#28 – Expat Life in Latin America: Culture, Work, and Living

Automatically transcribed from the original recording; names and wording may contain errors.

[00:01] South of the border Down Mexico. Hi everybody I'm Johnny Mueller and you're listening to the expat files Living in Latin America the one-of-a-kind show that tells you what it's like to live work play and or retire in Latin America It's a fact that millions of Europeans and North Americans have already made that big move south of the border You might know someone who already has maybe it's your dream to do it someday Well, it's a big move and it's not to be taken lightly and that's just what this show is all about. So let's get started And I'm Johnny Mueller back to you from deep in the heart of Latin America with some more sweeping Generalizations about Latin America and I know that people like you out there who listen to shows on the progressive radio network

[00:47] You're smart enough to realize that when I do blather on about Latin America What I have to say might hold for 80% or more of Latin America But since there's 20 Latin countries, there's always going to be some degree of variation So for example, if I say that the value-added tax in Latin America is 10% Called Eva don't nitpick and send me an email saying that Guatemala's Eva is 12% I know that but I'm just generalizing It would be impossible for me to break down every little situation that happens in every country But I'm more than happy to give you the basics. So about today's show Well, as you probably remember in the last few shows I've been talking about buying land or buying an existing house outright And now just when I thought I was finished with all that I get a slew of emails asking me to touch on a few more related topics, which of course I'm glad to do in

[01:39] One email I was asked simply when building a house. How do you go about dispersing money to your crew and paying bills? Like I mentioned before if you're building a single-family house You're likely to have about a dozen people working on that project and generally they'll be the same men working day in and day out For anywhere from six months to a year and yes I said men because in the 20 years that I've been in Latin America I've never seen a single woman working as a contractor or builder and I know up in the first world women Contractors are somewhat rare, too But there are some women drywallers bricklayers plumbers and even electricians Well down here practically the only time you'll ever see a woman on a construction site is around noontime And that's when the local ladies will come down with a knapsack full of box lunches and tortillas and for about a dollar and a

[02:30] Half all your local workers can get a nice hot lunch Now right away down here. You'll notice that the work week is a little different than it is up north Every single construction worker works a half a day on Saturday, and that's true for the majority of the population About three-quarters or more of the Latin American working population have a 44-hour work week That is your normal eight-hour work day Monday through Friday and an additional four-hour shift from 8 to noon on Saturday And the funny thing is up in the first world way back 50 or 60 years ago Everybody got the 40-hour work week, but down here even in 2011 nobody's pushing for one and that's because only a small fraction of workers are unionized and the ones that are like the sweat shops some

[03:17] agricultural workers and some government workers They're virtually powerless and just like in the first world the union gladly takes their members dues But they get almost nothing in return and when they do go on strike for something They usually end up losing more wages in the walkout than they ever gained by getting a better contract deal out of it And the only guys driving around in nice cars eating high-class lunches and wearing clean shirts are the union bosses Just like in the first world what a coincidence Yep, the bosses will be driving around in their SUVs while the rank-and-file is making two or three hundred dollars a month But you won't find any union organizers in the construction business In fact, there's no carpenters bricklayers or plumbers union in Latin America

[04:04] And if there are me and my expat friends We've never heard about them and if there were you better believe there would have been a 40 hour work week a long time ago So naturally if there aren't any workers unions except in a few small isolated cases then you better believe that the workers don't have any health care insurance and Forget the dental and as for the concept of maternity leave well you might as well be on another planet So all you expat ladies out there if you come down to Latin America, and you're looking for those perks Don't hold your breath unless you can hold it for about 50 years And as far as actually getting paid the average worker in Latin America gets paid twice a month And there's an actual Spanish word for that magic day we call payday, which doesn't exist in the English vocabulary

[04:50] It's called the quincea, and it comes from the word quince which is 15 meaning 15 days Which is when the average Latin worker gets paid every 15 days? And you don't have to look at a calendar to find out when that quincea comes all you have to do is drive around town any Latin American town And you'll notice that two days a month there are huge lines in front of every bank and sometimes these lines can be two And three blocks long it's like two days a month very early in the morning before the Sun even comes up people start lining up like the bank was holding some kind of Hollywood sneak preview and It's not because the average worker is rushing to the bank to deposit his money It's that a few short years ago There was a big change all throughout Latin America in the way employers started paying their help

[05:39] Because you see before five or ten years ago every worker at payday on the quincea Got a regular pay packet just like they did back in the first world some 50 years ago Go ahead and ask your grandpa about that ask him How he got his pay back at the black and Decker factory in Chicago back in the 1950s? He either got a check or cash money in a pay packet now here in Latin America about five or ten years ago The average working Latin American whether he liked it or not was dragged kicking and screaming Into the 20th century at least when it came to getting his pay in other words just a short time ago the old pay packet system was switched to a direct deposit system in one of the local banks and When the change came it really teed off the workers who wanted the cash in hand on payday

[06:30] I mean really who wants to wait in line two hours at a bank just to get your pay But you see the fact is back in the days of the pay packets Payday was a very dangerous day for the guy carrying the money I mean all you have to do is look back in the newspaper files And you'd see hundreds and hundreds of cases of people getting robbed on payday And it wasn't the common worker getting robbed the guy that had a hundred and twenty dollars in his pay packet It was the company man the guy carrying the motherload of pay packets He was the guy that was at risk So naturally when the banks proposed the idea of direct deposit every company with more than 25 employees Jumped right on board, but the banks of course had ulterior motives And don't they always because now for the first time in Latin America

[07:19] The common worker was actually signed up as a client in the bank willing or unwilling because you see as a rule Latin workers really distressed a banking system because banks down here seem to come and go seasonally like Venerio warts and Everybody and I mean everybody knows at least someone who lost a big chunk of funds in a bank failure So until this direct deposit system came along there weren't very many banks at all in Latin America Well, not like these days where it seems like there's a bank on every corner But before the direct deposit system there really weren't that many banks Oh, there were the usual suspects the import-export banks and such and there were always a few first world bank franchises for international exchange

[08:05] like Lloyd's Bank Scotiabank even Citibank And of course, there was always those corrupt national banks that handle a local currency ones like Banco Angelo in Costa Rica Which was once the third biggest bank down there until one day I woke up and saw the morning papers and Read that all 12 board members had fled the country with a few hundred million dollars and were now on the run and wanted by Interpol And that story is not unusual It's happened in every single Latin country and the funny thing is after a few years When everybody's kind of forgotten about the last big bank scandal it happens again and always with a new bunch of Politically connected insider crooks and yes folks. That's why they call it the third world it's a lot like what happens with first world banking crooks like in our financial crisis right now only on a smaller scale and

[08:57] Because of the pathetic frequency of bank crashes in Latin America The common man is very leery of banks which meant up to a few years ago more than half the population of Latin America Didn't even have a simple past book savings account. Ah, ha but then came the direct deposit system And suddenly banks have signed up millions of extra clients mostly unsophisticated clients the kind they never had before and are easy to take advantage of and twice a month right around payday They've got all that payroll money just sitting in their accounts and of course if you know anything about banks You know that they make most of their money on credit card interest overdrafts Mortgages and loans and any number of odd services and penalties

[09:43] they've somehow figured out how to tap you for and now that these Latin banks had all the unwashed masses signed up for a Direct deposit scheme it was only a matter of time before your friendly banker could work you into the world of debt Starting of course with a checking account and a debit card Two things which more than likely will lead the common man into overdrafts interest charges and penalties any bank spread and butter But back to your house construction job and your workers now Like I said over 25 employees and you got the direct deposit system But since you'll probably only have a dozen guys on your job every 15 days They'll get a check or a pay packet old-fashioned style now another funny thing about Latin American workers

[10:29] Is that they only seem to be loyal to the person that pays them and generally you the expat? Won't be the guy that pays the workers directly and what you might find out someday is that those workers are not Necessarily loyal to you you might be paying the bills But if you don't pay the workers directly, which you probably won't to them You'll just be a foreign guy who comes around the job once in a while who has clean shoes and much better clothes than they ever had The fact is you personally won't be handing them the pay packets Instead every once in a while you'll have some money Transferred to your architects bank account or your building foreman's account and in turn one of those guys will make out the checks Or the pay packets every 15 days and distribute them

[11:16] But remember what I said you may be the owner of the project mr.. Expat money bags But whoever pays these guys Meaning the guy that physically hands the dough over to them That's their real boss, and that's who they'll be loyal to not you mr. Expat which leads me to a funny story and a great example of how this works Now an expat friend of mine down in Costa Rica was building a single-family house for himself on a beautiful beach in Guanacaste Now about six months into the project when the house is about half done Things were going smoothly and my expat friend had to go back up to the United States for about a month and of course his House construction project in Costa Rica kept rolling along now on this project my expat friend didn't have an architect

[12:04] But he had a very good contractor who was boss of the project and in charge of paying all the men So after his one-month visit to the United States my expat friend came back to Costa Rica and went directly down to the job site early on a Monday morning and As he drove up he was shocked to see there was no one at the job site at all So he drove a mile or two into the nearby town and on his way to the house of the foreman who happened to live In that town he saw six or seven of his workers sitting outside on a table at one of the local restaurants and he pulled right up and Grilled the guys about not being on the project and they told him that the week before They hadn't got paid on payday And they weren't going back to the job till they got their money and my expat friend said go back to work right now

[12:54] Don't worry. You'll get paid and they didn't budge With that he was about to go ballistic So he jumped in his car and practically flew over to the house of the foreman Who happened to be in his own little living room watching TV with his wife and my expat friend? Sat down with the guy as calm as he could be and asked him what had happened and the foreman told him with a straight face That he was sorry, but something bad had happened and he no longer had the money And he admitted that right after the expat had left for the United States He'd gone over to one of the local casinos got drunk and blew the four thousand dollars His expat boss had given him to pay the workers salaries for that month and at that moment on hearing that the guy's wife stood up all stressed out and nervous and

[13:45] She admitted to the expat that her husband didn't blow all that money at the casino after all and that he had lied He only blew part of it She said he still had some of the money left and she knew where it was and that started a little yelling match between them And that's when the expat blew his top. He said look, I don't care about your excuses or how you lost the money You owe me four thousand dollars. There's twelve guys out there that haven't been paid for a month My house is behind schedule now, and I want to know how you're gonna pay me back And then the contractor said to him with a straight face. Okay, I'll make a deal with you I've got twelve hundred dollars left How about I give it back to you right now and we'll call it even and I'll round up the men and we'll get back To work and finish that job now my expat friend really couldn't believe his ears

[14:33] He was a contractor a good contractor, but an obvious thief Sitting here with a straight face trying to make a deal with him Then the expat argued with him saying no way that someone working for him was gonna stick him for twenty eight hundred dollars and the Contractor grinned at him and said look I've only got twelve hundred dollars And if you don't want the deal fine, but your house is not gonna get built not by my crew It won't and the expat said what do you mean your crew? I'm the one who pays them They're my crew and then the contractor gave the expat a lesson in Latin American culture He said look these are my workers I've worked on and off with these guys for years and years and when payday comes I'm the one who pays them and sure it's not my money. It's always somebody else's money like on this job

[15:21] It's your money But to them you're just some guy that comes around once in a while and checks out what's going on on the building site And me I'm the guy that pays them. They don't care where I got the money They just know that I'm the guy that pays them so go ahead and find another crew if you can But those guys work for me, and then he said you should really take the twelve hundred dollars That's my offer Then we can all get back to work and we'll forget about all this and start fresh and get the job done right on schedule And the expat thought to himself you know what this is extortion, but the guy was right That's how it's done in Latin America The workers are only loyal to the guy that pays them and my expat friend well of course he took the deal And he wasn't happy about it And he never took another vacation as long as that house was under construction

[16:07] And in the end the house did get done on time and on budget and there were no more incidents like that So we learned a small lesson about Latin American culture, and it only cost him twenty eight hundred dollars And when you think about it a twenty eight hundred dollar loss on a hundred fifty thousand dollar project Well most people including me would be ticked off But you can live with that and you know what that contractor was so good at his job That the expat had other projects, and he used them over and over again now if that had happened in the first world I guarantee you that story would have had a completely different ending But you know what that story also tells us a lot about Latin women It's obvious the honorable one in that family was the guy's wife who instead of sticking up for her husband

[16:55] Stuck up for what was right, and you'll find that to be generally true throughout families in Latin America It's the women who constantly have to put up with the little scams and schemes that Latin men like to hatch and in the end It's a real education for expats who tend to be trusting and in fact sometimes naive Especially when they enter into building projects and business deals with Latins So the moral of that story is never advance more money to your building contractor or architect Then it's absolutely necessary to cover bills expenses and purchases for the upcoming 15 days in that way you'll cut your losses if something odd like this happens to pop up and One thing you have to remember the people down here aren't naturally dishonest

[17:41] Although you might think otherwise after the first few times you've been ripped off Well the truth of it is in the overwhelming majority of cases The Latins in general are really not out to get you nor are they looking for ways to screw you like I said Before they really admire expats gringles and anyone from the first world. They want to work for you and be your friend In fact, it's a feather in their cap to have you as a client because for one thing Expats have a very good reputation for keeping their word paying on time and actually having all the necessary money to take a project all the way through to completion which believe me is No small thing considering if you drive around Latin America You'll see dozens of half-built projects that started with all the best of intentions that were abruptly stopped and abandoned

[18:28] Just due to bad planning wishful thinking and lack of money So what I'm saying is these men aren't inherently dishonest and let me give you an example here when a humble worker who makes two or three or four hundred dollars a month suddenly has $4,000 in his hand at one time which is like a year's salary for him and Suddenly, he's told that his boss will be away for a whole month and that's you the expat Well, the temptations can be tough and anything can happen I mean think about it yourself think about someone in your own immediate family up in the first world Let's say it's your own brother who you pretty much trust, but let's say he has a few vices Especially when he drinks now suppose one day you gave him a year's salary in cash a first world salary

[19:16] Let's say forty or fifty thousand dollars, and then you took off for a month now The chances are good that when you come back He'll still have your money for you, but what if while you were away his girlfriend broke up with him He went on a drinking binge, and he lived close to Las Vegas You never know okay enough said about that. Let's move on to another construction related point I got an email about water heaters. You know what's available, and what do they use down in Latin America? Aha now here's an interesting topic although to the uninitiated it might seem boring. It's not Because 90% of the houses in Latin America make that 95% of the house in Latin America They do not have whole house central hot water heating that is to say they do not have a standing hot water

[20:05] Tank anywhere in the house although of course you will see them being sold in hardware stores throughout Latin America But pretty much only in the hardware stores like Ace Hardware I'm saying that you'll find those good old standing hot water tanks at First-world style hardware stores and therefore they handle all the products their hardware store chain carries up in the first world Including a lot of first-world stuff like garbage disposals trash compactors and hot water tanks And the funny thing is even though these first world hardware store Franchises stock these things I know for a fact that they can't be selling much of that stuff down here Except to expats and that tiny percentage of well educated wealthy people Who've actually traveled to the first world enough to know what that kind of stuff is and how to use it, but of course

[20:56] Everybody loves a hot shower and a hot bath even in Latin America So what happens if you don't have that good old hot water tank in the house? Well, the fact is those 95 percent of houses in Latin America that don't have standing hot water heaters Do have hot water in the shower thanks to a little electric device installed on the shower head Called a point of use water heater which costs about 15 to 25 dollars in any hardware store And that's a price even the poorest family can afford Even a guy making 200 bucks a month can eventually fit that into his budget And i'm telling you the first time an expat sees one of these things he just about freaks out Because they just look as dangerous as hell And believe me they are because the truth is I don't know anyone latin expat or even me

[21:46] Who hasn't been shocked at least a half dozen times in the bathroom? These things are 220 volt devices at high amperage easily enough to kill a cow And they're not in any way connected to a ground fault interrupter Which is required for any electrical appliance in a kitchen or bathroom up in the first world And speaking of ground fault interrupters You know what they are those special electrical outlets you find in your kitchen and bathroom With a little red button that instantly pops if there's any danger of a grounding problem Well, you know what in all my time down here I've never seen a ground fault interrupter except in the bathrooms of some first world hotels So once again latin america is at least 20 or 30 years behind the times Because those little ground fault interrupters that cost maybe 10 or 15 dollars each

[22:34] Are absolutely required by law in the first world because they save lives But you know what you can buy them down here I've seen them in hardware stores, but no one down here not even most electricians know what the hell they're for It's something that the average guy has no idea even exists Okay, but let's get back to those dangerous little electric showerhead water heaters So what you have inside these things is an electric coil where water passes through and gets instantly heated Think of a smaller version of an electric stove element with water passing through it while it's hovering about four inches from your head Now normally, I guess these things are safe enough because these days the housings are 100 plastic So it would be quite difficult to imagine getting a shock

[23:21] But a lot of houses still have the older ones And i'm talking about ones that were installed maybe 10 or more years ago and these things have a lot of metal on them So if one of these electric showerhead heaters is installed wrong It's very easy to see how you could get electrocuted And i've had some pretty damn good shocks myself without even turning the water on And that's because like I told you in a past show There are virtually no inspectors to inspect an electrical installation whether it's a house or in an office building So you're always at the mercy of the guy that installed this electric showerhead And the problem is it's almost never an electrician who installs it It's always some local neighborhood handyman a jack of all trades who learned everything as he went along

[24:06] And you can see how that could be dangerous and add that to the fact that maybe 95 percent of the houses in latin america Do not have a three-wire grounded electrical system like we have up in the first world In fact almost every house more than 10 years old has only the old style two-prong electrical outlet system And if you're familiar with that kind of stuff, that just means there's no earth ground green wire Which in the first world leads from every electrical outlet to a copper rod buried deep in your backyard And that's a required system in the first world which provides an extra measure of safety when using any electrical appliance Now these days electrical codes in latin america do specify a three-wire grounded system like that

[24:51] And in all new constructions anything within the last 10 years buildings and houses always have that three-wire system But everything else more than 90 percent of the rest of latin america Still has that old archaic two-wire system the one you might remember from your grandma's house You might remember that in some of the old houses up in the first world when you tried to plug in a three-prong new appliance You found the plug wouldn't go into the outlet because it only had two holes So in order to get it to work you had to go out to the hardware store and buy one of those little cheater plugs Which converted three prongs to two prongs? Anyway, it mystifies me and so many other expats why people aren't getting electrocuted on a regular basis in their bathrooms And what's even more amazing is that a lot of middle grade hotels not the high-end ones, but the middle grade ones

[25:41] Well, they too will have that same funky dangerous shower head system And to tell you the truth those things still scare the hell out of me and a lot of expats At least thank god with the newer ones You don't have to touch them at all or flip a switch to get the hot water to work Which means theoretically you have a much less chance of getting a shock I hope and how they work is as soon as you turn the shower water on a pressure sensor inside Activates the unit and your water immediately turns hot and I mean instantly And the way you regulate the heat is by water flow So when there's a little water you get a very hot shower and when there's a lot of flow it's lukewarm But luckily if you're an expat building a house or you buy an existing house

[26:26] You have other much safer options than those terrible things In fact nowadays on the market down here. They have a lot of point of use gas water heaters And by that I mean gas propane because no one has natural gas piped into their house But a lot of people have a 25 or 100 pound tank of gas propane for cooking and those gas water heaters And those gas water heaters are tiny and very safe and tremendously economical And the reason only a small percentage of people have them is because they're about 10 times as expensive as that crummy electrical job But they're worth it in the long run because you do save a lot of money with them And of course, there's no chance of getting fried And believe it or not a lot of these brands come from europe where these things are really popular

[27:15] So, you know, they're good quality. I have one from germany myself It's called the youngers and it's a whole house model and very efficient. I wouldn't be without it In fact, I don't know why these things haven't caught on big in the first world yet But sooner or later, I guess they will So You've been listening to the expat files living in latin america And don't forget you can email me about any question you have about latin america That's the expat files at gmail.com See you next time