Low Salaries Based on Low Minimum Wage Are 'Pushing' Poverty in Mexico's Cities Belen Zapata - CNN Mexico
go to original August 2, 2013

The policy of increasing the minimum wage less than the inflation rate has reduced purchasing power and generated more poor people, analysts say.

Poverty in urban areas rose 0.2% in the last two years and includes 40.6% of the population. Four of every ten Mexicans living in cities are living in poverty, according to the 2012 report of the National Council for the Evaluation of Social Development Policy (CONEVAL).

The growth of poverty in these areas is driven by Mexicans' diminishing purchasing power, which since 1976 has fallen over 70%, according to a study by the National Autonomous University of Mexico (UNAM).

"What has happened is a phenomenon of job insecurity [increase in temporary jobs] and is one of poverty's root causes. Real wages have remained static and low, so there has been a loss in the purchasing power of real wages. This is a hard and fundamental cause of poverty," Adolfo Sánchez, scholar at the Economic Research Institute of the UNAM, told CNNMéxico.

Read the rest at Mexico Voices

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