Impoverished middle-class in Mexico

Louis Proyect lnp3 at
Wed Sep 4 19:20:55 MDT 2002

NY Times, Sept. 4, 2002

Free-Market Upheaval Grinds Mexico's Middle Class

MEXICO CITY, Sept. 3 -- By Mexican standards, Álvaro Álvarez and Alma 
Amarillas are a solid middle-class couple. But in the 20 years they have 
worked to build a stable life for themselves and their children, the 
economic ground beneath them has never stopped shaking.

She works double shifts as a public school teacher and administrator. He 
has quit teaching to work as a personnel manager for the government. 
Together they make about $24,000 a year. But they have little more to 
show for their life's labor than the roof over their heads.

They have not been able to save a penny. They spend more than half their 
monthly income on their mortgage. Their safety net is a credit card with 
a $300 limit. And they have diminishing hope that their two daughters 
will live better than they do.

"We live day to day," Ms. Amarillas said. "We never know when there will 
be a new crisis. I panic when the girls get a fever or the car sounds 

"I don't think much anymore about how our situation will improve," she 
added. "I worry more about how it could get worse."

It has been two decades since Mexico committed itself to free-market 
reforms aimed at propelling this country into the developed world. The 
North American Free Trade Agreement, considered the centerpiece of the 
new Mexican philosophy, has generated a quarter trillion dollars in 
cross-border trade with the United States. The treaty helped turn a 
closed, inefficient economy dominated by state-owned companies into one 
that was flooded by foreign investment and driven by foreign competition.

But government statistics show that economic liberalization has done 
little to close the huge divide between the privileged few and the poor, 
and left the middle class worse off than before. Battered by a series of 
severe recessions, teachers and engineers, nurses and small-business 
men, all find themselves swinging above and below the poverty line with 
the rise and fall of the peso, interest rates and the unemployment rate.

According to a recent government report, in the year 2000 half the 
Mexican population lived on about $4 a day, with scarcity shifting along 
with the population from rural regions to cities. Some 10 percent of 
Mexicans at the top of the income pyramid controlled close to 40 percent 
of the nation's wealth.

Meanwhile, the 35 percent of Mexico's population that lives in the 
middle -- with average earnings of about $1,000 a month -- spirals 
slowly downward.

The economist Rogelio Ramírez de la O said that in the 1970's, when 
Mexico's population was 50 million people and the country had begun to 
enjoy the benefits of an oil boom, some 60 percent of Mexicans were 
middle and working class. Their numbers and buying power have declined 
"dramatically" since then, Mr. Ramírez said.

"The promises of economic modernization have not been fulfilled," he 
added, and Mexico's middle class "now has less buying power than a 
generation ago."


Louis Proyect

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