Question

Companies from the United States have built many factories in Mexico near the border. Why have so many U.S. factories moved to Mexico?

Answer 1

Many companies from the United States, building their factories in Mexico because of the availability of cheap labor. Mexico can provide cheap labor for the industries because of fewer job opportunities or productive in its country. Mexico also charges low taxes to the foreign industries, which encourage American companies to open its factory with less restriction and laws. These companies are looking for a way to make more profit by paying less and producing more.

Answer 2

The correct answer is - the labor force is cheaper.

The living standard in Mexico is much lower than the one in the United States. In accordance to it, the wages are much lower as well, so the labor force is very cheap when compared with the labor force of the United States.

In order to increase their profit, lots of companies have moved and made facilities in Mexico, so for the same work, they are paying the workers much less, and all owners would prefer that the same job is done for lesser amount of money.