The Informal Economy and Social Programs in Mexico: A Critique

• In Event: Neoliberalism, Employment, and the Informal Economy

Abstract

What does a government do, if in the wake of neo-liberal structural adjustment programs, the absolute number of poor people within its borders increases, and the informal economy, in which many of them work, expands faster than the formal economy? What does the World Bank—and other international financial institutions—do, if in the wake of neo-liberal structural adjustment programs there are processes destabilizing to capitalist hegemony, whether in the form of the 1994 Zapatista uprising and the 2006-2008 “tortilla riots” in Mexico which protest its results, or in the form of governments, such as those signatory to ALBA (Alianza Bolivariana para América, Bolivarian Alliance for the Americas), established in 2004, which seek total withdrawal from its disciplines and polices?
Surprisingly, at least in the case of Mexico, the actions of the Mexican government and the World Bank converged on 1) supporting conditional cash transfers to poor families to ensure the health status and educational achievement of their children, and 2) providing health care for those employed in the informal economy. The Mexican government and the World Bank converge, in other words, on a strategy that will provide skills and enhanced health status to the floating, latent, and stagnant proletariat and also provide to the reserve army of labor, in its totality, a modicum of survival, while in the meantime muting social protest.
Both the Mexican government and the World Bank support policies that will aid, and maintain, a “floating proletariat,” who are periodically employed in the formal economy and periodically unemployed or employed in the informal economy; the “latent proletariat”, or those peasants or their offspring who have not yet been fully proletarianized (or who periodically work as self-employed vendors, gardeners, car washers, domestic servants, maintenance men, etc. among those who are informally or semi-informally self-employ); and the “stagnant” portion of the reserve army of labor who are very irregularly employed as well as the unemployed due to disability or age.

Author

• Tamar Diana Wilson de García, University of Missouri/St. Louis