Mexico’s neoliberal reforms and income inequality
This week’s readings take into consideration the inequality and income distribution, as well as the neoliberal reforms that have taken place throughout Latin America. The effects of the neoliberal reforms in Mexico transitioned the economy from a public sector to a free market dominated by privatization. As a result, the low income working class and the poverty stricken lower class are restricted on the amount of influence they possess in the governmental decisions.
Nearing the end of the 20th century in Mexico, the political participation between the rich and the poor were similar, if not the poor were more likely to protest or contact government officials before the transition to democracy. Yet after 1997, the upper class engaged in double the participation compared to the lower class. This outcome is possible due to the fact that politics in Mexico tend to exclude the poor. According to Holzner on page 95 and 96, there are three mechanisms that attribute to the exclusion and political participation of the poor. The first is that the government began implementing free market reforms that redistributed resources away from the lower class and towards the elites, which severely impacted the poor due to the level of poverty and the lack of resources. The second is that these reforms weakened the mobilization of the lower class by dividing organizations, thus damaging their political participation because they rely heavily on organizational power. Lastly, the poor have become strongly discouraged from participating in the political process because of the disincentives brought about by the switch from heavy state intervention to the free market model, that set predetermined spending levels on basic needs, including health care and education.
As of late, the income inequality between the upper and lower class has continued to remain stagnant within the past few decades. According to an article by International Business Times, the top 1% of the Mexican population collectively holds 43% of the country’s wealth, while just under half of the population settles below the poverty line. In addition, within the past 20 years, the top 1% of Mexicans has seen dramatic increases of wealth. Take into consideration that the education system is severely suffering, with there being schools in Mexico that lack access to sewage, electricity and drinking water. President Peña Nieto has commented on the issue of poverty in Mexico, however from 2012 to 2014, there were an estimated 2 million Mexicans that fell below the poverty line.