Can poverty be reduced rapidly in Mexico? Yes. Pursuing that objective must be a national priority, key in the proposals and commitments in the 2024 federal electoral process. But to do so we must be clear about what this implies: that millions of families have a route to move to the middle class , With everything it implies. Social assistance programs help and are of basic social justice. But they are not enough.
By themselves, they cannot be the great engine for activating social mobility that is required for a massive, accelerated and lasting reduction in poverty. Even less if its planning and implementation is deficient and the sources of financing are precarious.
To reduce poverty on a large scale, as a country like China has done, in one of the greatest feats in that sense in history, the formula must contain two variables: high inclusive growth, that is, it generates increasing employment. quality and opportunities for the entire population, and coverage of the basic conditions so that all people can take full advantage of it: health, social security, quality education.
In an article a few weeks ago I commented on how the State and society in Mexico allocate more and more money to programs to serve people in poverty, but with limited and, above all, precarious results, that is, without a firm perspective of sustainability. . More people may be receiving government transfers, but the benefit is reduced if health coverage deteriorates, which not only can consume more of their income, but leaves them even more vulnerable.
If there is no growth, and with it more jobs, the effect of social programs is restricted, and even more so if the educational gap to access well-paid employment increases.
We said that all this is clear in the diagnosis of the study by the organization Citizen Action Against Poverty, “Go to the root of poverty.” We needed to talk about what could be done, specifically, for this.
Let’s think about a triple helix model. A win-win for workers, companies and the Government. That is the key to eradicating poverty, and not just alleviating it.
What do we do so that there are more and better jobs, with increasing salaries, with social benefits that strengthen the coverage of social rights and fundamental public services?
What for companies to multiply and grow, with more access to credit and professionalization resources to be resilient, invest, and thereby provide those jobs?
What so that the Mexican State has the necessary resources to consolidate a truly universal social security system and ensure the provision of quality health, education, security and justice services for everyone?
What Citizen Action Against Poverty proposes to overcome “the paradigm of competitiveness based on low salaries” is a new labor agreement that “ties” the salary increase with improvements in productivity. A new social pact.
They propose a general minimum wage sufficient to purchase two basic baskets, as well as encouraging and strengthening voluntary business initiatives for a decent income (which covers a decent basket greater than the basic basket of the poverty line). But the most important thing, from my point of view, is to promote a structural change that links the need to strengthen public finances, the challenge of formalizing employment and companies, and the urgency of a health and social security system capable of covering the needs of all Mexicans.
A far-reaching reform to create a universal social protection system, not conditional on work. A structure that covers, at least, universal access to health and care services, such as child care, and a guarantee of basic income for those who cannot work or have lost their job.
Something similar to what Santiago Levy, former Director General of the Mexican Social Security Institute, has proposed for years. In essence, breaking the paradigm of labor and business informality, low productivity in at least 50% of the economy and meager tax collection that cannot be resolved simply by increasing tax rates, much less without counterproductive effects for investment, growth and employment.
It is about promoting a fundamental tax reform, which, for example, with a generalized and perhaps higher VAT, offers in exchange that universal system of social security or welfare state for all. A way to promote labor and business formality, by reducing costs and procedures that inhibit formal hiring.
In essence, they are the fundamental theses that Levy has based on works such as “Good Intentions, Bad Results: Social Policy, Informality and Economic Growth in Mexico”, from 2010, and “Efforts poorly rewarded: The elusive search for prosperity in Mexico” , in 2018.
In 1990, about 36% of the world’s population lived on less than $1.25 a day. In 2000, United Nations Member States committed to halving that number by 2015. The goal was met. That year, the proportion fell to 12%: more than a billion people escaped extreme poverty in 25 years, in one generation, especially due to the numbers in China and India. Mexico can do the same, and perhaps in less time.