Inequality in Mexico Is All About Wage Disparity Emilio Godoy - Inter Press Service
go to original November 23, 2014

Street vendors on Moneda street in the historic center of Mexico City. The huge informal economy is one expression of the enormous pay inequality in the country. (Emilio Godoy/IPS)

MEXICO CITY - In its 2014 report, published in April, the Observatory underlined that “the absolute impoverishment of the working class is reflected in the reduction of the cost of labor, the more intense exploitation of the working day, and the growing precariousness of working conditions, housing and living conditions in general.”

The current minimum wage of around five dollars a day is the lowest in Latin America, followed by Nicaragua, Haiti and Bolivia, according to the Observatory.

But the most worrisome aspect is the enormous wage gap, as reflected by a 2013 study by the global management consultancy, Hay Group, on the difference between the pay earned by senior employees and new workers.

According to the report, the base salary of an executive in Mexico City is 10,000 dollars a month, just 417 dollars less than what an executive in a similar company in New York earns. But in the United States, the federal minimum wage is 7.25 dollars an hour, compared to 5.05 dollars a day in the Mexican capital.

The Presidents’ Compensation Study by the international human resources consultancy Mercer found that in Mexico the CEO of a large company earned 121 times the minimum wage – the biggest gap in Latin America.

Article 123 of the Mexican constitution states that “the minimum wage in general should be sufficient to meet the normal needs of the head of the family, in material, social and cultural terms, and to provide obligatory education for the children.”

According to official figures, Mexico’s economically active population totals 52 million, of whom more than 29 million work in the informal sector. The official unemployment rate stands at 4.8 percent and underemployment at seven percent.

Read the whole story at Inter Press Service

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