Minimum Wage and Equal Opportunity | Article by Roberto Velez

Equal opportunity is said to exist when people’s achievements are not attributable to factors beyond their control (also known as circumstances). In this sense, it is assumed that the rewards received are commensurate with the degree of their effort given their capabilities. In terms of economic remuneration, the main source of income for Mexican households is the labor market: almost two-thirds comes from subordinate and independent work. Thus, one of the policies that has had the greatest impact in recent years has been sustainable increase in minimum wage. From the point of view of equal opportunities and in order to expand the space of social mobility, it is advisable to actively and responsibly support these policies, that is, recognizing the existence of potential limitations.

One criticism of the equal opportunity approach is that it does not guarantee a minimum level of results. That is, if we assume that someone does not exert any effort, zero reward is justified, even if this implies, for example, falling below the survival threshold. Another criticism, which follows on from the previous one and directly affects the conditions of equal opportunity, is that, from a generational point of view, zero effort of the parents’ generation will represent a negative circumstance for the starting point of their children. Based on all of the above, the discussion about the level of the minimum wage is relevant and requires positioning.

Compared to zero effort, setting a certain minimum wage does not result in any inefficiency since, if it is sustainable given the productive capacity of the economy, it will end up in the hands of the people who are putting in the effort anyway. job search. Also, if a person does not try his best after getting a job, there will be a potential consequence that is nothing more than losing him. Regarding the transfer from parents to children, circumstances, to the extent that the minimum wage is sufficient to cover the basic needs of the home, such as those related to nutrition and health and educational needs, among others. It is more feasible to achieve the minimum starting level required for children to acquire the skills to compete.

In connection with the above, from the point of view of equal opportunities for social mobility, maintaining the policy of a sustainable increase in the minimum wage is justified. Moreover, it goes without saying that what is enshrined as a right in the Constitution itself has not yet been realized. Thus, from the Espinosa Iglesias Research Center (CEEY), based on a public policy document prepared by my colleague Raimundo Campos, we have proposed, in the current electoral campaign, an increase path that will take us within six years to the constitutionally established level.

Of course, minimum wage policies are not enough to solve all the problems of the Mexican labor market. Regarding equal opportunity, there are other outstanding issues that are equally or even more important, such as eliminating existing mechanisms of discrimination based on personal characteristics (for example, gender, ethnicity and skin color). Likewise, other structural issues that underpin women’s low labor force participation rates, such as imbalances in the care burden, need to be addressed. I will discuss all these areas, including as proposals within the framework of the election campaign, in my next issues.

*Roberto Velez Grajales is the Executive Director of CEEY. X: @robertovelezg .