In this Oxfam report by Gerardo Esquivel Hernandez, it shows how Mexico continues on being one of the most economically inefficient countries in the world. The most important factors that hinder economic growth and increase economic inequality are the wage and fiscal policies that the Mexican government implements in their country. Over 23 million people in Mexico have difficulty affording enough money to buy food to sustain themselves. Both social policies and political policies hinder the economic growth in Mexico as they do not provide enough resources to its citizens to thrive in Mexico. Those who are rich in Mexico continue to get richer over time as they control over 64.4% of Mexico’s wealth and also get 21% of the nation’s total income. The number of millionaires has not been growing, and those who were already rich continues to get richer as time goes on. There are four main millionaires in Mexico who have established their fortune in the private sector, however they have the support and licensing from the public sector. These established millionaires are also deeply involved in politics as they control some of the fiscal policies in Mexico that guarantees lack of regulation and lax on taxing for wealthy people in Mexico. Poor people get taxed the most because they spend a much higher percentage of their income, while wealthy people do not pay as much taxes because they do not spend as much on their income. Rich people also got tax cuts on things like sending their children to private schools and no taxing on capital profit from the stock market as well as insufficient annual property taxes. The tax system is exceptionally flawed guaranteeing the rich to stay rich while hindering any poor working class people from becoming rich. The wage policy is deemed inefficient because the minimum wage in Mexico is to ensure that inflation does not happen. However, there is no finding that keeping minimum wage low is helping to keep inflation from happening. The wage policy in fact is much more detrimental to economic growth in Mexico because no one from the working class is making enough for them to sustain themselves. In the end of the report, Hernandez also provides recommendations to improve the economic inequality in Mexico.
The author Gerardo Esquivel Hernandez is an economist as well as an economic professor El Colegio de Mexico. Its intended audience are Mexican politicians and its citizens because this report shows the main problems that increases Mexico’s economic inequality. Hernandez was able to come up with some suggested solutions that can help improve Mexico’s economic inequality. However, it is uncertain whether or not the Mexican government will use the suggested solutions and incorporate them into their government to improve the amount of inequality in Mexico. This report does a really good job summarizing what the main problems of Mexico’s economic inequality are.
This article is important because it showcases how important governments’ political and social policies are to its citizens because it either helps or hinders the economic growth in a country. This report provides a good example of how Mexico allows for the wealthy to continue to keep and further their economic wealth status while making it difficult for its poor citizens to get enough wage salary to pay for their own expenses.
I chose this image because it shows the close proximity of the rich and poor in Latin America. These two different classes of people live so closely to each other, yet no change has been made from the government to help close the gap between the two classes. I found this image in an article talking about income inequality in Latin America. https://www.panoramas.pitt.edu/news-and-politics/how-can-latin-american-governments-work-sustain-falling-income-inequality