Research Report 136: Eighty Percent of Mexico’s Working Population Lives in Extreme Poverty

The central objective of this report is to analyze the characteristics of perceived trends in the population of working people per state who are unable to acquire the Recommended Food Basket (RFB) [Canasta Alimenticia Recomendable (CAR)]^[1] due to insufficient wages and thus are considered to be living in extreme poverty.

For this analytic purpose, the present report is developed methodologically and consists of at least two installments. This is the first installment in which we present our findings on the Rate of the Working Population in Extreme Poverty (RWPEP) [Tasa de Población Ocupada en Pobreza Extrema (TPOPE)], which is constructed by establishing the correlation between the population of workers based on income level—for which the unemployed population is not considered—whose information is published in fiscal quarters by the National Survey of Work and Employment [Encuesta Nacional de Ocupación y Empleo (ENOE)] by the National Institute of Statistics and Geography [Instituto Nacional de Estadística y Geografía (INEGI)]; and the price of the Recommended Food Basket (RFB) [Canasta Alimenticia Recomendable (CAR)], which is calculated each year by UNAM’s Center of Multidisciplinary Analysis [Centro de Análisis Multidisciplinario de la Universidad Nacional Autónoma de México]. Through this methodology, we quantify the working people in Mexico whom we consider to be living in extreme poverty based on their income; or, in other words, the population that works but does not receive income and the population that works but receives insufficient income to acquire a “basket” consisting only of food. In the second installment, we will publish the results of the processes and trends in the distribution of the working population by levels of income, as well as the case study about the real salary and the purchasing power of the tabular salary of healthcare workers in Mexico.

Note: It’s crucial to point out that, in this study, the income levels of the working population are associated strictly with nominal wage; we did not do calculations nor do we present results about real wage or the purchasing power of workers’ wages.

UNAM’s Center of Multidisciplinary Analysis calls for the need to undertake an analytical study implementing the Labor Theory of Value, which centers both exploitation and workforce precarity as fundamental axes in the process of capital accumulation on a global scale. As such, we will use the tool of the RWPEP, which allows us to demonstrate the exploitation of the workforce through the processes of wage precarity.

Additionally, we establish the timeline of this analysis with reference to the fourth fiscal quarters of 2006, 2012, 2018, and 2020, because these years are the final years of the six-year presidential terms of the following political parties: 2006 was marked by the administration of the National Action Party [Partido Acción Nacional (PAN)], headed by Vicente Fox Quesada, in the so-called shift in power; in 2012, National Action Party, (the self-appointed government of employment), which remained in power, implemented an aggressive labor reform against workers, which, among many aspects, attained for its own class interests the legalization of subcontracting, all of which was spearheaded by Felipe Calderón Hinojosa; in 2018 we witnessed the return of the Institutional Revolutionary Party [Partido Revolucionario Institucional (PRI)] under the management of Enrique Peña Nieto. Finally, we’ve also analyzed 2020’s data on Andrés Manuel López Obrador’s National Regeneration Movement [Movimiento de Regeneración Nacional (MORENA)] government. Consequently, through our research we present a comparison of the results of the wage policies implemented upon the working population in Mexico at the end of each six-year term and in 2020. In this process we locate the continuities and ruptures between the political parties in order to investigate just how big this affront on Mexico’s working class really is.

Below we present maps of the results of the RWPEP organized by state for 2006, 2012, 2018, and 2020.

In the year 2000, there was a so-called shift in power between the conservative right, on one hand, with the increasingly dilapidated and inoperative project of the PRI driven by the interests of big capital; and on the other hand, the managers of large transnational companies that dominated in the government embodied by Vicente Fox Quesada. His six-year term resulted in 18 million 554 thousand 765 workers living in extreme poverty in 2006, with a national RWPEP of 42.2%. In 2006, 1.7 minimum wages were required just to be able to buy the RFB, which had a daily cost that year of $80.83 pesos, in comparison with the $48.67 pesos of the daily minimum wage.

The following map demonstrates that this condition of poverty among the working population was most accentuated in Mexico’s southeast. This is notable in the states of Chiapas, which had 1 million 189 thousand workers living in extreme poverty, representing a RWPEP of 73.6%; in Oaxaca, with 993 thousand 494 workers in extreme poverty and a RWPEP of 68%; Puebla, with 1 million 402 thousand workers living in extreme poverty and a RWPEP of 62%; and Guerrero, with 755 thousand 788 workers in extreme poverty and a RWPEP of 60.9% (see Table 1). Incidentally, these states have historically been subjected to conditions of poverty and marginalization.

At the close of the six-year term of the PAN politician Felipe Calderón Hinojosa in 2012, there was a notable, significant increase in the RWPEP throughout the country; the national levels of the RWPEP escalated to 66.2%, which translates to 32 million 315 thousand 444 workers living in extreme poverty. Between 2006, the last year of the six-year term of Vicente Fox, and 2012, the number of workers living in extreme poverty increased by 74%. This increase can be partially explained by the fact that, for this year, 3 minimum wages were needed to be able to acquire an RFB, which cost $188.99 pesos per day, compared to the $62.33 pesos of the daily minimum wage.

In the following map, which depicts the RWPEP by state for 2012, it’s notable that the northern states—which are considered the bastions of the industrial local bourgeoisie—have darkened to reflect higher levels of poverty, which seriously impacted the lives of workers. For example, Durango registered 482 thousand 60 workers in extreme poverty, which represents a RWPEP of 71.1%; Tamaulipas, with 932 thousand 976 working people living in extreme poverty, reached a RWPEP of 65.8%. At the same time, in the center of the country, the capital reached a RWPEP of 52.2%, representing a total of 2 million 190 thousand 850 workers in extreme poverty (see Table 1); meanwhile, in the Mexican southeast, poverty had worsened to reach levels like those of Chiapas at 84.4%, Guerrero at 83.6%, Oaxaca 79.2%, and Yucatán 76.6%.

In 2018, with the return of the PRI, headed by the administration of Enrique Peña Nieto, we can see that, far from alleviating the increasing poverty rates and faithful to anti-working class principles, the government furthered the trend of impoverishing the working classes through regressive wage policies, which were necessary to maintain the gains of big capital. In this year, the number of working people living in extreme poverty rose to a little more than 37 million, to reach a national RWPEP of 68.4%. When we compare this to the figure in 2006, which was 18 million 554 thousand 765 workers in extreme poverty, it’s clear that the destitution of Mexican workers doubled.

In the following map of the RWPEP by state for 2018, we can see that the RWPEP widely reaches levels of over 70% in the country’s southeastern region. For example, the state of Chiapas registered the highest rate at 88.5%, which is to say 1 million 680 thousand working people lived in extreme poverty; Guerrero with 1 million 326 thousand 630 working people living in extreme poverty, which translates to a RWPEP of 86%; Oaxaca, with 1 million 414 thousand 385 working people in extreme poverty, reached a RWPEP of 81.7%; Campeche, with 326 thousand 279 working people in extreme poverty, reached a RWPEP of 78%; Tabasco, with 699 thousand 87 working people in extreme poverty, reached a RWPEP of 74.4% (see Table 1).

Moreover, in the same map we can see that, in states in the country’s northern region, RWPEP levels of over 60% had become widespread. For example, Durango, with 561 thousand 422 working people in extreme poverty, reached a RWPEP of 72.7%; Tamaulipas, with 1 million 121 thousand 363 working people in extreme poverty, reached a RWPEP of 68.7%; Coahuila, with 847 thousand 17 working people in extreme poverty, reached a rate of 63.2%; Baja California, with 1 million 25 thousand 933 working people in extreme poverty, reached a RWPEP of 60.2%; and finally, there’s the representative case in the center of the country with the capital, which found itself with a rate that had increased to 58.1%, meaning that 2 million 445 thousand 687 working people in the city joined the ranks of those workers living in extreme poverty (see Table 1).

December 2018 brought the arrival of Andrés Manuel López Obrador’s government under the slogan “first the poor,” pushed by the exhaustion of millions of workers who were looking for a real change to substantially better their working conditions and the wages of the Mexican labor market. This hasn’t happened, as we’ll see shortly.

In the last fiscal quarter of 2020, the working population living in extreme poverty at the national level grew to 41 million 567 thousand 104 people, which equals a RWPEP of 77.9% of the working population across the country; in other words, from 2018 to 2020, an increase of 12.19% of the population of workers living in extreme poverty occurred. This is to say that, in the two first years of the current government, 4 million 519 thousand 89 working people joined the ranks of workers living in extreme poverty. Upon comparing this figure in absolute terms to the last year of Vicente Fox Quesada’s term in 2006, in which the number of working people living in extreme poverty was 18 million 554 thousand 765 people, that number had increased to a total of 23 million 12 thousand 339 working people living in extreme poverty in the last three terms and the first two years of the current government (which is to say, in 14 years). In other words, it has grown with an average of 1 million 643 thousand Mexican workers in extreme poverty per year. Nevertheless, the first two years of Andrés Manuel López Obrador registered an annual average increase of 2 million 250 thousand working people living in poverty, a number that is outrageous for people steeped in hardship and a clear demonstration of the continuity and sharpening of the process of wage precarity in Mexico.

In the following two maps, we can observe the magnitude of the working class’s wage deterioration in each state in 2020.

Note: On January 1, 2019, a new wage zone came into effect; it covers 43 municipalities and is known as the Free Zone of the Northern Border (FZNB) [Zona Libre de la Frontera Norte (ZLFN)]. For calculating the RWPEP, we present the data for the national daily general minimum wage of $123.22 pesos, which is applicable throughout country with relation to the price of the RFB for each of the six border states in the north of the country, with the exception of Baja California, which has all of its municipalities within the FZNB.

In the following map, which shows the fourth fiscal quarter of 2020, we can see that, in 30 states throughout the country, the RWPEP is above 70%, which is synonymous with the level of deterioration of the working and living conditions of workers. Two states even surpassed the benchmark of 90%: Chiapas, with a RWPEP of 92.6%, registered a figure of 1 million 897 thousand 717 working people living in extreme poverty; and Guerrero had 1 million 394 thousand 277 working people living in extreme poverty, with a RWPEP of 91.3% (see Table 1). It is also important to note that Oaxaca comes close to 90%, with a RWPEP of 89%; and another noteworthy case is with the nation’s capital, which has a total of 2 million 658 thousand 974 working people living in extreme poverty.

That being said, even if we suppose that all of the municipalities of Sonora, Chihuahua, Coahuila, Nuevo León, and Tamaulipas operate with the daily general minimum wage of the  FZNB (which was $185.56 pesos in 2020), the situation doesn’t radically change. Only in Nuevo León do we find a RWPEP below 50%. However, it’s important to note that only one of the 51 municipalities of Nuevo León is found within the FZNB, so the employed population that really benefits from this pseudo-high wage is minimal.

We could summarize, then, that in a lapse of four six-term presidencies, with the governments of PAN with Vicente Fox Quesada and Felipe Calderón Hinojosa, of PRI with Enrique Peña Nieto, and now with MORENA with Andrés Manuel López Obrador, various schemes of the regressive wage policies have been implemented. These policies have historically favored the interests of the United States, first with the North American Free Trade Agreement and now with its renewal through the United States-Mexico-Canada Agreement, which has essentially meant, for the vast majority of the working class in Mexico, systematic labor and wage precarity. In this way, these governments have literally generated conditions of extreme poverty for millions of working people. In 14 years, the wage precarity advanced from 18 million 554 thousand 765 workers living in extreme poverty, with a RWPEP of 42.2%, to 41 million 567 thousand 104 working people living in extreme poverty, with a RWPEP of 77.9%.

[1] The Recommended Food Basket (RFB) was designed by Dr. Abelardo Ávila Curiel from the Instituto Nacional de Nutrición Salvador Zubirán. It is composed of 40 foods without including the costs of preparation, nor the costs of rent, transportation, clothing, shoes, personal hygiene, and many other goods and services that are consumed by a family. It only references the cost of basic foods. The RFB is a carefully calculated amount, used and consumed daily, by a Mexican family of four people (two adults, a young adult, and a child), which takes nutrition, diet, tradition, and cultural habits into account.

translated by Rachel Whalen