US President Donald Trump’s antagonism toward Mexico is a relatively new challenge for the US’s southern neighbour.
Despite Trump’s aggressive posture, Mexicans face a number of domestic issues affecting their way of life.
The rising violence in the country is perhaps the most visible, but stagnant wages and declining purchasing power have also had significant impact.
The Mexican government raised the country’s daily minimum salary at the beginning of January, boosting it from 73.04 pesos to 80.04 pesos — or from about $US3.52 to $US3.86 based on exchange rates at the time.
To many Mexicans — dreading looming fuel-price increases they expected to raise food prices and other costs — the increase was unimpressive. And for the 7 million Mexican workers earning the minimum salary at the end of 2016, that wage hike may amount to little.
At the end of 2016, the recommended food basket — which includes food for a family of two adults and two minors — cost a total of 218.06 pesos, or $US10.52, a day.
Based on the previous minimum salary, 73.04 pesos, one worker could only afford to buy 33.5% of basic necessary food goods, according to Mexican news site Animal Politico.
In comparison, in January 2013, the month after President Enrique Peña Nieto took office, the minimum daily salary was 64.76 pesos, or $US5.04 at the time, while the basic food basket was 171.86 pesos, or $US13.34 — meaning one daily minimum salary could buy 37.7% of the basic family basket of goods.
While in nominal terms there has been a 12.8% increase in the minimum salary, Animal Politico notes, through the end of 2016 prices have gone up 26.9%.
“In only the last three years 11.11% of [Mexicans’] purchasing power has been lost,” Tania L. Montalvo wrote.
Overall growth in incomes and purchasing power has been stagnant for some time.
Mexican family income has risen 1,129% since 1987, based on the minimum salary. Yet, factoring in inflation, their purchasing power has fallen.
The amount that would purchase 1.5 basic food baskets in 1987 would buy just one-third of one today, according to Animal Politico.
More broadly, while per-person GDP grew 98.7% between 1960 and 1980, between 1994 and 2014, it grew just 18.6%.
Wages, adjusted for inflation, rose only 2.3% between 1994 and 2012, according to a 2014 report by the left-leaning Center for Economic and Policy Research.
In 2014, 53.2% of the country lived below the national poverty line by the broadest measure of poverty, meaning they lacked
sufficient “disposable income to acquire the basic food basket and make necessary expenses 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.”
These money woes come despite the time Mexicans put in on the job.
In terms of hours worked and wages earned, Mexico is at the back of the pack among countries in the Organisation for Economic Cooperation and Development.
Mexican laborers worked, on average, a total of 2,246 hours in 2015, the most of the 35 OECD member countries. But those workers earned on average a total of only $US14,867, the lowest in the OECD and far behind second-to-last Hungary, where workers made 19,999 in 2015.
US workers labored, on average, for 1,790 hours in 2015, bringing home $US58,714.
Mexicans have raised legal objections to the country’s paltry wages.
“The situation is serious to such a degree that it violates what’s stipulated in the Constitution,” Gerardo Esquivel, an economics professor in Mexico City and at Harvard, told El Daily Post
at the end of 2015. “The minimum salary must guarantee a decent standard of living.”
Last year, Maria de la Luz Gregorio — who travels four or five hours to and from work at a restaurant in Mexico City each day — mentioned her concerns about her wages and the uncertainty they left her in to a group of lawyers at the restaurant.
Those lawyers considered her situation and believed she would have success in court if they invoked Article 123 of the Mexican constitution, which says that “the minimum salaries should be sufficient to satisfy the normal necessities of a family head, of the material, social, cultural nature and to provide the obligatory education for the children.”
Their case was dismissed by a judge for reasons of jurisdiction, but other human-right leaders have raised alarm about the dire economic conditions many Mexican workers face.
“Decent work … is the motor of progress and social prosperity, grand aspirations that are common to all humanity,” Luis Raul Gonzalez Perez, the president of Mexico’s National Human Rights Commission (CNDH), said at the end of January.
“Men and women workers have the right to enjoy material well-being and economic security to satisfy the needs inherent in their dignity.”
In a mid-February statement, the CNDH also cited constitutional standards for human dignity that necessitated adjusting the current minimum salary.
“The standards of human rights are already given, they point unequivocally to the evident relation between the minimum salary and fundamental liberties,” Gonzalez Perez said in the statement. “The commitments made on the matter by our country are binding.”
During a seminar at Mexico’s National Autonomous University, Enrique Provencio, a researcher at the university’s program for the study of development, said that the inability to live a dignified life hindered the exercise of democracy.
Restoring the balance, Provencio said, would require labour-reform legislation with an emphasis on salaries.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.