Carlos Slim is the richest man in Mexico, with a reported fortune of nearly $US70 billion.
Slim’s wealth is so immense that it equals 6.3% of Mexico’s gross domestic product, a percentage greater than the combined income of the poorest 20% of Mexicans — nearly 25 million people — who account for just 4.9% of the country’s GDP, according to a report from El Daily Post.
Admittedly, net worth is not metric that compares cleanly with income. Nevertheless, you still get a sense of the scale of Slim’s wealth.
Slim is in exclusive company: Between 1996 and 2014, the number of Mexican billionaires grew to 16 from 15, but their average worth surged to $US8.9 billion from $US1.7 billion.
Meanwhile, the bottom 20% of Mexicans have an average worth of $US80.
‘Disposable income to acquire the basic food basket’
There are 2,540 Mexicans with individual assets of $US30 million or higher. They are a fraction of a per cent of the population but hold 43% of Mexico’s total individual wealth in a country of almost 125 million people.
Meanwhile, 61 million Mexicans — roughly the population of California and Florida put together — cannot afford a decent standard of living.
According to El Daily Post, the richest 10% of Mexicans earn 30 1/2 times as much as the poorest 10%, a measure that places Mexico last among the Organisation of Economic Cooperation and Development’s 34 member countries.
This kind of poverty and economic hardship is not new in Mexico.
According to Mexico’s National Counsel for the Evaluation of Social Development Policy (Coneval), 53.1% of Mexicans lived in poverty in 1992 because they lacked sufficient “disposable income to acquire the basic food basket and make necessary purchases for health, education, clothing, housing, and transport, even if all of their home’s disposable income was used exclusively for the acquisition of these goods and services.”
In 2012, that number was 52.3%. (By 2014, 2 million more Mexicans were in poverty.)
‘My salary is frozen, but prices keep rising’
That relatively unchanged poverty rate is compounded by a decline in purchasing power.
According to El Daily Post, data compiled from Banco de Mexico reveals that a family of four earning the minimum wage in 1976 could buy four times as much as it could in 2014, a decline in purchasing power of 73%.
And average household income dropped 3.5% in real terms in 2014 from 2012, according to a government release.
“My salary is frozen, but prices keep rising,” Andrea Martinez, who earns less than $US250 a month cleaning houses, told Bloomberg.
Mexico has suffered macroeconomic setbacks during the past two decades as well; a currency crisis in 1994 caused a nearly 10% loss in GDP, and the country lost 6.7% of GDP during the 2008-2009 recession. The recent slump in oil prices has also dented state revenues.
The most recent figures paint a bleak picture of the country — one in which one-fourth of the country’s 2,438 municipalities have living conditions similar to sub-Saharan Africa, and one that is 18th of 20 Latin American countries in terms of real GDP growth per person.
But, as President Enrique Peña Nieto said at an event on Monday: “Other economies have done worse; they have faced scenarios still more adverse” than Mexico’s.
Nevertheless, the newspaper Reforma reported that he acknowledged the economy was not performing as desired but stressed that Mexico would make “decisions with responsibility in order to care for macroeconomic variables, which permit us to continue growing, and something more important: project confidence to the entire world.”