Tuesday, January 17, 2012

Wages and Elections

All 213 of Mexico's minimum wages went up 4.2% on January 1, 2012.  

Yes, Mexico has 71 different minimum wages in each of three geographic areas into which the country is divided!  The lowest general minimum wage is $59.08 pesos per day and the highest -- for daily newspaper reporters -- $186.73.  Wage-setting government officials seem to know who should be kept happy.  

Without getting into the issue of whether even that highest minimum wage is a living wage, it is an amount that affects our lives in Mexico regardless of where we are in the social scale.  

As a result of the high inflation of the 1980's, most government fees and fines are set as multiples of the federally mandated minimum wage.  When you see the unpronounceable acronym SMGDVDF it is referring to the applicable daily minimum wage in the Federal District:  $62.33 pesos.  You'll find it in the strangest of places.  Look in the glove compartment of your car to find it on your insurance policy -- it covers the equivalent of a certain number of days of minimum wage.  Traffic fines are set the same way, as are many other government fees.  

Even the amount of money spent in Mexico's federal elections is determined by that diminutive wage.

This year the United States and Mexico will be holding full federal elections; they coincide only every twelve years.  Recent changes in electoral law in both countries make it particularly interesting to compare and contrast these 2012 elections as both countries deal with the legacy of severely challenged recent elections and ever expanding, and penetrating, electoral advertising.  

In the United States electoral advertising is almost entirely paid for by private contributions.  In Mexico equitable and free access to radio and television advertising is controlled by the Federal Electoral Institute (IFE), effectively eliminating one of the biggest expenses in traditional elections.  Furthermore, private funding cannot be used to obtain greater access.  The IFE essentially requisitions each radio and television station to provide forty-eight minutes a day for political advertisements.  Additionally, a new electoral reform prohibits slander, denigration of the candidates, parties, or government institutions in all campaign advertising. 

Though federal elections in Mexico are barely six months away -- July 1, 2012 -- no campaigning is permitted until April 1st. What we are experiencing right now is the selection of candidates within each party.  Limiting the length of campaigns may be one of the most important cost-controlling features of Mexico’s electoral laws -- 87 days for presidential elections, 57 days for midterm elections (campaigning is not permitted the three days before an election). 
In the United States re-election to federal office is allowed (something Mexican law prohibits).  Elected officials in the U.S. estimate they spend at least half their working hours raising money to “amass a war chest” for re-election.  The combined result of lengthy campaigns and no campaign finance limit has led to consolidation of power by the wealthy.  They alone can afford to buy essential media time.

This inequity has been compounded by the 2010 U.S. Supreme Court decision in Citizens United vs. Federal Election Commission.  Corporations were deemed to have the free speech rights of citizens, leading to a previously unseen huge infusion of cash into political action committees able to freely attack opponents without the appearance of the candidate paying for negative ads. 

In Mexico, the IFE oversees federal elections providing a uniform electoral process for the nation.  It finances recognized political parties' campaigns and distributes radio and television time. 

To perform these functions the IFE has a seemingly large purse. The annual amount given to the parties is determined by multiplying the number of registered voters -- of which there are over eighty million -- by 65% of the minimum daily wage in D.F.  In a federal election year that amount increases by 50%.  Thirty percent of this budget is distributed equally among all parties regardless of size; 70% is determined by the votes each received in the previous federal election.  Radio and television advertising time is distributed the same way.  Under this arrangement even the tiniest of parties receives enough money to be an active participant in the campaign.  Parties must receive 2% of the vote share to remain an official party and continue to receive funding.

A recent amendment to the Mexican Constitution states public funding prevails over private funding sources of electoral campaigns.  Although parties and candidates can, and do, solicit campaign contributions, their total income per year cannot exceed double the amount given to them by the IFE, placing a strict maximum on campaign expenses. 
If all political parties receive the full amount of campaign contributions permitted by law, their combined "war chests" are equivalent to less than two days worth of SMGDVDF, per registered voter!  The IFE's budget provides $60.77 pesos; campaign contributions could add $60.76, for a total of all political parties' expenses for the year of $121.53 pesos per registered voter.  It seems like a bargain to me -- less than the cost of a driver's license. 
Though there is frequent talk of U.S. campaign finance reform it is ultimately rejected as unfeasible.  Might the United States look to its southern neighbor for a model of true campaign finance reform?

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