Inequality and minimum wage policy: Not even talking, much less walking in Mexico

Abstract

This paper examines the evolution of economic inequality in Mexico in the last three decades, both in terms of the personal distribution and the functional distribution of income, partly exploring the question of how much of its evolution is determined by economic or social policies. The second purpose of our paper is to analyze the relation between the evolution of the functional distribution of income and labor policy, with special emphasis on minimum wage policy. Finally our third objective, closely linked to the previous two, is the examination of the institutional context as well as the ideological and political economy considerations that have marked minimum wage policy in Mexico in view of the successful attempt to bring the debate back to the forefront of the political agenda. As such, our analysis will pay special attention to events since May 1st 2014, when the Chief of the Government of Mexico City launched a national discussion on the urgent need, ways and means to renovate minimum wage policy in Mexico. In our view, this debate is perhaps the only recent expression in Mexico of the current re-found concerted focus on inequality on a global scale, an expression that has woken up fierce opposition from key sectors of the Mexican elite and highly placed government officers in the current administration.