Mexico’s Wages 2018-2024: To Change So That Everything Remains The Same

Real Wages appear to remain dwindling crumbs in an ethos of Neoliberal Populism — The rhetoric end of the Modern Slave Ethos advanced by the “progressive” wage policy of Mexico’s new government is a travesty of what it boasts to portray.


Álvaro J. de Regil


Conclusions

• The campaign promise on wages was not fulfilled. The real wage increase was substantially smaller than what was offered during the electoral campaign.

• There is no political will to make a minimum wage recovering policy a firm commitment by passing specific legislation for that end.

• The general wage increase benefits only one-sixth of salaried people for it was strictly limited to the general minimum wage, relegating the 59 minimum wage rates for professional activities to an increase to offset CPI inflation, the same wage contention policy of the last 36 years.

• It would be a great mistake to eliminate minimum wage rates for the 59 professional activities; activities require greater physical and intellectual capacities and skills than those required for activities of the general minimum wage. Assigning the same compensation criteria to professional activities would not only be greatly unfair and further depress their purchasing power and quality of life, but they would have a profound and negative multiplying effect in many other activities that require greater capacities in the upper echelons of skilled work, particularly in the manufacturing sector, which receives the highest labour compensations.

• López Obrador recanted on his commitment to recover real wages and returned to the neoliberal dogma, for he returned to conditioning any increase of wages to a concurrent increase in productivity. This sets a very ominous precedent that can only be construed as a recantation of his view on the need to address the fact that wages have lost 75% of their purchasing power as a result of a deliberate policy of wage pauperisation.

• López Obrador has established a strong partnership with the historic predators of real wages. The strong personal partnership of López Obrador with the business oligarchy, his old nemesis, can only be construed as an alliance to support the very group that has fervently worked with previous governments to deliberately pauperise wages for the last thirty-six years.

• From the global economy perspective, manufacturing wages will remain at their lowest level in the manufacturing sector, because if professional minimum wages remain losing value, higher skilled wages in the manufacturing sector, integrated with the global economy, will remain at the same level they have been since the 1990s after they were deliberately pauperised to become the main driver of foreign investment with NAFTA.

• Unless there is radical change, Mexico will lose manufacturing share under the new NAFTA. This is a particularly important issue, in light of the new NAFTA 2.0, which incorporated an agreement to increase the North American content.

• The above notwithstanding, López Obrador still has ninety-five percent of his term to amend his policies and attempt to truly transform the country by replacing the structures of exploitation and depredation with a radical new paradigm in pursuit of the welfare of people and the planet and NOT the market. We remain in hope.


Analysis prepared in February 2019.. For a full review of this essay, click here or on the picture to download the pdf file.