Introduction
The initial enthusiasm surrounding President Andrés Manuel López Obrador’s Fourth Transformation (4T) has waned, and his successor, Claudia Sheinbaum, faces significant financial constraints. These limitations hinder her ability to increase economic support for citizens and raise the minimum wage without negatively impacting businesses.
López Obrador’s Legacy
During his six-year term, López Obrador made several controversial decisions, including canceling the Texcoco airport project, suspending the Seguro Popular and daycare programs, and overspending on refineries and the Mayan Train. Despite these setbacks, he achieved substantial economic transformation by increasing the minimum wage and advocating for laborers’ rights.
For over 40 years, since Miguel de la Madrid’s presidency, the minimum wage lost its purchasing power, becoming insufficient to support a family. The misguided belief that cheap labor would stimulate economic growth instead led to widespread poverty. Mexico ranks among the countries with the lowest wage share for workers and one of the highest for capital, exacerbating income inequality.
López Obrador’s Achievements and Failures
López Obrador successfully reduced poverty, lifting 12 million Mexicans out of extreme poverty according to the World Bank. He increased the minimum wage and social programs, but his government’s deficit ballooned, depleting reserve funds and increasing the national debt by over 7 trillion pesos.
Sheinbaum now lacks the financial resources from fideicomisos, faces narrower margins for raising the minimum wage, and cannot further burden the country with debt without risking a financial crisis.
Challenges for Claudia Sheinbaum
To alleviate poverty, Sheinbaum must foster economic growth and employment opportunities. This requires distancing herself from López Obrador’s strained relationships with the business sector.
In Mexico, most people born into poverty remain impoverished throughout their lives. Only three out of ten disadvantaged youth escape extreme poverty, leaving the remaining seven to face a lifetime of financial struggle. While social support programs offer temporary relief, sustainable opportunities depend on private sector growth.
Conclusion
Key Questions and Answers
- What is the current state of López Obrador’s Fourth Transformation? The initial momentum has faded, and Claudia Sheinbaum faces financial limitations in continuing the 4T’s progress.
- How has López Obrador’s term impacted the economy and laborers? He increased the minimum wage and supported workers’ rights, but overspent on certain projects and failed to curb corruption.
- What challenges does Claudia Sheinbaum face? Sheinbaum must promote economic growth and employment to reduce poverty, which requires mending relationships with the business sector.
- Why is private sector growth crucial for poverty alleviation? Social support programs offer temporary relief, but sustainable opportunities depend on private sector expansion.
