Socio-Economic Issues in Mexico

Latin America is known to have inequalities in socio-economics. As a result, social and political policies have radically affected different classes in different ways.

In most Latin American countries like Mexico, unvarying systems of socio-economic stages exist.  Mexico, Venezuela, and Paraguay all belong to C2 levels while other parts of Mexico belong to C3, together with Brazil and Puerto Rico.

Level C2

• Living in relaxed ways
• Receiving middle earnings at work
• Works in middle range industries
• Enjoy few of the good things of life
• Able to meet their primary needs
• Live in separated residences or modern buildings in middle-housing areas

Level C3

• Public positions depend on economic condition.
• Able to enjoy some ease but at the price of financial sacrifice
• Able to just meet their primary needs.
• Workers of small business or casual corporations
• Low or middle income
• Big family sizes
• Live in a greatly occupied area
• Live in apartment buildings or small detached houses

Basing on the information presented above, income variation is the main point of this socio-economic inequalities. Why should we be bothered on the inequality of wealth?

See, for example, a market selling luxury goods is limited to those who can meet the expense to compensate; thus, a great number of rich populations will yield higher and maintainable incomes. However, behind the picture, there are also issues concerning moral and social fairness.

If inequality in wealth were exclusively the outcome of personal selections about labor, sweat, and investments, subsequently people will be obtaining what they wish and merit for. Moreover, if wealth inequality is due to either the inheritance of past problems or modern corruption and lack of transparency, this will turn out to be a major social and political headache.

Frequently ignored but related cases that create wealth inequality are corruption and drug trafficking.  This illegal means has become a widespread practice in some countries.

In 1980s and early 1990s, drug traffickers in Mexico have already established an infrastructure preparing to serve the Colombian-based traffickers.  In the mid 1980s, organizations in Mexico were well-established and reliable transporters of Colombian cocaine were made. This has ended with the fighting between rival cartels due to information leaking to the government by the other rivals.  The fight between rival drug cartels began in the late 1980s and the violence steadily worsened in 2000.

An armed disagreement is taking place between the government forces of Mexico and competitor drug cartels, which is popularized as the Mexican Drug War.  Drug cartels are in existence for some time now as this became more powerful when Colombia’s Cali and Medellin cartel’s ended in 1990s.  The Mexican drug cartels dominated the wholesale of illegitimate drug market in the US today.  Drug violence increased when the key leaders were arrested.

The International Narcotics Control Board reported that corruption remains a serious problem in the country no matter what actions, they take to reduce it.  Some Federal Investigation agents are believed to be part of one of the known cartels of which they act as the cartel’s enforcers.  In addition, an estimated count of 1,500 agents was under investigation for suspected criminal activities and 457 faced charges in December 2005.  The anti-cartel act was then operated in December 2006 to ensure that police and government agencies are free from cartel involvement.

In the early part of 2009, Mexico was rapidly falling apart as the drug war escalated with no relief. The country experienced the rising number of violence caused by drugs, kidnapping, assassination, extortion, homicide, and assault.  Five thousand Mexican army troops were called in by President Calderon. The United States also added troops to protect themselves from the violence in Mexico as Latin Americans might go out in the open and spill over the U.S. border.  So far, this year, an average of 6.8 people was murdered each day in Mexico and around 14,000 people were killed since Felipe Calderon started his term in December 2006.

The geographical location of Mexico has long been used as a point for illegal migrants, narcotics, and other smuggled goods intended for the US. They come mainly from South America, Mexico, and some other parts of the neighboring countries.

Mexico’s Employment Situation

Early in November 2009, the Mexican government announced that the country had 120,000 new jobs created in September and October.  The new jobs brought about a 2.7 per cent improvement in the country’s economy, which has been considered in a deep collapse just the quarter before.

However, this is primarily because of the Mexican government’s US$4.83 billion in loans extended to small business and midcaps.  As with any economy, it is the smaller businesses that drive economic growth.

Things might not be as rosy as the Mexican government paints it to be.  For one, the economy’s improvement is also rooted in the improvement of the United States, a trade partner that buys more than three-fourths of the country’s export products.

Before everything else that happened, the Organization for Economic Cooperation and Development has a better outlook for Mexican employment.  The country’s unemployment outlook for 2008 was placed at 3.3%, a better rate that the organization’s average.

Blatant Discrimination

However, what is more alarming with the OECD data is that they found that the country has a glass ceiling when it comes to employing women.  Mexico, despite the improved employment rate, also had the most dismal employment statistics for women.  Only less than half of Mexican women who belong to the working age group are employed.  More than 90% of adult males, on the other hand, are employed.

Policy-wise, the government has been lax or passive with regard to fighting this proof of gender discrimination.

Informal Employment Is Prevalent

Informal employment is when an employee takes on a job that has low salaries and yet does not get a formal contract or any type of benefit.  It is estimated that more than half of the workforce in developing countries are informal workers.  Mexico is not an exception.

Even as the Mexican economy is showing signs of improvement, the underlying dynamics of having a prevalent informal employment system speaks volumes.  What’s more, informal employment abuse the rights of the already disadvantaged worker groups like women, older workers, younger workers and those who have no skills.

Brighter Future Ahead?

Hopefully, the Mexican government’s current thrust on small and medium sized businesses will help stem or reverse discrimination against women of working age.  If a capable female cannot find a job, she can easily get government funding to start her own business.  This would also help curb institutional discrimination against hiring members of the fairer sex.

Also, better governmental policies aimed at cracking down on informal employment, putting up more stringent measures and implementing higher punitive penalties for companies and industries with informal workers should help the country handle the high rates of informal employment.

Furthermore, the emergence of new and smaller ventures just might help with the informal employment situation.  With government funding requiring new businesses to be registered, they should be under closer scrutiny from the concerned agencies.

With the United States economy also in dire straits, more and more Mexicans are looking for jobs at home, rather than thinking about seeking greener pastures in America.  The Wall Street Journal reported in February 2009 that only a little more than 700,000 Mexicans was caught trying to sneak into the U.S. in 2009, a far cry from the 1.1 million figure just two years earlier.  Pew Research also reported that 8% of foreign-born Hispanics in the U.S. are jobless as of the last quarter of 2008, climbing from 5.1% just a year earlier.

As such, the Mexican government should be ready for an influx of workers coming home from the United States, or those that are staying put.  It should look for more initiatives that would duplicate or further its success in creating more than 100,000 jobs in less than two months.  Only then could it sustain or foster economic growth.

Once jobs are continuously created and more capital is infused in mid caps and small caps, the government should then look into creating new policies or enforcing existing ones that would promote gender equality in the workplace and eradicate informal employment.  Both measures will surely strengthen the Mexican economy further by ensuring that more people get the job they deserve, and that they are justly compensated for it.  These will increase the government’s tax base, which it could utilize for further growth and more capital.