CONDITIONS AND EVOLUTION OF EMPLOYMENT AND WAGES IN MEXICO

Enrique Dussel Peters

This brief reviews the wage conditions in Mexico and exposes their miserable state vis-à-vis the strategy followed by the government for the opening of the economy since the 1980s, which focuses on the offering of very low labour endowments.

Professor Enrique Dussel Peters at the Graduate School of Economics at Universidad Nacional Autónoma de México (UNAM), considers that, contrary to the expectations generated by the North American Free Trade Agreement (NAFTA), Mexican wages have not only shown a consistent widening of their historical gap with those of industrialized countries, but, additionally, wages in the most dynamic, productive and open sectors of the economy have clearly tended to equalize -downwardly- with those in the less open sectors. This situation reveals a highly level of precariousness in the strategy pursued until now. Nonetheless, the author considers that there is strong potential to increase real wages, particularly in the activities most opened and with the highest growth in productivity. Thus, the author considers of utmost urgency to perform an in-depth review of the economic strategy followed, with its excessive export orientation, and proposes the design of explicit actions and negotiations, so that the most exporting and productive sector reverts its trend and applies a strategy of substantial real-wage increases, which in turn pivots upwardly the wages and domestic demand of the other sectors. In this way, in the same way The Jus Semper Global Alliance has been proposing, a fordist strategy is proposed to support domestic demand through gradual wage equalization by applying instruments such as the purchasing power parities.

Lastly, given the adverse climate to close wage gaps among multinational and domestic companies, the author considers that two not mutually-exclusive instruments have strong potential for persuasion. First, there is the power of pressure, under the threat of boycott, of North and South consumers. In the same way, there is the opportunity to take advantage of the growing call for global governance, in a process where joint policies of both public and private sectors are designed to confront the business strategies that reject the closing of the wage gap.


Brief prepared on April 2004. For a full review of this brief, click here or on the picture to download the pdf file.

 

 

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