Low Wages Keep Mexicans from Saving for Pensions Prensa Latina
go to original August 12, 2016

Studies find that up to 85 percent of Mexicans are not able to retire. (Cuartoscuro/Jose I. Hernandez)

Low incomes and informal jobs are the main obstacles to increasing voluntary or mandatory pension contributions in Mexico, experts say.

Berenice Ramirez, academic secretary of the Institute of Economic Research of the National Autonomous University of Mexico, and Enrique Diaz, director of the program of the sector of finance and social security Espinosa Yglesias Studies Center, agree on this.

According to Ramirez, wages in Mexico are not enough to cover basics, a situation that has more impact than the aging population.

She added that the current retirement savings system, including the one carried out by workers in Mexico is equivalent to 14 percent of gross domestic product (GDP) and there are also 55 million individual accounts in the Retirement Funds Administrators (Afores). However, one third of the accounts are inactive, since only about 19 million workers are formally employed.

Diaz said that workers receiving wages represent only half of the economically active population.

The government is concerned with achieving economic growth, and the failure of the Ministry of Finance is in not having created the conditions for more jobs and better wages, said Ramirez.

Read the rest at Prensa Latina

Related: More Than 300,000 Mexicans Joined Informal Work Sector in Past Year (Prensa Latina)

Related: More Than Two Million Children Work in Mexico, According to Research (Prensa Latina)

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