Money on Monday On Sunday: Even the Scrap Dealers are Feeling the Pinch
The worldwide economic crisis brought on by our sub-prime mortgage issue has repercussions down to the lowliest among us. Alex Nading who is getting his doctorate in anthropology from Univ of Wisconsin-Madison reports that "the economic crisis has had immediate consequences for junk dealers around the world and for informal scavengers and brokers right here in Nicaragua ('chatarreros").
Nearly all the scrap steel, aluminum cans and siding, copper, and plastic sold here gets exported. The garbage trade here grew tremendously from about 2002 to 2008. (A popular legend among scavengers has it that the scrap metal they collected was going to China to help build the Olympic stadium.)
Before the meltdown prices were at an all-time high. In just the last 6 weeks or so, locals reported they have dropped to a 6-year low. This means that people who, two months ago, could make a living and feed a family scavenging through garbage now can't make out. It also means that those who opened up small local junk brokerages (often with the encouragement of larger firms) are having to shut down.
This is already having a tremendous impact on the local economy and on local politics.
The scrap market is notoriously volatile, but in this most recent downturn, it has effectively cut a great number of informally employed Nicaraguans out of the global economy. Theirundocumented labor helped fuel the massive building boom, in Beijing and elsewhere. Lives have been overturned in an amazingly short time by the meltdown, especially considering that the food and oil crisis struck so (relatively) slowly down here".
Why am I reporting about junk dealers in Central America? I feel that it is important for us all to know what is going on elsewhere and to those already on the margins.