The Socioeconomic Inequalities in Mexico and How the Government Can Change

KATIE MITCHELL


To what extent, and in what ways, do persistent poverty and socioeconomic inequality affect how democracy functions in Mexico today? What policies would be most effective in reducing such inequality?

 
Socioeconomic classes have segregated the people of Mexico ever since, and certainly before, 1910 (429). During this great “social revolution,” often considered the first of its kind, “nationwide civil conflict” erupted from the country’s ruling class who “saw their future opportunities for economic and political mobility blocked” (430) by the oppressive government at the time. Note that these social evolutions did not originate with the impoverished or the downtrodden, but instead those who desired the expansion of their own interests. This aside, democratic functions in Mexico have been hindered by the perpetuated inequalities between socioeconomic classes, and while this problem is not new, it is also certainly not going to pass on its own. The Mexican Federal Government needs to instate several strong policies to combat the following injustices.

The first and most blatant injustice in terms of poverty in Mexico is the state of the economy: "The vast majority of Mexicans suffered severe economic pain… …directly attributable to government mismanagement of the national economy. Millions of jobs were lost, real wages were stagnant or declining… …savings and businesses were decimated by inflation and currency devaluations, and government benefits for the middle and lower classes were slashed in the austerity budgets necessitated by the economic crises" (427).

The economy was manipulated, not just mismanaged. By means of poor investments, treacherous gambling, and inadequate planning, Mexico’s financial stability is seemingly nonexistent. In fact, by 1938, the economy was considered to be at its peak and since then, economists have designated it to be in a state of “retrogression” (430). Jobs have been lost, foreign investments have dwindled, and international trade has been stifled, leading to poor living conditions for the majority of Mexican citizens; the bottom 20-percent own a mere four-percent of the country’s wealth.

The true economic crisis of Mexico, however, came in the early 1980s under the rule of the Institutional Revolutionary Party (PRI), in which the prices for Mexican oil fell dramatically, causing the state to default on many of their international loans. As 1982 came to a close, Mexico was $80 billion in debt with approximately 40-percent of their export profits covering the interest payments. In attempts to reduce state spending, the government cut funding to programs of great importance to the Mexican people, including social welfare. Many workers were laid off and the traditionally standard of living was drastically undermined. Economic reform was of upmost importance, while the security and equality of citizens fell by the wayside, along with any semblance of political reform. “When walking in the streets of Mexico City, one quickly becomes aware that there exists an economy that is not recognized, licensed, regulated, or ‘protected’ by the government." This imbalance in power and structure can only divide citizens by their natural socioeconomic status and limit the power of Mexican democracy.

Finally, the recent Mexican drug war plays a large role in the imbalance of power and the inequalities permeated throughout society. Cartel leaders use valuable resources not only to push drugs, weapons, and money, but also to create war with the government. While Felipe Calderon did begin a major crackdown in 2006 on the drug cartels and those politicians involved in drug scandals, backlash from the gangs has been just as severe as ever. That is not to say there is not hope for change. Just as Venezuela has made a significant transition from a party-dominated, corrupt, drug-laden country, Mexico too can take strides to better discipline its government, police, and citizens so as to eliminate the extrapolation of basic resources from the middle and lower classes, as is often done. While divided socioeconomically, democracy does not have to suffer and poverty does not have to flourish. The following strategies can further aid Mexico in its quest to repair democratic functions.

In reducing these many inequalities, Mexico must put into place several long-overdue policies and take significant steps towards a more legitimized, stable system of government. Firstly, they must catch-up with international trade markets (428). China has risen exponentially as a major competitor in the global markets and if Mexico wants to compete, especially within the North American Free Trade Agreement, they must “deal more directly with the global economic system.” Additionally, they must modernize to continue to compete with the United States and Canada, especially within their agricultural sector (428); Mexico needs to make their agricultural goods cheaper and engage in more effective methods of production, much like their NAFTA partners have already done, if they hope to stay afloat in a fluctuating international market.

Secondly, Mexico needs to revamp its “antiquated and inefficient labor law[s]” (428) in order to spur greater amounts of job creation as well as more equal worker protection. These changes of law are especially needed in the energy sector, an ever-expanding industry. When dealing with oil, natural gas, and electricity, either government spending on their expansion should increase or private and foreign investment should be considered. While this may call for specific and tedious constitutional changes, some of which not all citizens may agree with, they have the potential to be vital policies aimed at reducing the significant economic inequality Mexico is facing today.

Thirdly, the Mexican Federal Government desperately needs to “expand the tax base to provide the resources needed to address all of these issues” (428), namely socioeconomic inequality. In adapting this tax base across the widely diverse wealth gap, those in poverty will have the opportunity to benefit from a government with money to pump back into the economy in a fiscally responsible manner. Persistent poverty can only be remedied by putting money into a social welfare system so that it can in turn be spent on imperative resources to assist in one’s daily life.

While a not a change in policy by nature, the accountability in political campaigns should also be reevaluated (428). Many “loopholes” exist in terms of government-backed financing for reelection campaigns of the party in power’s candidate of choice. These loopholes should be closed, by which would create a more responsible, transparent, and ultimately democratic electoral system. This more true form of governance would go a long way in terms of proving the legitimacy of the Mexican Federal Government and its ability to eliminate inequalities among its people; if the legislators can spend their money in an unbiased manner, those policies are more likely to carry over into their own legislation.

The Mexican government undoubtedly has problems. Not only are they fighting a major drug war, but they have also previously been heavily impacted by economic crises, political instability, and a deep wealth gap among their citizens. These are not simply problems to rectify, but by following the aforementioned strategies, Mexico can see considerable improvement in the management of the economy, can stimulate both internal and international growth, and put an end to the socioeconomic injustices felt by so many of the Mexican people. In this way, the opportunity for true democracy can flourish.



Works cited: Wayne A Cornelius and Jeffrey A. Weldon, "Politics in Mexico." In G. Bingham Powell, Jr., Russell J Dalton, and Kaare Strom (eds.), Comparative Politics Today: A World View (Boston: Longman, 2012), 426-469.