Pessimism Pervades Mexico as Economic Promises Fall Short

9/1/15 The New York Times

Data from INEGI
Data from INEGI

Jesús Rascón embodies the sort of success story that was supposed to epitomize “Mexico’s moment.”

The plastics company he founded 13 years ago now employs 350 people in two factories. He sells parts to global companies like Volkswagen and Whirlpool. Even the slide in the value of the Mexican peso this year works in his favor because it makes his products cheaper overseas.

Then why is he feeling so glum about Mexico’s economy?

In a word: poverty. “Unfortunately the problem in Mexico is the wage rate, which is enough only to survive,” said Mr. Rascón, 48. Unless people have money to spend, he added, the companies that sell to them will never be able to expand the way his has. Such economic pessimism is pervasive across much of the country as President Enrique Peña Nieto prepares to reboot his presidency midway through his six-year term.

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UPCOMING EVENT! Inequality in Mexico

social classWHEN: Tuesday, July 7, 9:00-11:00am

WHERE: 5th Floor Conference Room, Woodrow Wilson Center, Washington, DC

Click here to RSVP.

Mexico’s economic inequality has inhibited the country’s economic growth and slowed the potential of its social and human capital. And extreme inequality has worsened over the last 20 years, with economic elites capturing most of the benefits of growth. The political and economic implications are huge.

Oxfam Mexico recently issued a study on Mexico’s inequality and its policy implications, and the study’s findings will be presented and discussed at this forum on July 7, 9-11am. The study was authored by Gerardo Esquivel, professor and researcher at the Center for Economic Studies in the Colegio de Mexico.


Ricardo Fuentes-Nieva
Executive Director, Oxfam Mexico

Marjorie Wood
Senior Staff Member, Global Economy Project, Institute for Policy Studies


Duncan Wood
Director, Mexico Institute, Wilson Center

Click here to RSVP.

Mexico’s Extreme Inequality: 1% Owns Half of Country’s Wealth

6/25/15 teleSUR

Photo by Flickr user Aleiex
Photo by Flickr user Aleiex

Extreme inequality has increased in Mexico while the economy has stagnated, concentrating almost half of the country’s wealth in the hands of its elite 1 percent, according to a new Oxfam report. According to the report, the wealth of the Mexico’s 16 billionaires multiplies five fold each year, while the country’s GDP increases by less than 1 percent annually. Mexico is among the top 14 richest countries in the world by GDP, yet over half its population, or 53 million people, live in poverty.

The report states that one of the most serious aspects of inequality is unbalanced income distribution, which is becoming more pronounced. Mexico’s telecommunications tycoon Carlos Slim is the second richest person in the world. His estimated 5 percent return on wealth alone could cover the cost of some 2 million low wage workers at the minimum wage rate of US$4.50 per day. The wealth of Slim and just three fellow Mexican billionaires account for 9 percent of the country’s GDP, equivalent to the income of nearly 20 million Mexicans on the other side of the inequality equation.

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Más de la mitad de los niños mexicanos viven en pobreza

education - children poverty - EcuadorAnimal Politico, 4/30/14

El 53.8% de los niños que celebrarán este 30 de abril el Día del Niño en México son pobres y viven con al menos una carencia que les dificulta el correcto ejercicio de sus derechos sociales sociales, informaron este martes el Fondo de las Naciones Unidas para la Infancia (Unicef) y el Consejo Nacional de Evaluación de la Política de Desarrollo Social.

Pero además dentro de ese grupo de 21.1 millones de niños, niñas y adolescentes, hay 4.7 millones —12.1%— que vive en pobreza extrema, es decir, que tiene al menos tres carencias que le impiden disfrutar de sus derechos fundamentales.

“La pobreza en la infancia tiene características específicas que le dan a su atención y reducción un sentido de urgencia: la probabilidad de que se vuelva permanente es más alta que en el caso de los adultos, al igual que la posibilidad de que se reproduzca en la siguiente generación, además de que las consecuencias negativas que ocasiona son irreversibles en la mayoría de los casos”, indica el informe Pobreza y derechos sociales de niñas, niños y adolescentes en México, 2010-2012 que presentaron Unicef y Coneval.

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Trickle Down Economics: Can Fair Trade Coffee Save Mexico’s Poorest State?

chiapasFox News Latino, 01/22/2014

Standing alongside a dirt road in the steep hills outside of Ocosingo, a town in Chiapas, in southern Mexico, Diego Méndez Gómez, a skinny 13-year-old coffee farmer pointed down at the colonial town center, a bumpy 40-minute truck ride away. “I used to go to school there,” he explained. Now he helps his father tend livestock, grow vegetables, and cultivate coffee. He left school a year ago, at age 12. On the hillside above, a man walked a donkey up the incline, past a patch of corn plants and a few small wooden houses with corrugated steel roofs. It’s Manuel Gómez Guzmán, a 35-year-old butcher who works in the colonial city of San Cristobal but travels to visit his parents outside Ocosingo. “We live from coffee,” he explained. Every year Gomez’s parents grow about 450 pounds of coffee, a yield that earns them a few hundred dollars of cash income. “I come to help them harvest and then go back [to San Cristobal],” Gomez explained. Behind him, an array of light tan beans sat under the hot sun on a tarp on the dusty road. “The beans take about four days to dry out,” Gómez explained.

Chiapas, Mexico, is coffee country, supplier of premium beans to boutique coffee brands and major international companies such as Starbucks and Nestle. But Chiapas is, too, home to many of the poorest towns in Mexico, despite concentrated efforts to invest following fair trade and sustainable production guidelines.

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Op Ed: Mexico Suffered, and the United States Felt Its Pain

The New York Times, 11/24/2013

By Laura Carlsen

NAFTANafta is limping toward its 20th anniversary with a beat-up image and a bad track record. Recent polls show that the majority of the U.S. people favors “leaving” or “renegotiating” the model trade agreement.

While much has been said about its impact on U.S. job loss and eroding labor conditions, some of the most severe impacts of Nafta have been felt south of the border.

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New Article: Mexico’s Latest Poverty Stats

Mexico CityBy Chris Wilson and Gerardo Silva, 8/12/2013

In July, Mexico’s National Council for the Evaluation of Social Development Policy (CONEVAL) released new statistics on poverty in Mexico. They show that Mexico’s poverty rate fell slightly between 2010 and 2012, dropping 0.6 percent, from 46.1 percent to 45.5 percent. Nonetheless, during the same period the number of people living in poverty actually increased from 52.8 million to 53.3 million, since the overall population of Mexico grew from 114.5 million in 2010 to 117.3 million in 2012. The results, then, are mixed. The poverty rate declined, yet the number of poor increased. Extreme poverty, on the other hand, clearly declined. Both the number and percentage of Mexicans living in extreme poverty fell between 2010 and 2012,  from 13.0 million (11.3 percent) in 2010 to 11.5 million (9.8 percent) in 2012.

Still, a deeper look into the components of Mexico’s multidimensional poverty measurements reveals a troubling issue. Despite the overall decline in poverty shown with the multidimensional measure, poverty as measured solely by income continues to rise. That is, even as access to things like education, housing, and healthcare improve, and even as the overall economy is growing, Mexico’s poor are not seeing their incomes rise as quickly as prices. This short article will first briefly explain the various components of Mexico’s poverty measurements and will then explore some potential explanations for the contradicting trends in income‐based poverty and multidimensional poverty.

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