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Earning a Living: A History of Real Wage Studies in Twentieth-Century Mexico

Published online by Cambridge University Press:  05 October 2022

Jeffrey Bortz  and
Marcos Aguila
Jeffrey Bortz
Affiliation:
Appalachian State University
Marcos Aguila
Affiliation:
Universidad Autónoma Metropolitana–Xochimilco
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Abstract

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Real wages describe changes in the material standard of living of wage earners. This article reviews the national experience of Mexico through the twentieth century, surveying more than thirty studies from the late Porfiriato to the opening of the twenty-first century. The data suggest that real wages follow a long-term cyclical pattern of alternate periods of declining and rising wages. As a consequence, twentieth-century Mexico was not kind to workers because the gains of one period seem to be offset by falls in the next. Wage trends in Mexico and the rest of Latin America seemed to follow similar paths, except during the years following Mexico's revolution, when a new labor regime especially benefited the country's wage earners. Following a significant downturn in the 1940s, workers in Mexico and Latin America experienced a favorable period of income growth during the postwar boom. The debt crisis of the 1980s induced a long decline that continued through the early years of globalization.

Resumen

Resumen

Las mujeres constituyen en cantidad desproporcionada la mayor parte de las personas pobres en el mundo y América Latina no es la excepción a este desafío. A pesar de esto, muy pocos estudios de política social en la región han investigado por qué la provisión de ayuda basada en el género varía entre los distintos países. Este artículo analiza esta pregunta a través de una mirada histórica, comparando Chile y Uruguay y concluye que la variación en la política social de género de los dos Estados es el resultado de un proceso de dos etapas. Inicialmente, la diferencia de género entre Chile y Uruguay está radicada en factores históricos que incluyen la participación de la fuerza laboral femenina, la capacidad de movilización de las mujeres, las características del sistema de partidos políticos, y la retroalimentación de políticas. Estas diferencias se ampliaron entre ambos países cuando se encontraron cada uno bajo regímenes autoritarios. Mientras el régimen militar de Pinochet decretó reformas económicas regresivas desde el punto de vista de género e institucionalizó el poder de la derecha y de la iglesia, el régimen uruguayo fue más neutral desde el punto de vista de género en la aplicación de sus políticas.

Type
Research Article
Information
Latin American Research Review , Volume 41 , Issue 2 , June 2006 , pp. 112 - 138
Copyright
Copyright © 2006 by the University of Texas Press

References

1. The authors thank Sarah Koning for research assistance and Jonathan Brown, Alan Knight, and Fred Wallace for useful suggestions on earlier drafts.

2. Rosemary Thorp, Progress, Poverty and Exclusion. An Economic History of Latin America in the Twentieth Century (Baltimore: John Hopkins University Press, 1998), 281. In the back cover of her study, she commented, “What did the Latin American economies achieve in the course of one hundred years? Per capita income increased five fold, yet today it is lower in proportion to the industrial countries than it was a century ago. Modern infrastructure was built and industry grew to 25 percent of GDP, but the region's share of the world trade was halved. Social indicators such as life expectancy and literacy improved dramatically, but poverty did not.” Neither did wages, we might add.

3. In Mexico, the number of pesos for a day's labor is called la jornada.

4. Other factors also influence the standard of living, such as number of hours worked or employment shifts.

5. Charles H. Feinstein, “Pessimism Perpetuated: Real Wages and the Standard of Living in Britain during and after the Industrial Revolution,” The Journal of Economic History 58, no. 3 (1998): 625. Perspectives on work, housing, food, drink, nutrition, leisure and culture are in F. M. I. Thompson, ed., People and Their Environment. The Cambridge Social History of Britain, 1750–1950 (Cambridge: Cambridge University Press, 1990).

6. On the politics of industrial wages during the revolution, see Jeffrey Bortz, “The Revolution, the Labor Regime, and Conditions of Work in the Cotton Textile Industry in Mexico, 1910–1927,” Journal of Latin American Studies 32, no. 3 (October 2000): 671–703. Bortz argues that the workers' revolution within the revolution was an important and often overlooked element of Mexico's upheaval. See, by the same author, “Authority Reseated: Control Struggles in the Textile Industry during the Mexican Revolution,” Labor History 44, no. 2 (May 2003): 171–188.

7. “Importancia del estudio de la economía mejicana,” El Economista Mexicano, October 21, 1911.

8. El Imparcial, December 23, 1911, 1.

9. El Imparcial, January 21, 1912, 1; “Tarifa Mínima Uniforme,” 31 July 1912, box 17, file 6, Archivo General de la Nación (AGN), Departamento del Trabajo (DT), Mexico City.

10. A legal perspective is in Graciela Bensusán Areis, “Institucionalización laboral en México. Los años de la institucionalización jurídica (1917–1931)” (PhD Diss., Universidad Nacional Autónoma de México, 1992). She offers an updated version in El modelo mexicano de regulación laboral (Mexico: Plaza y Valdés, 2000). For state government legislation, see Felipe Remolina Roqueñí, El Artículo 123 Constitucional (Mexico: Secretaría del Trabajo y Previsión Social, 2000); and Remolina, Evolución de las instituciones del derecho del trabajo en México (Mexico: Secretaría del Trabajo y Previsión Social, 1976). For the case of Veracruz, see R. Jorge Ortiz Escobar, Legislación laboral veracruzana, vol. 1 (Xalapa: Universidad Veracruzana, 1999). The section on wages in the 1918 law drafted by Cándido Aguilar was the basis for the wording of the 1931 federal law, which is still in place.

11. Jonathan Brown, Oil and Revolution in Mexico (Berkeley: University of California Press, 1993), 364.

12. Manuel Aparicio Güido, Resúmenes de Sociología y de Economía Social (Xalapa: Editora de Gobierno, 1923), 126.

13. Matías Romero, “Labor and Wages in México,” in Mexico and the United States. A Study of Subjects affecting their Political, Comercial, and Social Relations, Made With a View to their Promotion (New York: G. P. Putnam, 1898), 501–558.

14. Secretaría de Fomento, Colonización e Industria, Departamento del Trabajo de los Estados Unidos Mexicanos, Iniciativa y decreto para su creación (México: Departamento del Trabajo, 1912).

15. See, for example, “Canasta Obrera,” 1914, box 68, file 1, AGN, DT.

16. Manuel Aparicio Güido, Resúmenes de sociología y de economía social (Xalapa: Editora de Gobierno, 1923), 198.

17. Ibid., 127.

18. Ibid., 128.

19. Jesús Silva Herzog, Un estudio del costo de la vida en México (Mexico: UNAM, 1989), 41.

20. Ibid., 50–72.

21. For various estimates, see Aurora Gómez-Galvarriato, “The Impact of Revolution: Business and Labor in the Mexican Textile Industry, Orizaba, Veracruz 1900–1930” (PhD diss., Harvard University, 1999), 685; Federico Bach and Margarita Reyna, “El nuevo índice de precios al mayoreo en la Ciudad de México de la Secretaría de la Economía Nacional,” El Trimestre Económico 10, no. 37 (1943); Marcos Tonatiuh Aguila M., “Pequeñas grandes victorias: Los mineros de la Real del Monte entre la Gran Depresión y el Cardenismo,” Marcos Tonatiuh Aguila M. and Alberto Enríquez Perea, editors, Perspectivas sobre el Cardenismo. Ensayos sobre economía, trabajo, política y cultura en los años treinta (Mexico: UAM-Azacapotzalco, 1996), 145; Guadalupe Rivera Marín, El mercado de trabajo: Relaciones obrero-patronales (Mexico: FCE, 1955), 141; Antonio Prado Vértiz, “El problema económico de la alimentación infantil en México,” El Trimestre Económico 17, no. 4(1951).

22. Silva Herzog, Un estudio del costo de la vida, 75.

23. Juan de Dios Bojórquez, a leading member of the familia revolucionaria, served on the Congreso Constituyente in 1916, wrote one of the early novelas indigenistas, was a minister of labor and then minister of government with President Lázaro Cárdenas, and still later, president of the Sociedad Mexicana de Geografía y Estadística.

24. Benito Contreras García, “El salario en México” (BA thesis, UNAM, 1932), table 7.

25. Ibid., 37.

26. Minimum wage legislation in Latin America did not conform to a single pattern. For instance, it was forced downwards as a result of the Great Depression in Argentina, where the government resisted labor's demands. Laura Randall, An Economic History of Argentina in the Twentieth Century (New York: Columbia University Press, 1978), 132. Broadly speaking, however, the Great Depression brought state intervention and labor reforms in most of the region, from the Estado Novo in Brazil to Cardenismo in Mexico. Ian Roxborough, “The Urban Working Class and the Labor Movements in Latin America,” in Leslie Bethell, ed., The Cambridge History of Latin America, vol. 4 (Cambridge: Cambridge University Press, 1984), 219–290.

27. Alberto Bremauntz, La participacion en las utilidades y el salario en México (Mexico: n.p., 1935), 39.

28. Silva Herzog, El petróleo en México (Mexico: PEMEX, 1940).

29. El Potosí Mining Company, 1938 Annual Report to Mr. W. J. Quigly, President, Howe Sound Company, New York (Chihuahua, January 1939), 17–21. Among the items involved in the complaints by company officials were the increasing costs of vacation days, rentals, bath operations, obligatory rest days and hospital benefits.

30. Carlos Salas and Teresa Rendón, “La distribución del ingreso,” Agustín Herrera y Lorea San Martín, editors, México a cincuenta años de la expropiación petrolera (Mexico: UNAM, 1989), 223.

31. Enrique Cárdenas, La industrialización mexicana durante la Gran Depresión (Mexico: Colmex, 1986), 151–3. Cárdenas estimates an increase of real wages between 7 to 20 percent depending on the sector. See also Roxborough, “Urban Labour Movement,” 233–34.

32. Pedro Merla, Estadística de salarios (Mexico: Talleres Gráficos, 1942).

33. The WPI was not a retail index and the RPI did not adjust values according to consumer spending patterns, so that the WCLI seemed the most reasonable alternative. Although the three indexes show similar overall trends, each has a different percent change for each year.

34. Merla used the difference between the rise in the WCLI and wage rates but does not make clear the wage source.

35. Merla, Estadística de salarios, 10–11.

36. Francisco Macín, Los salarios en México (Mexico: FCE, 1947), 160.

37. Ibid., 12.

38. Ibid., 63.

39. Ibid., 52, 63.

40. Juan F. Noyola Vazquez and Diego G. López Rosado, “Los salarios reales en México, 1939–1950,” in Leopoldo Solís, ed., Economía mexicana (Mexico: FCE, 1983), 343–350.

41. Ibid., 347.

42. Clark Reynolds, The Mexican Economy (New Haven: Yale University Press, 1970), 22.

43. Noyola Vázquez and López Rosado, “Los salarios reales en México,” 348.

44. Peter Gregory, The Myth of the Market Failure. Employment and the Labor Market in Mexico (Baltimore: John Hopkins University Press, 1986), 222.

45. Ibid., 222–3, 228.

46. Roxborough, “Urban Labour Movement,” 238.

47. Ibid., 250–1, 267.

48. Marcos Tonatiuh Aguila, Economía y trabajo en la minería mexicana. La emergencia de un nuevo pacto laboral entre la Gran Depresión y el Cardenismo (Mexico: UAM-Xochimilco, 2004), 133–4.

49. Based on Kevin J. Middlebrook, The Paradox of Revolution. Labor, the State and Authoritarianismo in Mexico (Baltimore: John Hopkins University, 1995), 126, Table 4.1.

50. Carlos Márquez Padilla y Ma. Amparo Casar, “La política de salarios mínimos legales: 1934–1982”, Economía Mexicana, no. 5, (1983), 241–2.

51. Middlebrook, The Paradox of Revolution, 164.

52. In 1948 the government deposed the independent leadership of the railroad unions, an event known as the charrazo because of the nickname of the leader of the government-imposed faction, Jesús Díaz de León, El Charro.

53. Mike Everett, “The Evolution of the Mexican Wage Structure, 1939–1963,” (mimeograph, El Colegio de Mexico, 1967) and “The Role of Mexican Trade Unions, 1950–1963” (PhD Diss., Washington University, 1967).

54. Everett, “The Evolution of Wage Structure,” 1967a, 11–12, 47.

55. Jeffrey Bortz, Los salarios industriales en la Ciudad de México, 1939–1975 (México: FCE 1988), 270.

56. Ibid.; see also Jeffrey Bortz, et al., La estructura de salarios en México (Mexico: Secretaría del Trabajo y Previsión Social, 1985), chapter 4.

57. Jeffrey Bortz and Edur Velasco, “El ciclo del salario en México 1940–1986,” in Jesús Lechuca Montenegro, editor, El dilema de la economía mexicana (México: Universidad Autónoma Metropolitana, 1987), 143–156.

58. A useful study on the impact of the neoliberal economic policy since the 1980s is in Kevin J. Middlebrook and Eduardo Zepeda, editors, Confronting Development: Assessing Mexico's Economic and Social Policy Challenges (San Diego: University of California Press, 2003), 31–36.

59. Carlos Márquez Padilla, “Nivel del salario y dispersión de la estructura salarial (1939–1977),” Economía Mexicana, no. 3 (1981): 53–54.

60. Carlos Márquez Padilla, “Las diferencias salariales interindustriales, 1965, 1970 y 1975,” Economía Mexicana, no. 4 (1982): 157–165.

61. Carlo Márquez Padilla, “La política de salarios mínimos legales: 1939–1982,” Economía Mexicana, no. 5 (1983): 221–260.

62. Gregory, The Myth of the Market Failure.

63. Gregory's faith in markets has been part of his contributions to the field since his Industrial Wages in Chile (New York: Cornell University, 1967), where he states “a wage system will fulfill its incentive and allocative functions better, the greater the proportion of the local compensation that is a function of the level or quality of workers' performance on the job.” Among the “distortions” analyzed by Gregory were the social security benefits (102–3).

64. John Wells, “Industrial Accumulation and Living Standards in the Long-Run: The São Paulo Industrial Working Class, 1930–1975,” The Journal of Development Studies 19, no. 2 (January 1983): 145–170; and The Journal of Development Studies 19, no. 3 (April 1983): 297–328,301.

65. Sebastián Galiani and Pablo Gerchunoff, “The Labor Market,” in A New Economic History of Argentina, Gerardo Dellapaolera and Alan M. Taylor, eds. (Cambridge: Cambridge University Press, 2003), 124.

66. Alejandro Valle Baeza and Gloria Martínez González, Los salarios de la crisis (Mexico: UNAM, 1996).

67. Carlos Salas y Eduardo Zepeda, “Employment and Wages: Enduring the Costs of Liberalization and Economic Reform,” in Middlebrook y Zepeda, eds., Confronting Development, 522–558. A second article by both authors is “Empleo y salarios en el México contemporáneo,” Enrique de la Garza and Carlos Salas, coordinadores, La situación del trabajo en México (Mexico: Plaza y Valdés, 2003), 55–75.

68. Salas and Zepeda, “Employment and Wages,” 553.

69. Hernández Laos, Garro, and Llamas have estimated a proportional increase of the nonwage labor cost of firms relative to the workers total remunerations from 40.6 percent in 1980 to 46.8 percent in 1990 and 49 percent in 1995. Figures were significantly higher in Brazil for 1995 (58.2 percent), but lower for Chile (44.5 percent). Enrique Hernández Laos, Nora N. Garro Bordonaro, and Ignacio Llamas Huitrón, Productividad y mercado de trabajo en México (Mexico: Plaza y Valdés, 2000), 64–5, 267.

70. Ibid., 543.

71. Julio Boltvinik, “Nada qué festejar,” La Jornada, May 5, 2000.

72. Ibid., table 2.

73. Eduardo Zepeda y Ranjeeta Ghiara, “Determinación del salario y capital humano: 1987–1993”, Economía, sociedad y territorio 2, no. 5 (1999): 67–116.

74. Liliana Meza González, “Cambios en la estructura salarial de México en el periodo 1988–1993 y el aumento en el rendimiento de la educación superior,” El Trimestre Económico 67, no. 262 (April–June 1999): 189–226.

75. Hernández Laos, Garro, and Llamas, Productividad y mercado.

76. Jaime González Martínez y Abelardo Mariña, “Reestructuración de salarios en la industria manufacturera, 1982–1991,” Economía, Teoría y Práctica. Nueva Epoca, no. 4 (1995), 53–67.

77. Diana Alarcón and Terry McKinley, “Increasing Wage Inequality and Trade Liberalization in Mexico,” in Albert Berry, editor, Poverty, Economic Reform, and Income Distribution in Latin America (Boulder: Lynne Rienner, 1998), 137–154.

78. See Oscar Altamir, “Income Distribution and Poverty through Crisis and Adjustment,” in Berry, op. cit., 43–78. A useful collection of articles is in Mauricio Cárdenas, editor, Empleo y distribución del ingreso en América Latina. ¿Hemos avanzado? (Bogotá, 1997). For the Chilean case, Sebastian Edwards and Alejandra Cox Edwards, “Economic Reforms and Labor Markets: Policy Issues and Lessons from Chile,” Economic Policy 15, no. 30 (April 2000), 183–231. An interesting comparison between Mexico and Chile during the 1980s is Raphael Bergoeing, Patrick J. Kehoe, Tomithy J. Kehoe and Raimundo Soto, “A Decade Lost and Found: Mexico and Chile in the 1980s,” Review of Economic Dynamics 5, no 1 (January 2002), 166–206. While this article stresses the difference between Mexico and Chile, there were strong similarities with Brazil, for which, Paulo Du Pin Calmon, James K. Galbraith, Vidal Garza Canto, and Abel Hibert, “The Evolution of Industrial Earnings Inequality in Mexico and Brazil,” in Review of Development Economics 4, no 2 (June 2000), 194–204. Also on Brazil, José Paulo Zeetano Chahad, “Population, Labor Force, and Labor Market in Brazil, 1960–1990,” in Maria J.F., Willumsen, and Eduardo Giannetti da Fonseca, eds., The Brazilian Economy: Structure and Performance in Recent Decades, 167–191 (Miami: North-South Center Press, 1997).

79. Gómez-Galvarriato, “The Impact of Revolution.” She also published “The Evolution of Prices and Real Wages in Mexico from the Porfiriato to the Revolution,” in John Coatsworth and A.M. Taylor, eds., Latin America and the World Economy since 1800 (Cambridge: Harvard University Press, 1998), 347–67; with Aldo Mussachio, “Un nuevo índice de precios para México, 1886–1930,” El Trimestre Económico, FCE, (México, 2001); and “Measuring the Impact of Institutional Change on Capital Labor Relations in the Mexican Textile Industry, 1900–1930,” in The Mexican Economy, 1870–1930: Essays on the Economic History of Institutions, Revolution and Growth, ed. Jeffrey L. Bortz and Stephen Haber (Stanford: Stanford University Press, 2002), 289–323.

80. Gómez-Galvarriato, “The Impact of Revolution,” 349–51.

81. Ibid.

82. Ibid., 367. She also cautiously added, “Yet, by no means can we conclude that if the Revolution had not taken place, these gains would not have taken place anyway.”

83. Ibid., 366. Appendix A3.9 details recorded strikes' outcomes at CIVSA from 1899 to 1928. Motives of successful strikes range from wage increments to reduction of working hours and prevention of firing of “agitators.”

84. Marcos Tonatiuh Aguila, Economía y trabajo, chapter 3. See also, Marcos Tonatiuh Aguila, “La Gran Depresión, en la raíz del Cardenismo,” in Lázaro Cárdenas: Modelo y legado (Mexico: INEHRM, forthcoming).

85. Of those mentioned here, this would include include Gómez-Galvarriato, Zepeda, Aguila, Alarcón, Meza, Mariña, Valle, Hernández Laos, Garro, and Llamas. Most studied in the United States, then developed their careers in Mexican universities.

86. See Stephen Haber, Noel Maurer, and Armando Razo, The Politics of Property Rights: Political Instability, Credible Commitments, and Economic Growth in Mexico, 1876–1929 (Cambridge: Cambridge University Press, 2003); Bortz and Haber, The Mexican Economy, 1870–1930; Coatsworth and Taylor, Latin America and the World Economy since 1800; and Carlos Marichal and Mario Cerruti, editors, Historia de las grandes empresas en México, 1850–1930 (México: FCE, 1997), among recent works.

87. Jack Triplett, “Measuring Prices and Wages,” The American Economic Review 67, no. 1 (February 1977). See also Christopher Hanes, “Changes in the Cyclical Behavior of Real Wage Rates, 1870–1990,” Journal of Economic History 56, no. 4 (December 1996), 837–861.

88. For instance, the percentage of consumption expenditure devoted to food in the United States decreased from 57.4 percent in 1875 to 23 percent in 1952 and to 11.3 percent in 1986. Hanes, “Changes in the Cyclical Behavior of Real Wage Rates,” 842.