Through the 1970s, the lot of the average Mexican continued to improve. The buying power of wages increased by 2.4 percent annually between 1971 and 1979. The government set guarantee prices for crops, subsidized agricultural credit, food for urban dwellers, and farm inputs such as fertilizer. Between 1970 and 1981, there was a 4.8 percent annual increase in job creation. The combination of rapid job growth, social programs, and government support for labor resulted in wealth becoming more evenly distributed during the 1970s. Those living in poverty declined from 75 percent of the population in 1960 to 48 percent in 1981.187
As a result of the 1982 debt crisis and the decision to adopt neoliberal economic policies, per capita government social spending declined by 32.7 percent between 1982 and 1988. To reduce imports, the peso was devalued and as a result inflation soared. Since wage increases lagged far behind inflation, the buying power of wages declined by more than 7 percent annually between 1983 and 1988. Rather than intervening to distribute the costs of the crisis, the government welcomed the decline in wages, since that lowered the cost of labor and made Mexico more attractive to foreign investors, whom the government expected to finance Mexican development.188
During the 1980s, 400,000 jobs disappeared, while at the same time the labor force increased by 8 million. Few jobs replaced those lost since both public and private investment declined. Those living on wages fared worse than those living on rents and property, thus worsening income distribution. Not only did income become less evenly distributed but there was also less to distribute as the per capita GDP declined by 10 percent between 1982 and 1987. The proportion of the Mexican population living in poverty increased from 68.5 percent in 1984 to 73.4 percent in 1989. By 1990, the average Mexican’s calorie intake approached half that recommended by the World Health Organization.189
In the wake of the 1994—1995 economic crisis, which led to a sharp increase in poverty, President Zedillo launched a new anti-poverty program known as Progresa. This program, which targeted the poorest rural families, was designed to break the intergenerational transmission of poverty. Benefits for those in the program included cash to buy food and scholarships of up to $25 a month awarded to children if they stayed in school. In addition, pregnant and nursing women, and children from four to twenty-four months of age received nutritional supplements. By the end of the Zedillo administration, some 2.6 million families, 40 percent of all rural families, had been included in the program. However, due to its not providing benefits to the urban poor, Progresa served only a quarter of the households in poverty. While Zedillo’s administration spent $93 billion to bail out the banking system, in 1999, it only allocated $540 million to Progresa, arguing that no more funds were available.190
Progresa was successful in that it resulted in longer school attendance, greater stature among children as a result of improved nutrition, and fewer illnesses in families covered by the program.
However, the program failed to substantially reduce poverty. At the end of the Zedillo administration, an estimated 54 million Mexicans lived in poverty.191
Based on its record under Zedillo, President Fox continued the Progresa program, although he changed its name to Oportunidades. He expanded its reach, targeting the urban as well as the rural poor. As a result of this expansion, by 2006 Oportunidades had a budget of $2.5 billion and covered 5 million households, slightly more than the entire population estimated to be living in poverty.192
The lack of jobs the poor can aspire to appears to doom the Oportunidades program to failure since it was founded on the notion that poverty results from insufficient education. However, given that Oportunidades does nothing to increase the number or quality of jobs being offered, as more beneficiaries of Oportunidades appear on the labor market employers will increase the educational requirement. Thus they might require waiters to have a secondary education not because it is necessary for the job but simply to reduce the number of job applications they must process. The number of jobs and income remain constant, despite workers having more years of education.193
The lack of progress in combating poverty indicates the importance of establishing coherence between poverty alleviation programs and economic reform. No poverty program can substitute for development policies that effectively incorporate the poor into growth-oriented sectors of the economy. Nor can poverty programs compensate for the loss of productive employment, the drastic reduction in wages, and lack of investment in productive and human assets. Similarly they cannot counteract the adverse impact of economic instability and the contraction of sectors from which the poor obtain their income.194
World History
