BETWEEN UNEMPLOYMENT AND INSECURITY IN MEXICO

One of the objectives stated in the preamble of the offi cial text of the North American Free Trade Agreement (NAFTA) is to guarantee sustained growth of the member countries—particularly in Mexico—such that Mexican workers would enjoy increases in both the amount and quality of employment and earnings. Mexico’s economic policy, based on an open-market economy and accentuated by entry into NAFTA, has resulted in the poor performance of the national economy in terms of creating quality jobs and addressing the erratic and feeble growth of labor income. Mexico’s global trade defi cit is growing despite the increase in its trade surplus with the United States. Th e race to the bottom—brought about by the decision to distort the competitive performance of the export sector by paying low wages to the majority of Mexican workers—has brought benefi ts solely to large companies, the fi nancial sector, and a reduced layer of administrative and professional workers earning high salaries. Th is chapter will show that: • Since NAFTA took eff ect, Mexico has experienced a continual increase in the precarious nature of employment. • Real wages and salaries have followed an erratic growth pattern and, in most sectors, have never returned to levels achieved at the beginning of the 1990s. • Th e agricultural sector has suff ered a large and steady loss of employment. • Corporate earnings have grown while inequality in income distribution has followed a volatile trend. • Mexico’s primary structural problem is growing dependence on global imports