Sunday, January 5, 2014

U.K. report: life is getting harder, not easier for Mexicans

U.S. expert queries whether new Mexican taxes will be used to help the masses

Guadalajara -
In an article published yesterday by the respected British magazine The Economist, an unidentified reporter recounted his experience outside a sprawling Mexico City market on New Year's Eve day.

"People without enough money to shop were sifting through piles of discolored and discarded avocados and tomatoes, wrapping what was still edible in scraps of newspaper and furtively carrying them off for their own more meager supper. For many of these Mexicans, life is getting harder."

The article, A few more pesos, a lot more stress, notes that new federal consumer taxes which went into effect four days ago on junk food, soft drinks and - curiously - pet food, will hit the economically stressed the hardest. Comida chatarra, as snacks, sweets and items of low nutritional value but high caloric intake are called here, is often the diet of choice of the impoverished, as are refrescos, of which Mexicans are the world's largest consumers. Peña Nieto two for three on reform packages, as House of Deputies passes tax bill. Not surprisingly, every year world health organizations report that obesity, especially juvenile obesity, poses a major risk for the nation's health.

Delicious pan dulce, delivered fresh by neighborhood vendors . . . but a little more expensive in 2014

Added to the burden is the rising cost of public transportation in Mexico City, Guadalajara and other places, where millions rely upon buses and subways to get wherever they must go. Guadalajara bus fares rose from six to seven pesos (about 53 cents) several days ago, and commuters are livid. They have called for a Critical Mass protest on Jan. 7, made famous by San Francisco cyclists more than two decades ago.

The food taxes "end up clobbering the poor," argues The Economist, which noted, as MGR has over the past year, that 45% of Mexicans are impoverished. 53.3 million - that's how many Mexicans live in poverty.

The magazine quoted the United Nations Economic Commission for Latin America and the Caribbean (CEPAL in Spanish), which reported in December that through the third quarter of 2013, the number of Mexicans who cannot adequately feed themselves had risen by 13% since 2010, representing another million persons in distress. CEPAL's study found that half of Mexican children live in impoverished households. In relatively prosperous Jalisco, state authorities say that amounts to 1.1 million persons under 17.

According to The Economist, a minimal healthy daily diet costs Mexicans at least 40 pesos, an amount which has increased 21% in the past three years. The minimum daily wage in major cities like Mexico City and Guadalajara is 67 pesos a day. Mexican minimum wage in 2014 will be $5 dollars - a day. The magazine reported that "the bottom 50% of the income scale spend almost half of what they earn on food, while the top 10% spend less than a quarter." Mexico: 14th largest economy, but citizens rank 81st in food purchasing power.

Last summer researchers at the University of Guadalajara delivered an equally dire report on the state of affairs in Jalisco state, with statistics which shocked many in government and academia. Over 60% of Jaliscans earn less than subsistence income.

A Mexican affairs researcher at the Woodrow Wilson International Center in Washington told The Economist that Mexico's "fiscal reform has been much more focused on the income side rather than the spending side," expressing doubt that the new federal taxes will change the plight of the nation's burgeoning poor.

CEPAL noted in its year end report that Mexico is facing the most challenging circumstances that it has confronted since the crisis of 2008, when the nation's economy grew only 1.5%. But last year growth is expected to be even less, perhaps barely clearing 1%. The official government stats will be reported this month. Wal-Mart sales in free fall a good barometer of a Mexican economy on the skids.

Apr. 29 - 54% of Mexico's children live in poverty
Jan. 30 - Mexico gets its very poor 2013 economic report card
Jan. 4 - Many Mexicans heavily in debt, with no way to pay
July 29 - Mexican Left lambasts poverty war: "a massive failure"

Dec. 23 - PEMEX reforms will bring 500,000 "high quality jobs" to Mexico, says energy secretary
Dec. 7 - Sluggish labor market a victim of Mexico's economic backslide in 2013
Oct. 12 - In a land where many are poor, Mexican millionaires are increasing by leaps and bounds
Nov. 26 - Mexico's economic woes take a toll on Yucatán business
Aug. 24 - Mexican unemployment stats paint a bleak picture for the most well educated
Aug. 21 - Sluggish Mexican economy worries foreign investment experts
June 12 - 59% of Mexicans remain trapped in underclass
May 26 - Mexican population is soaring, and most are young
Mar. 16 - Huge cost of consumer credit in Mexico is going up again

Nov. 16 - Gross economic disparity still a hard fact of Mexican life
July 29 - Yucatán has well-educated labor force, but offers one of Mexico's worst job markets
July 23 - Peña Nieto will be thinking more about rock-hard Kansas farm ground than drug cartels
Apr. 23 - AMLO: Economic inequality is the primary cause of Mexico's insecurity

Extreme poverty by state, reported in October 2013
Oct. 16 - 74% of those who live in the most extreme poverty are in 10 of Mexico's 32 jurisdictions. Chiapas, Guerrero (Acapulco) and Oaxaca easily lead the pack with double digits. The three states which comprise the Yucatán peninsula have an extreme poverty average of 9.5%.
Oct. 16 - 53 de cada 100 niños en México vive en pobreza, y 12.1% la padece en extremo

© MGRR 2014. All rights reserved. This article may be cited or briefly quoted with proper attribution or a hyperlink, but not reproduced without permission.

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