make a lot of promises, just like politicians, that they never keep.
[06:18] You know, better pay, shorter hours, better working conditions. And then of course the union always says, if we don't get what we want, we'll go on strike. And then when the workers go on strike, they don't get any paycheck at all. Because no one gets paid when they're on strike. And down here, unlike in the first world, there's no such thing as Stryker's pay. And that in a nutshell is why unions are quite weak down here. And then this construction worker told me his wife works in a Makila, which is one of the sweatshops. And she belongs to a union, her whole sweatshop does. And he said that the last time they went on strike, the management said if you don't get back to work in 48 hours, we're firing all of you and we're bringing in a whole new crew. And it was no joke because the next day in the paper, the owners put in a big want ad that said they needed workers right away at that Makila. And the next day, 400 people showed up to apply for 75 jobs.
[07:07] And the end result was the workers that did go on strike walked off the job for five days, lost five days pay. And when they were threatened with being fired and all those other people showed up outside, the scabs, looking to replace them in their jobs, they got scared and went back to work. And they didn't gain a thing. But here's the thing, places where unions have made an inroads are guess where? Government, where else? Just like in the first world, unions are very big with government employees. And why wouldn't they be? Think of the postal and teachers unions, some of the strongest unions in the first world. All you have to do is hold them up as an example to third world government employees. And it's a no brainer. They want in on that gravy train too. For example, in teachers and postal unions, it's almost impossible to get fired.
[07:53] Even if you're an alcoholic, go on a drug rampage or get involved in a sexual harassment case on the job. Even if you're chronically later, just a bad worker in general. If you're in the union, not a problem. It's not your fault. In the first world, you don't get fired for that kind of stuff. You get professional counseling and paid time off because the union has successfully negotiated for that kind of stuff. Now unions being the big bureaucracies that they are, are always trying to expand just like government. That's their role in life, to get bigger and bigger and get more members, right? And actually some of their prime goals for expansion are down here in Latin America, where workers are very lightly organized. So when union organizers from up north come down here to Latin America and try to recruit and organize government workers, all they have to do is demonstrate some of the gains
[08:42] that they've made up in the first world, make the usual promises that they won't keep, and outline some of those benefits I've just mentioned. And it's a no-brainer to see that government workers down here in Latin America will sign up and jump on that bandwagon in a second. And how does that affect expats down here in Latin America? Well like I said, the only expat businessmen that I know that have workers that are unionized are people in the Makila business, the sweatshop business, the textiles. But none of these expats that I know have any opinion either way about the union. They don't seem to care about it. It's not big on their list of something they have to worry about. It just means that all you expat wannabes up there shouldn't worry that some kind of union is going to come in and start dictating to you. Down here in Latin America, laws are weak and spotty enforced, and the unions that do
[09:27] exist are weak so they don't use strong-arm tactics. So in fact nearly all expat businessmen I know have no real fear of their places being unionized. And even some of the businesses that are somewhat unionized, like the textile business, the union bosses themselves don't seem to want to rock the boat. They just want full, steady, secure employment for their workers. Nothing wrong with that. I have quite a few expat businessmen friends who are in that sweatshop business. And sorry if sweatshop seems like a derogatory term but everybody uses it so I might as well use it too. Anyway, like some of my friends in the Makila sweatshop business tell me, a few years back there was a big wave of union organizers hitting the sweatshops one by one in Central America especially where most of the clothing and shoe makilas are in places like Nicaragua,
[10:16] Honduras, Guatemala, and Salvador, and in a lot of instances once these unions got in they promised a wage increase, goaded on of course by union organizers up in the first world who offered their full assistance to union organizers down here in Latin America. Anyway, these unions with help from some of the big unions up in the first world put a lot of pressure on the Makila owners who didn't budge because they knew there was a big line of people just ready and willing to take those jobs if the regular workers went on strike. So instead the unions lobbied and petitioned the governments of Latin America to raise their minimum wage and then Makila sweatshop owners would have to abide by that law because minimum wage is what most Makilas pay. So when there is a minimum wage increase it immediately concerns Makila workers and agricultural
[11:03] workers. And by the way, there are two minimum wages in every Latin American country. They have a minimum wage for agricultural workers and a minimum wage for everybody else. And the agricultural minimum wage is always a little bit lower, about 75% of the regular minimum wage. So anyway, down here in Latin America governments love to increase their minimum wage or at least propose a minimum wage increase and usually right before election time because then they can get the votes of the masses who work at minimum wage and believe me more than half the people down here do. But every time a government down here increases the minimum wage even slightly by a few cents, it slows down the business sector of the economy and a lot of the factories and the farms and the Makilas go out of business or they move to a neighboring country that gives them tax
[11:51] breaks or a country that has a lower minimum wage or to a country that gives long term generous electric power subsidies. But we'll talk about that later. And those are the three big reasons why Makilas are down here in the first place. Low taxes, energy subsidies and for that very low minimum wage and a population that's ready and willing to work for $10 or less a day. And that's why some of my expat friends in the Makila business for many years down here are now in the Makila business in Vietnam and Indonesia. And there are really only two things that will make a Makila business shut its doors and move away to another country on quick notice. And that's an increase in the minimum wage and an increase in electric rates. And admittedly down here in Latin America we have very high electric rates compared to the first world. At least double or even triple.
[12:38] Up in Cleveland you might be paying $11 or $12 a kilowatt hour. Here we're paying $20 or even $30 a kilowatt hour. And why is that? Well there's a lot of reasons but one of them is because a lot of electric power generation in Latin America is done with diesel electric power plants. And we all know that the price of gas and diesel are at all time highs and they're only going to get worse. Just wait until Israel and Iran get into it. Just watch those gas and oil prices soar then. You ain't seen nothing yet. But wait a minute you say. Latin America is just filled with rivers and mountains and massive water runoffs especially during the rainy season. What about geothermal and hydroelectric plants? I mean isn't Latin America just perfect for that kind of stuff? In fact you've probably heard some places like Chile and Costa Rica and Argentina generate
[13:25] way more than half of their electricity from geothermal and hydroelectric sources. In fact Costa Rica generates more than 95% of all its electricity that way. Well now that really sounds great. Especially since if you're not buying oil electricity should be cheap because you're getting it from water and solar and geothermal sources right? Nobody there is paying an oil company or an outsider for anything. Well that's what I used to think too. But if you're under the misconception that if you use totally renewable resources like that for electricity generation and don't use oil or gas products at all, therefore your electricity should be virtually free or just at a small percentage of what a petroleum based electrical power generation system would cost. Well let me slap some sense into you right now. Costa Rica which produces nearly 100% of its electricity from renewable resources should
[14:15] be a model or a guide for every country that's trying to do the same right? Get completely off petroleum based dependency for electric power. Well guess what? If you do that and follow Costa Rica's example, you're going to be paying not a small fraction of what you're paying up in the first world, but double, even triple and more of what you're paying up in the first world for electricity per kilowatt hour. Which doesn't make sense at all. But those are the facts Jack, listen to this. When you get your bill in Costa Rica, you pay about 15 cents per kilowatt hour for the first 200 kilowatt hours. And you pay 25 to 30 cents a kilowatt hour for everything you use over 200 kilowatts that month. So what does that gobbledygook mean? Well that means since the average family of 4 in the United States uses about 1000 kilowatt
[15:01] hours a month of electricity, that means that if they were in Costa Rica using 1000 kilowatt hours a month, they'd be spending about 270 dollars a month on their electric bill. Whereas in the United States the average cost of a kilowatt hour is between 11 and 13 cents. That means that as long as you're living up in the United States, you'll be paying half or less of what you'd pay if you use that same amount of electricity down in Costa Rica. Which doesn't make a bit of sense at all, since Costa Rica is not using any oil or petroleum products to generate their electricity. And when you think about that for a minute, why should anyone up north think it's such a great goal to go with completely renewable electric energy resources, when based on the example of Costa Rica who's already done it, you can only expect a slap in the face
[15:46] and a kick in the balls, because you're going to be paying twice to three times as much as you pay now for the equivalent amount of electricity. Though you'll be able to brag about the fact that your country is oh so forward and progressive using only renewable resources for electric power. Some consolation prize for going green, huh? And then you might ask yourself, how can Costa Ricans afford to pay that kind of price for electricity? Or how can anyone in Latin America for that matter? Since electric kilowatt hour prices all over Latin America are two to three, even four times as high as they are in the states. And what about kilowatt hour costs if you're an expat coming from Europe? Since European kilowatt hour costs are all over the map. And of course most European governments tax the hell out of things like that, including gas. That's why right now gas is about eight to ten bucks a gallon in Europe.
[16:34] It's mostly tax. In France, 75% of the cost of gasoline is taxes going directly to the government. So if France, or for that matter all the other countries in Europe, wanted to see two dollars gas again, they could have it tomorrow if they just eliminated their taxes on it. But of course they'll never do that. In Europe like the US, the government is the biggest employer and the biggest parasite. So they need to steal as much of your money as they possibly can. And one of the easiest ways to do that is to tax a commodity that people use every day and cannot do without. And they'd tax air if they could, but they haven't figured out how to do that yet. I mean they already tax everything else that we need to survive like food and water. So why not air? Anyway like I said in Europe, the cost per kilowatt hour is all over the board. The cheapest being about eight cents a kilowatt hour in Finland and the most expensive in
[17:23] Italy at about 40 cents a kilowatt hour. That's worse than Costa Rica. And again it's all about the taxes because producing electricity wherever you are as a raw commodity doesn't fluctuate that much worldwide. And know this, up in the first world about a quarter of your electric bill is taxes, state and local. And if you don't like those high taxes and who does, you can always unplug. Well you could get off the grid like a lot of us are trying to do down here in Latin America since we have the absolute perfect climate and conditions for it. But I'll talk more about that in another show. Anyway like I was saying, how do Costa Ricans and Latin Americans in general pay double, triple, even four times those kilowatt hour rates that people up in the first world pay? Well first of all, a Latin American family of four does not use a thousand kilowatt hours
[18:08] per month. Believe me, most of them use 200 kilowatt hours or under. That's because the average Latin American cooks with propane gas or even wood. And throughout 80% of Latin America people don't have air conditioning or heating. Which certainly has to cut their electrical usage in half right there. And by the way, the average Latin American house at night is miserably dim. I mean the vast majority of them are terribly underlit. In fact you could sit in a Latin Americans living room or kitchen any night of the year and I bet you you couldn't read a book or a newspaper under those conditions. It's just way too dim. But they're used to living that way because they can't afford to pay those big electric bills. And like I've said before, probably less than 3% of all Latin American homes, that's 3 out of 100, have central hot water.
[18:56] The rest of them just have cold running water. So you're almost never going to see a big tank of a water heater anywhere in anyone's house. Which in effect saves big on that electric bill too. But Latin Americans do have that little point of use hot water heater when they want to take a shower. And it's electric and it heats the water instantly when you flip the switch and turn on the water. And they're very efficient because they turn off right away too. Not like a big standing hot water heater where the water is being heated all day long to a certain temperature. Now that uses energy even if you're not taking a shower or running the hot water in the sink. And you know really we could take a lot of lessons from Latin Americans on how they save energy. Though in basic conservation they're way behind us. And I mean for example even the smallest little hut of a house. With cold running water and a tin roof.
[19:41] Even a house like that could have free unlimited hot water all day long. Simply by doing something so very simple like running a garden hose and a zig zag across their roof. And attaching one end to a shower head and another end to the water supply at the sink. If they just did that even without a storage tank they'd have 12 hours of very hot water. Totally free and heated by the sun. But no one's doing that. And I don't know why because what's a garden hose cost? 10, 15 bucks? Well I take that back I do know why. It's because Latins just aren't creative thinkers. They don't think about things like that. It's just not on their radar and I guess that's a big part of the gringo advantage. Now there's an instant very low start up cost money making business for an ex-pad. You just design a cheap little self contained roof unit that looks kind of nice in first
[20:29] world. That the average latin can just pop on his roof and run a hose to and the other end down to a shower stall in the house. Now of course you'd want to build in a mechanical flow regulator. And those things are easy to get and they're made out of plastic and very cheap. And a little mechanical plastic inline temperature regulator too. And none of those items use electricity. And they're plenty rugged nothing can go wrong. You can make and sell these little units as a business yourself or wholesale them out to hardware stores. I'm telling you everyone and his brother would want one of these things and they'd be cheap. And you could even have a little more expensive unit with a storage tank alongside. So you'd have 50, 75 or 100 gallons of water at night if you needed it. And I bet you could build these things for 50 bucks a piece and sell them for 100. And I know for a fact that everywhere I drive in Latin America these days I see that people
[21:18] who have money, who have little bit nicer houses, the upper middle class, people making a thousand bucks or more a month, a lot of these people are starting to put prefab solar hot water heaters up on their roof you know. They have that typical look, a square box with a bunch of vertical tubes and a big horizontal storage tank above that. Now of course down here in Latin America with all the sun you get everybody and his brother wants one of those things but they cost at minimum a thousand bucks. That's just for a very basic unit too. Now imagine you come in with a real stripped down version of that unit made locally and you can sell it for a hundred bucks or maybe a little more. Man that's a business I think I'd like to get into myself. Anyway there's an idea for you. And it's not rocket science and for all you scaredy cats there's no electricity involved. And guess what?
[22:04] You're looking at a customer base of at least a hundred million households. Man I want a piece of that market. Then you might ask so why isn't anybody doing it? Well that's the gringo advantage man. We're always thinking about how to make things more efficient and better and Latins just don't. Which brings me back to the business of Costa Rica which I just don't understand. They're completely self sufficient in renewable electricity. They're not buying any electric power from adjacent countries. In fact they produce an excess so they're selling some of it. Yet their electric rates are the same if not more than the rates in adjacent countries which use diesel generators and buy electricity from other countries which means they're paying a premium. So what I'm saying is this don't believe for one second if your state or country is self sufficient in renewable energy that your prices are going to go down accordingly.
[22:50] They're not. But you can be proud of the fact that you're not buying any petroleum from Saudi Arabia or Hugo Chavez I guess. It'll take someone a lot smarter than me to explain that conundrum. And by the way when talking about electric rates the highest rates in the United States are in Hawaii. They're around 35 to 40 cents a kilowatt hour. That's because Hawaii has to use all diesel generation for their electric grid. And talking about a conundrum now listen to this. Hawaii is one of the places in the United States that gets a lot of sun. And like Latin America that makes it perfect for solar energy. Because like in most of Latin America you don't have to worry about frost. Which means solar hot water heaters are much cheaper and simpler to design too. Because up north in the United States if you use a solar hot water heater you have to have
[23:36] a heat exchanger and an antifreeze closed loop or else it'll freeze in the winter. And the pipes will burst and that'll be all she wrote. But in Hawaii and in 80% of Latin America you don't have that problem. You can run your cold supply feed water right through the tubes on the roof and back down into your house and use that hot water. You don't need to treat it or run it through an expensive closed loop or any of that stuff. But get this in Hawaii where everyone's first world a lot of people are doing that. In fact so many people are putting up solar collectors and solar hot water heaters and photovoltaic electric systems. That electric power consumption at the utility level, that is the power company, is down. It turns out every year they're selling less and less electricity instead of more and more like the rest of the world.
[24:21] And because people are using less there's a loss in revenue and guess what? They're raising their electric rates correspondingly to make up for the fact that more people are using solar energy. Man ain't that a kick in the teeth. Because you know about 80 to 90% of people who have solar panels and stuff on their roofs don't have systems that work 100% of the time. They might work 50, 60 or 70% of the time depending on the sun and the cloud cover and the battery storage capacity that you might have. Anyway you're still hooked up to the grid and occasionally you have to use power from the grid. And the local power company keeps jacking up those prices. So the more you conserve, the more you're going to pay when you tap into their grid. Now that's a big slap in the face now isn't it? That's the very definition of being punished for being a good citizen.
[25:09] And that's why expat Eddie always says, the truth will set you free but it'll also make you miserable. Only in America I guess. Which is reason number 2346. Why you should pack up your bags, move on down to Latin America and be a permanent expat like me. Oh and just one more thing, all throughout Latin America, governments subsidize the poor by giving them a very low rate on the first 100 kilowatts of use. Which really runs against the grain for me and a lot of other expats because this is what happens. If you're a poor family living in a poor neighborhood and you're only paying 6 cents a kilowatt hour for the first 100 kilowatt hours, that's like 6 bucks right? A month. And at that cost, no matter what you make, it's almost like free, 6 bucks a month. What's that? But what that does is it gives those people absolutely no incentive to conserve.
[25:55] No matter how they burn through that first 100 kilowatts of energy, 6 bucks a month. For the 250 million or so, the 50% of the population in Latin America, who are getting that cheap subsidy, they have no concept of energy use at all. They're completely uneducated about wattage and ratings on bulbs and refrigerators and televisions. They just buy something because they like it or need it or have the money at the moment and don't give one damn if the thing uses 25 watts or 250 watts. And that's why as you drive through some of these poor neighborhoods at night, you see the vast majority of little houses with a light bulb or two on, and they're the regular incandescent bulbs that use a lot of energy, not the energy-saving fluorescent or LED bulbs that everybody's buying these days, that use like a tenth of the power as a standard incandescent.
[26:44] For poor folks, light bulb efficiency isn't even on their radar, and it should be. But they're not going to spend 4 or 5 bucks for a really efficient compact fluorescent or an LED bulb for 10 bucks, when they can get a really inefficient incandescent bulb that uses a ton of energy for like a buck or 75 cents. It's a no-brainer for them, they pick the 75 cent bulb every time. And why is that? Because they've got that subsidized energy bill. If they had to pay the standard going rate for electricity, they'd learn in a hurry to save their pennies and buy those compact super-efficient lights, which cost more in the beginning, but in the long run, save you a ton of money. But you see, because half the people in Latin America are getting that electric subsidy, the first politician who suggests removing that subsidy just ain't going to get re-elected. And that's job number one for a politician, to get re-elected.
[27:38] You've been listening to The Expat Files, living in Latin America, coming to you each week from somewhere south of the border. And don't forget, you can email me on anything at all about Latin America, The Expat Files at gmail.com. Once again, The Expat Files at gmail.com. See you next time. Nos vemos.