López Obrador Vows ‘Poverty’ for Mexican Government

The decision has set up a standoff between the president and the courts, writes Luis Gómez Romero.

File 20190207 174880 ydnlpm.jpg?ixlib=rb 1.1
López Obrader wants to cut salaries for all government workers in Mexico, including himself.
(AP Photo/Rebecca Blackwell0)

By Luis Gómez Romero, University of Wollongong
The Conversation

It’s rare for presidents to advocate for poverty, but that’s just what Mexican President Andrés Manuel López Obrador is doing.

At a press conference on Feb. 1, López Obrador said his government would embrace what he called Franciscan poverty if it would “transfer funds to the people” and achieve “development, jobs and welfare.”

Francis of Assisi was a Catholic saint who disdained material wealth to follow Christ as a poor man.

López Obrador’s poverty vow is more bureaucratic than religious. As part of an ambitious effort to fight poverty and reduce government corruption, the president proposed to cut the salaries of public officials, including his own, slash federal budgets and lay off 70 percent of non-unionized federal workers. An estimated 276,290 public employees will lose their jobs.

After lawsuits were filed by opposition political parties and Mexico’s National Human Rights Commission, the Supreme Court in December granted a temporary suspension of López Obrador’s new Federal Law of Public Servant Salaries.

Saying that even austerity budgets must guarantee the basic functioning of the government, Justice Alberto Pérez Dayán said López Obrador’s plan cannot go into effect until the Supreme Court rules on its constitutionality.

The decision has set up a standoff between the president and the courts, with Mexico’s federal budget and judicial independence hanging in the balance.

Reducing Inequality, One Tree at a Time

López Obrador and his leftist Morena Party won a landslide victory in Mexico’s 2018 general election on promises that they would transform Mexico, empowering the underprivileged in a country with gaping inequality.

Since taking office on Dec. 1, López Obrador has suggested creating some 20,000 jobs in fruit production and wood harvesting by planting trees on a million acres of land in rural southern Mexico. He has also proposed paying small monthly pensions of up to 2,550 pesos – around $134 – to Mexicans above the age of 68 and to people with disabilities who lack social security benefits.

Leftist governments usually fund social programs like this by raising taxes on the wealthy. López Obrador says he won’t do that. Instead, his administration hopes to recover public funds by cracking down on rampant corruption and saving money with fiscal austerity. That’s where the salary cuts and mass layoffs come into play.

López Obrador is an admirer of Benito Juárez, the indigenous president who ruled Mexico from 1858 to 1872. Juárez extolled the virtues of selfless public service, saying public servants should “devote themselves to work assiduously while resigning to live in … honorable modesty.”

The Los Pinos presidential palace in Mexico City is now open to the public.
(Drkgk/Wikimedia, CC BY-SA)

López Obrador flies commercial and has refused to take up residence in the Los Pinos presidential palace, turning it into a cultural center.

He also set his salary at a moderate 108,000 pesos, about $5,700 a month – roughly $68,400 a year. That’s 60 percent less than his predecessor, Enrique Peña Nieto, who earned the equivalent of $14,200 a month in 2018.

The wage gap between average workers and the Mexican head of state was the highest in the world last year, according to a report by the IG Group, a British financial services company. On average, Mexican workers earn around $15,311 a year.

López Obrador’s voluntary pay cut has drastically reduced the difference between his income and everyone else’s.

Attacks on Judiciary

Since the Mexican Constitution mandates that no public official should make more than the president, however, López Obrador has also effectively capped wages for all government employees.

To his mind, that’s a good thing.

The days of having “a rich government with a poor population” are over, the president told a crowd in December. He was speaking in the western state of Nayarit, pledging aid for victims of a recent hurricane.

In the same speech, López Obrador attacked the Supreme Court’s decision to suspend his pay cut plan, accusing Mexican judges – not just Justice Pérez Dayán – of selfishly wanting to keep their salaries and benefits intact.

In fact, Article 94 of the Mexican Constitution explicitly prohibits reducing the salary of judges at any time during their appointment, a guarantee of judicial independence that dates back to 1857.

In 2018, Supreme Court justices earned 269,215 pesos – around $14,000 a month.

The Supreme Court has since agreed to take a 25 percent pay cut “in accordance with the new policy of austerity that the presidency has demanded of the Supreme Court of Justice.” That puts their 2019 salaries at about $10,500 a month, not including benefits.

In adopting this measure, the Supreme Court also clarified that, as an independent branch of government directly protected by the Constitution, the judiciary is not bound by the salary standards established by López Obrador. The justices will decide how to implement austerity within the court system.

Battles Ahead

The Supreme Court is expected to make a definitive ruling on the two lawsuits challenging the constitutionality of the Federal Law of Public Servant Salaries some time this year.

Over 20,000 public servants have also filed individual complaints in federal courts, saying salary cuts violate their labor rights. Under Mexican law, legislation is deemed retrospective – and thus unconstitutional – if it affects the vested rights of individuals. Employers, including the federal government, cannot unilaterally reduce their employees’ wages.

At least 12,817 Mexican public servants have already been laid off under López Obrador’s austerity plan. Many of those who have kept their jobs have seen their social security benefits and vacation time eliminated under the new law.

Beyond its questionable constitutionality, López Obrador’s de facto salary cap on public servants does not take into account the expertise, seniority or skills required of high-level positions. Less than $5,700 a month is simply insufficient payment for the most highly skilled workers, Mexican constitutional expert Elisur Arteaga told the newspaper La Razon last year. He expects talent will flee the government for the private sector.

Nobody in Mexico thought that transforming the country would be easy when they voted López Obrador into office. To paraphrase Mexican pundit Jesús Silva-Herzog, fixing Mexico’s bloated and corrupt government was work for a surgeon with a scalpel.

López Obrador, it’s becoming clear, prefers a machete.The Conversation

Luis Gómez Romero is senior lecturer in human rights, constitutional law and legal theory at the University of WollongongIn 2002, he contributed to a constitutional amendment aimed at establishing that no public servant can receive remuneration higher than that established of the president of Mexico, which later became law.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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17 comments for “López Obrador Vows ‘Poverty’ for Mexican Government

  1. February 18, 2019 at 21:32

    Are you sure his name is not Trump ? Trump gives all his POTUS pay to charity. OLD Lopey will have a duel with the Mexican Supreme court and most likely lose . However an angry populace with machete’s can make the courts mighty nervous. Of course a compromise will be the only solution and hopefully the laid off workers will find employment. If he raises his pay enough he may survive with his life and this humble selfless man may improve Mexico. The private sector will not be affected as much but their Govt. bribes will be much more effective and powerful with bureaucrats. He is a good man with high ideals. He may embarrass the courts into great concessions. Good Luck !

  2. Rob Roy
    February 17, 2019 at 23:53

    How long will it be before the US decides to change the regime in Mexico, just declare another guy president or attack yet another sovereign country?

  3. Paul G.
    February 15, 2019 at 09:05

    We should put someone like him in charge of the budget of our Pentagon.

  4. dhinds
    February 15, 2019 at 02:14

    I’ve resided in Mexico since 1974 and it’s been very interesting.

    Mexico was the country that changed most without losing control until it did.

    Two things are certain:

    1.- NOBODY knows how this is going to pan out; and

    2.- Whatever occurs is good because the will of the people was finally respected , which is a hell of a lot better than what happens under the USA’s profoundly corrupt duoply!

    Since the early 1990’s Mexico began creating an autonomous Electoral Institute which as that suggests was funded by but not under the control of the government itself.

    THAT is what allowed Mexico to change and nurture a multiplicity of electoral options, which is simply IMPOSSIBLE in the USA since the Commission on Presidential Debates was created expressly to prevent third party candidates from getting the exposure they need to present their alternatives to the public and win elections.

    The USA is literally a Banana Republic, electorally speaking – which is part of why the abuse of authority is rampant there, which did not begin with Donald Trump – living proof of what was already a profoundly dysfunctional electoral system, designed to insure the progressively increasing injustice that the nation was founded on:

    Only male European adults with property could vote!

    If you want to have a country that’s worth a sh*t, get money out of politics and politicians out of the electoral process.

  5. carlusjr
    February 14, 2019 at 20:04

    “On average, Mexican workers earn around $15,311 a year.” This is sentence is either purposely blatantly false or mistakenly highly misleading. Maybe there is a strange definition of “Mexican worker” that Ramirez has found somewhere. Maybe he’s a bit out touch, living in Australia. Or maybe the dollar sign he is using is actually another currency of some sort and he made a mistake not converting it. His figure works out to be 1275 US per month. The average worker in Mexico makes about half of that, if that much. Knowing this, I would say that the article is written by someone who wants to imply that Obrador is inflicting hardship on government workers, when he is not-that he is not using an informed and humane judgement, when he is.

    • dhinds
      February 15, 2019 at 02:18

      Wages vary considerably with the region.

  6. February 14, 2019 at 08:57

    This article is pure Soros. “Human rights” and “Judicial independence” are Soros weapons for use against decent national governments.

    Consortium shouldn’t be taking the Soros side. The editors ought to know the difference, ought to recognize the OBVIOUS indications of globalist evil.

  7. Jeff Harrison
    February 14, 2019 at 00:26

    Sounds like a good Idea to me. I like the brain drain argument. If government employees make that much more than ordinary Mexicans where’s the job source that will pay them as much as the government?

  8. Tom Kath
    February 13, 2019 at 23:47

    “Public service should be honourable”. Whether it is considered honourable, or a wealth grab, depends on public perception. Under the type of capitalism currently adhered to, the highest honour is measured in money! Until people can admire something MORE than money, service will not be honourable I’m afraid.
    I sincerely applaud Obrador’s attempt to highlight this distinction.

  9. John Wright
    February 13, 2019 at 22:48

    While I admire his idealism, lowering government wages now will result in a public sector brain drain and make it easier and more likely that government employees will take bribes to maintain their standard of living.

    Lopez Obrador should first reign in the corruption that plagues both the public and private sectors, encourage local sustainable economic growth (especially small farms) to reduce poverty, make the tax system more equitable and then see how government salaries compare as the economy becomes more balanced.

    • Sam F
      February 14, 2019 at 19:32

      Lower pay does work both ways, discouraging the greedy from government while encouraging the dishonest in government to take bribes. But higher pay does not make the greedy honest, so one has to enforce against corruption either way.

      It is interesting to see their judiciary discredit itself by making an excuse to keep high salaries.

      The larger problem is fighting corruption of elections and mass media by economic power. It would be good to read a study of solutions to that critical problem of the US, in other countries.

  10. Lilith
    February 13, 2019 at 22:24

    Kudos to Mr. Lopez Obrador for having the courage, integrity, honesty, as well example to offer this solution to Mexico’s governmental corruption!

    This maneuver is noble on it’s face, and I wish Mexico great success!

    Perhaps this can be an example to other countries if they achieve a positive outcome, and are not blockaded by bureaucratic greed before even trying this obvious solution to governmental malfeasance..

  11. Anne Jaclard
    February 13, 2019 at 21:53

    I’m surprised this hasn’t received more publicity. A fantastic move which if repeated in the UK and US would bag many war criminals:

    “Mr López Obrador has, in addition, promised to hold a “people’s poll” on March 21 on whether Mexico’s past five presidents should be put on trial for pursuing “failed” neo-liberal economic policies that he claimed “pillaged” the country.”

    – The Financial Times

  12. cjonsson1
    February 13, 2019 at 19:58

    I don’t have a good feeling about this austerity deal. It sure hasn’t helped the US. Lift the lower income people up and tax the super wealthy.

    Not knowing more about the situation, that’s my guess. If you have other opinions or knowledge about the government in Mexico, please pass the on.

    Carlos Slim, where’s the beef?

    • cal
      February 13, 2019 at 20:52

      But part of politics is working for the deal of the possible. Given the rampant corruption and pragmatic collaboration between cartel, govt, and mega-corporations, if AMLO tries to target the big fish, he’s likely to find himself mired in endless civil war. By gutting the govt of pay, he’s attacking the patronage clique that made PRI synonymous with govt and the feeding-trough that PAN tried to take over. Calling it austerity, without its proper context, ignores Mexican history and is somewhat silly. He’s not doing it to pay interest on the global imperium’s racket IMF. Mexico’s just a really jacked up country, and trying to give it back to regular people, away from millionaires, oligarchs, and drug-lords, is a rough road. Under AMLO, Mexico’s economy could become self-reliant enough to become a center of gravity to stabilize the chaos in Central America, and offer a real alternative to Yankee exploitation.

      • Sam F
        February 14, 2019 at 19:48

        If strong anti-corruption enforcement is planned anyway, perhaps even financed by reduction of government pay, that might retain the modest while encouraging the greedy to go where they will do less damage.

        AMLO’s movement does suggest a countervailing influence against the US-backed rogue governments opposing Venezuela and Cuba.

    • cal
      February 14, 2019 at 17:54

      To worry about austerity in the abstract misses Mexico’s long-history of political corruption. For quite a long time, the Mexican govt was coextensive with party rule of the PRI, where a patronage system became embedded in the bureaucracy. PAN did little to change this, but rather represented a rival version, trying to take over PRI turf. By attacking govt pay, AMLO taking an axe to the root, so to speak, trying to make Mexican govt responsive and functional.

      And whether it will be a “brain-drain” or will invite bribes, well, the PRI was super well-paid and had a fully functional partnership with the cartels (esp. under jefe Gallardo). PAN’s War on Drugs was part political opportunism, part US satrapy, and part, I think, turf-war, where PAN backed certain cartels in their bid for greater turf in collapse of Gallardo system.

      What some are calling austerity is, I think, AMLO’s attempt to melt down the party-state as well as getting funds for his projects, two birds with one stone.

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