MEXICO’S ECONOMIC DEVELOPMENT
How poor is Mexico?
The most serious problem in Mexico today is poverty. Indeed, as General Clemente Vega, President Fox's secretary of national defense once suggested, it is the number one national security problem in Mexico. There is no question that several of Mexico's other leading social and political issues are strongly linked to the extent and depth of its poverty. They include drug production and trafficking, political corruption, human rights abuses, weak social mobility, and lack of political participation. Economists traditionally measure poverty on the basis of income per capita. The World Bank has set a world standard by which countries can be compared. That standard measure of poverty is an income of less than $2 per person per day. The Bank has generated a second, more severe category, "absolute poverty," which is also defined by income. In this case the definition is $1 per person daily. Mexico's population has reached 121 million. By 2015, the poverty rate was 46.2 percent, affecting 55.3 million Mexicans. Those living in moderate poverty, 36.6 percent, totaled 43.9 million, and those in extreme poverty, 9.5 percent, reached 11.4 million.
According to those figures, when Mexico achieved an electoral democracy in 2000, approximately 50 percent of Mexicans were living in poverty, and half of those fell into the category of those living in absolute poverty. The federal government under President Zedillo (1994-2000) began seriously addressing the issue of poverty, and by the end of Vicente Fox's administration in 2006, it is estimated that Mexico had reduced poverty levels based on income to as low as 43 percent. Unfortunately, poverty figures rose again after 2008 due to the severe recession. As the analyst Miguel Szekely has noted, a more sophisticated way of defining poverty is to evaluate it with respect to three variables : food, capabilities, and assets. Food poverty is measured by the monthly per capita income necessary to purchase a basic basket of food. By that standard, more than 60 percent of Mexicans were poor in the 1950s, compared with only 12 percent in 2014. Capabilities poverty is the minimum amount of money necessary to achieve acceptable levels of health or education while meeting the food poverty standard. More than 70 percent of Mexicans failed to meet the standard in the 1950s, compared with 19 percent in 2014 for education and 21 percent for health. Finally, asset poverty describes an individual who can meet the first two standards but does not earn enough for minimum levels of shelter, clothing, and transportation, a condition that described nearly 90 percent of Mexicans sixty years ago but affected 52 percent of the population in 2014. It took Mexico eighteen years, from 1994 to 2012, after a severe economic crisis in the late 1990s and then again in 2008, to bring household income back to 1992 levels. In 2014, the level of poverty increased to 53 percent, exactly the same as that in 1992.
It is important to note that poverty is distributed unevenly throughout Mexico. Seventeen million Mexicans live in rural zones, but 61 percent live in poverty, and of those, 5.2 million live in extreme poverty. Nine out of ten of those Mexicans say their work is little valued in their country. The persistent level of poverty has serious consequences for upward social mobility. Thirty-five percent of children raised in a family that ranks in the bottom fifth of the population measured by income will remain in that same category. Children raised in the top quintile of income earners will have a 60 percent chance of remaining in that category.