Why it matters that Mexico has a middle class

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By Heidi Smith

Political scientist Seymour Martin Lipset argued in 1959 that a middle class is key to democracy. If people are not struggling for basic material resources, he argued, they tend to develop more moderate views that favor gradual change. Conflicts can be resolved peacefully, while institutions and civil society can develop. 

Adam Przeworski, also a political scientist, suggested that democracy could be sustained with a lower limit of a $6,600 annual income per individual. Przeworski claimed that once a country’s middle-range income crosses that bottom threshold, the middle class reaches a critical size that makes change through violent revolution less likely, and democracy more likely.

Critics of this view argue that the middle class, historically, has not always favored democracy and that, precisely because they have so much to lose with social change, they tend to be conservative and often favor authoritarian policies that repress lower- or working-class protests and efforts to promote change, according to Jose Nun. Academics, investors and the media are concerned with this theory as it applies to Mexico, as the issues of migration, drug and gang violence, and indigent poverty are important to both the United States and Mexico.

While there are several ways to measure the middle class, Mexico hit the lower threshold in 1999. Check the chart here. Mexico made great economic gains after it entered the North American Free Trade Agreement (NAFTA) in 1994, and then with its shift to a multiparty democracy in 2000. My own research from 2000 onward has shown the emergence of more economic growth and political participation in small towns and cities since Mexico instituted democratization and fiscal decentralization.

But does Mexico hitting the Przeworski threshold mean economic growth and stability for the country? Mexico is a society of extremes. After all, it created one of the world’s richest men, Carlos Slim, who owns nearly 6% of the country’s gross domestic product after he amassed wealth from an unregulated telecommunications market. (TELMEX was privatized in the early 1990s, prior to Mexico’s democratization.) 

In the 2010s, for example, political pundits Luis de la Calle and Luis Rubio argued that higher consumption patterns mean that Mexico was “A Middle-Class Society, Poor No More, Developed Not Yet,” which was also the title of their book. Large swaths of Mexican society still live in poverty, yet urbanization and economic development have allowed the Przeworski threshold to take hold. (See ongoing research by Mexican economists Graciela Teruel, John R. Scott and Gerardo Esquivel for examples that measure, respectively, the poverty levels, middle class, and cultural assessments of consumption practices.)

Therefore, in 2019, why did the middle-class debate resurface in the U.S. media? Andres Manuel Lopez Obrador was elected president in 2018 — the first left-leaning, pro-poor populist to hold office. Leading an anti-corruption and pro-poor agenda, with large support across Mexican society, Lopez Obrador has approval ratings of over 80%. Yet many of his reforms are seen as negatively impacting business, the bureaucracy, and academia, or what he calls “la mafia del poder.” Such policies include defunding the federal government, unifying ministries, and eliminating some autonomous ministries. His policies also strengthen programmatic and financial auditing and pay pensioners and beneficiaries directly from the Treasury Department. 

Many international and institutional investors, credit rating agencies, and political risk groups appraise the macroeconomics of Mexico with trepidation. To calm the situation, the president announced in his inaugural address in Mexico City’s Zocalo that he planned to maintain an external central bank and healthy public finances. He renewed his promise to not impose new taxes for the foreseeable future. Still, critics claim that Lopez Obrador’s policies promote a bipolar world that favors the elite rich and the extremely poor. If his policies do not aim to improve the middle class, this could create a policy vacuum and invite an extremely conservative authoritarian shift in future Mexican politics.

Lopez Obrador’s once high approval ratings have declined since the onset of the pandemic in March. One July poll states that his approval rating is 39%, and his disapproval rating 58%. Lopez Obrador set a poor example by not wearing a face mask, and he has been ridiculed for his soft stay-home orders and low coronavirus testing rates. Yet nationwide school closings and a “traffic light monitoring system” to evaluate virus infection and death rates have helped slow infection rates. Still, Mexico is among the top 10 countries with the highest coronavirus infection and death rates in the world.

To boost these declining figures, Lopez Obrador visited President Donald Trump in July to celebrate the implementation of the U.S.-Mexico-Canada Agreement (USMCA). Yet Canadian Prime Minister Justin Trudeau did not participate, leaving the meeting to the two principals. Surprising to some, the bilateral meeting — although heavily criticized prior to Lopez Obrador’s departure as a violation of campaign promises (reminiscent of Trump’s five-hour visit to Mexico in 2016) — went off without a hitch. Trump agreed to the visit to divert attention from his own failures regarding the coronavirus, and his efforts to dismantle the Affordable Care Act. Still, Trump cannot repeatedly insult Mexican immigrants and then expect a photo op with the president of Mexico to make it all better.

While few expect excessive economic gains from the USMCA, it will not denigrate Mexico’s economy or stop its recession. U.S. critics, and some Mexican ones, question their leaders’ inclinations toward authoritarianism. Yet few consider the initial prerequisites of Lipset and Przeworski, that the majority of the nation earn less than $6,600 income per capita to become one. A return to authoritarianism is possible in these times, Even with Lopez Obrador’s pro-populist MORENA party in charge.

61% of Mexicans believe they are “middle class”; only 12% really are

A study released by the New York Times went viral through social networks, after it revealed something that few Mexicans know, that most of the country has been deceived and despite the fact that many believe they are middle class, really only 12% are.

In the article they highlight that approximately 61% of Mexicans assure that they live in adequate conditions to be classified as part of the “middle class” of the country, however the lack of a sufficient economy to satisfy such simple things as medical services, security social, drainage, education, home services and the volume of working hours show that this belief is a lie.

According to the foregoing, framed by what has been said by the Social Development Index of Evalúa of Mexico City, a Mexican would need to earn an average of 16 thousand pesos and work less than 48 hours to be middle class. 

Under AMLO, reality dictates that most of us now live in moderate poverty, believing ourselves to be middle class.

Source: cadenanoticias.com ,northamericanproject.com

Mexico City Post

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