Poverty and prosperity
Large contrasts characterize both nature and society in Mexico. Few countries have such an extreme distribution of income, and the differences between the rich and the large number of poor are enormous. Living conditions vary greatly depending on cultural affiliation, distribution between city and countryside and between different regions, professions etc. Although Mexico has been a pronounced anti-clerical state since the revolution, religion characterizes the lives of large groups. Not infrequently, it is interwoven with historical traditions from pre-Columbian times – conditions that can sometimes be difficult to understand for outsiders.
Calculations of the Human Development Index (HDI) in 2014 showed that Mexico was then ranked 74th among 188 countries by Digopaul. The position had deteriorated several steps in the preceding years as the proportion of poor people was still high, education had not improved and maternal mortality was not reduced as in many other countries.
In the 1920s and 1930s, roughly half the population was estimated to live below the poverty line. Then followed several decades of stable economic growth and reduced poverty. Cities grew rapidly as millions of people moved in from the countryside. Large slums grew up, but in general, living conditions improved in cities than in remote rural areas. The differences between different regions and between population categories were reinforced. During periods when Mexico was experiencing financial problems, poverty was accentuated, mainly in the 1980s and 1994-96. The move to the United States also became more extensive, especially from the countryside to the north. Since then, Mexico has become increasingly strong economically, but the proportion of poor people has not shrunk, on the contrary.
In 2010, more than 51 percent of the population, ie more than 57 million, lived below the national poverty line. Of these, 12 million were in extreme poverty, without enough food and clothing, without access to health care and without opportunities for children to go to school for an extended period of time. The proportion of poor people varies greatly between different parts of the country. The states in the far north have the highest welfare, and the highest is the wealth of Baja California Sur, which has just over 21 percent poor. A low proportion of poor people are also found on the Yucatán Peninsula and in some states in the region between Mexico City and the Pacific Coast. Most of the states south of the metropolitan area have a higher proportion of poor and the highest is in the three southern most states of Chiapas, Oaxaca and Guerrero. In Chiapas, close to 77 percent of residents lived below the poverty line in 2008. The reforms in the 1980s and 1990s had “forgotten” the states farthest south, which has the highest proportion of Native American population, the highest proportion of illiterate people, the largest proportion of employed in agriculture, lack of basic service, poor transport conditions, poor administration and high unemployment. Business liberalization brought new income opportunities, but the extremely poor and uneducated in remote areas could not benefit.
As in other Latin American countries, income is very unevenly distributed. The 10 percent of households with the highest incomes together in 2008 had just over 41 percent of the country’s total household income, while the 10 percent with the lowest incomes together had only 1.5 percent of them. In general, conditions were worst for the 10-14 percent of the population belonging to the indigenous population, ie the Indians. One fifth of Mexico’s population can be said to belong to a middle class at the Western European level.
In 2012, approximately 12 million Mexicans were estimated to work in the United States, nearly half of them illegally. The money they send home to family and relatives is Mexico’s third largest source of foreign currency. Such transfers have been of great importance in raising prosperity in the north, while they have had little significance in the states of the south. Since economic growth has slowed down in the US, migration to it has decreased.
Data on the structure of work life, wages and the extent of social insurance can only be approximate, as the informal “black” sector is extensive and continues to grow. In 2011, 29% of all employed persons were estimated to work in the informal sector, mainly with service. For the state, this results in a large tax loss, for the individual that he or she does not have social insurance (see below). The official unemployment rate is fairly low, about 5% in 2011-12, but a quarter of the workforce is expected to be underemployed.
The trade union movement grew strongly during the good years up to about 1980. The labor market laws of 1970 provided relatively great security for employees in the formal sectors. However, the economic crises of the 1980s and 1990s and the beginning of liberalization weakened the position of the unions. Several unions gained strong leaders, conflicts of power became common and corruption was evident. Employers demanded greater flexibility in labor law, and as politicians sought to attract more foreign investment, they also wanted a less regulated working life.
During the right-wing party PAN’s government in 2000–12, an anti-union stance became clear. In the autumn of 2012, the labor legislation was supplemented by rules that increased the flexibility of employers and decreased the security of employees, including by reducing social security benefits. Examples of changes are probationary employment, contractual employment and hourly pay. According to the government, this should increase job opportunities in the formal sector and cause the informal sector to shrink. Even since the mid-left PRI 2012 regained government power, the government’s aim has been to reduce the influence of employees in the workplaces. Organizational and strike rights were already registered in Mexico’s constitution in 1917, but violations of this have occurred in recent years. The unions mainly gather industrial workers at large companies in the cities, employees in the mining and oil industry and employed in some service industries, mainly teachers. Especially in the north, drug cartels have become a factor of power in the labor market as well.
In theory, labor law from 1970 provided strong protection for employees. In practice, it has been difficult to verify that the rules are followed by all employers, especially in the informal sector. The working week comprises 48 hours and overtime compensation should be given thereafter, which is often not the case. Office employees usually have somewhat shorter working hours. Six days of work week is a rule. The first year of employment covers six working days and is then gradually extended.
Minimum wages are fixed and vary for different occupations and skills. The country is divided into three zones with different such wage levels, with the highest wage level in the metropolitan area and the lowest in the south. In low-wage industries, minimum wages are not enough to lift households above the poverty line. Forced labor is illegal, as is work for children under 14. Nevertheless, several millions of children are estimated to participate in working life. Work safety rules exist but are often not complied with. Compensation for work injury is included in social insurance and thus mainly occurs in the formal sector. Upon dismissal, employers must pay severance pay. General unemployment insurance is missing.
Social insurance, pension and child allowance
A reform in 1997 tightened the rules in the social insurance system. These are still valid for their main features in 2013, but in the case of health insurance, the system has been supplemented. Social insurance is linked to work, and payment of contributions is compulsory only for employees in the formal sector. Self-employed persons and others can voluntarily join. The policyholders pay part of the salary in order to gain access to health care and pensions for themselves and the rest of the family, as well as survivor’s contributions and occupational injury compensation. Employer contributions and state funds also contribute. However, around 2000, less than one-third of all employed persons had such insurance. When someone uninsured became seriously ill, it could have catastrophic consequences for the whole family. Officially, this was recognized as an explanation for extreme poverty.
In 2010, still less than a third of all employed persons had pension insurance. The retirement age is normally 65 years and the size of the pension is determined by the number of years that insurance contributions have been paid into your own pension account. For those who receive a particularly small pension, the state guarantees a contribution up to a low minimum level. The vast majority of people in rural areas still lack pension, as do most in the informal sector. The rules for pension insurance vary between the states, and the current system is widely discussed. An increasing share of the population is coming up in retirement age and this requires that more and more funds for pensions are set aside by the states and the federal state. In recent years, small adjustments have been made to strengthen the pension system, but comprehensive pension insurance is lacking (2013),
General child support is also lacking in Mexico, but there are various forms of support for mothers and small children. Working mothers with social insurance are entitled to 14 weeks’ leave with full pay both before and after childbirth and place for the child in day care for a maximum of four years. For the large number of uninsured mothers, there is need-tested support in the form of federally subsidized day care centers. The very poorest toddler families can also receive food grants.
Health insurance, health care
In 2003, a decision was taken that all Mexican citizens should be covered by health insurance. This would have been accomplished in 2012, a goal that was largely achieved. Health insurance, Seguro Popular, includes preventive health care, health care, and even measures to counteract financial consequences in families where a member is affected by illness or injury. Seguro Popular also gives the 50-55 million Mexicans who have not previously been insured a disease insurance. Vaccination programs and preventive maternity care are also included, and gradually more diseases and health preventive measures will be included in this insurance. The vast majority of Seguro Popular are very poor and cannot pay insurance fees themselves, but the funds come to three quarters from the federal government and the rest from the respective state. This also reduces the previously large regional differences in health care. However, it is difficult to achieve the goal of caring for everyone in large rural areas with a shortage of healthcare workers and clinics and with poor roads over long distances. Therefore, many millions in reality still do not have access to healthcare.
Around 2010, there were about 4,000 hospitals and clinics in Mexico, some of which were general, usually very large and connected to the social security system. The number of clinics and health centers is increasing in line with the expansion of Seguro Popular in the countryside. Three-quarters of the hospitals are private and small, many very small. Some of them turn to wealthy foreign customers, usually from the United States, who in Mexico find good specialist care that is much cheaper than in the home country. In 2009, Mexico had two doctors and 16 beds per 1,000 residents. Infant mortality has been high, but it decreased significantly during the 1990s and was 2015 at 13 ‰. Maternal mortality was then internationally high; one pregnant or newly delivered mother died per 2,000 births.
The deaths are now largely related to lifestyle and to a lesser extent a consequence of infectious diseases and infections. Of the adult population aged 15-49, 0.3% had HIV / AIDS in 2009. Obesity is a growing problem. One third of adult women and one quarter of men were obese in 2010, the highest proportions among the world’s largest countries, second only to the United States. Nearly one-sixth of adults have diabetes, the common cardiovascular disease most common cause of death in Mexico, and it increases by 4% per year. Increases also cause deaths as a result of organized crime. Infectious diseases have become less common, partly as a result of improved sanitary conditions. In 2010, 87% of the urban population and 79% of the rural population had access to sanitation facilities.
Mexican law establishes gender equality, but women still have significantly lower average salaries and less political and economic influence than men. In the last six governments, women have averaged 7.5% of the items. Violence against women, especially within the family, is a serious problem and the rate of rape is one of the highest in the world. The laws regarding abortions and contraceptives differ greatly between the states. It is legal but very controversial in Mexico City and totally illegal in just over half of the states. This affects the young girls who have been raped most severely.
Crime and punishment
The wave of violence that has become increasingly severe in recent years is largely due to the fact that organized crime uses Mexico as a transit country for drug smuggling. The fight against drug trafficking and organized crime as well as violence and widespread corruption is one of the greatest challenges facing the country’s leadership. In many cases of violence and disappearances and murders, military or police officers are often accused of being involved. Members of the indigenous population are particularly at risk of such abuses, for example during land conflicts and demonstrations. Mexican prison services have poor standards and prisons are constantly overcrowded. No state-sanctioned executions have taken place since 1961 and the death penalty was abolished in a nationwide law in 2005.