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Workers and Welfare

Workers and Welfare: Comparative Institutional Change in Twentieth-Century Mexico

Michelle L. Dion
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    Workers and Welfare
    Book Description:

    After the revolutionary period of 1910-1920, Mexico developed a number of social protection programs to support workers in public and private sectors and to establish safeguards for the poor and the aged. These included pensions, healthcare, and worker's compensation. The new welfare programs were the product of a complex interrelationship of corporate, labor, and political actors. In this unique dynamic, cross-class coalitions maintained both an authoritarian regime and social protection system for some seventy years, despite the ebb and flow of political and economic tides.By focusing on organized labor, and its powerful role in effecting institutional change,Workers and Welfarechronicles the development and evolution of Mexican social insurance institutions in the twentieth century. Beginning with the antecedents of social insurance and the adoption of pension programs for central government workers in 1925, Dion's analysis shows how the labor movement, up until the 1990s, was instrumental in expanding welfare programs, but has since become largely ineffective. Despite stepped-up efforts, labor has seen the retrenchment of many benefits. Meanwhile, Dion cites the debt crisis, neoliberal reform, and resulting changes in the labor market as all contributing to a rise in poverty. Today, Mexican welfare programs emphasize poverty alleviation, in a marked shift away from social insurance benefits for the working class.

    eISBN: 978-0-8229-7363-8
    Subjects: Political Science, History

Table of Contents

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    (pp. xiii-xviii)
  2. 1 INTRODUCTION: The Rise and Reform of Welfare
    (pp. 1-13)

    In the first half of the twentieth century, the most economically advanced Latin American countries established extensive welfare institutions for government and industrial workers. By mid-century, social insurance, including extensive pension, health, and workers’ compensation programs, protected formal sector workers, or those in the regulated labor market, in most Latin American countries. These welfare institutions are often central to the fabric of political life. The debt crisis of the 1980s ushered in a new economic orthodoxy, however. Most countries began making substantial efforts to reform their social insurance institutions, with varying degrees of success. Public pension reform, including privatization, was...

  3. 2 THE BUILDING BLOCKS OF WELFARE REGIMES: Class Coalitions and Institutions
    (pp. 14-52)

    The theoretical framework used here to explain the development of Mexico’s welfare regime draws on elements of class coalition and historical institutionalist approaches. As chapter 1 suggests, some alternative approaches offer explanations that are supported by evidence from Mexico. Nonetheless, the explanations offered by these alternative approaches fail to provide a better analysis of the political process that generated numerous Mexican welfare institutions and institutional change over time than does the theoretical framework proposed here.

    Research on social protection in advanced industrialized democracies has suggested that the welfare regimes in these countries cluster around one of three “ideal” types of...

  4. 3 THE EARLY STRUGGLE FOR WELFARE: From the Revolution through the World Wars
    (pp. 53-84)

    The antecedents of social insurance in Mexico took shape just before and just after the Mexican Revolution. A comparison of efforts in the 1920s to implement social insurance for both private and public sector workers illustrates the role of class alliances in policy adoption. Business community opposition blocked social insurance for private sector employees, while the government used its decree powers to provide pensions for its workers. Although the ruling coalition wanted to respond to both public and private sector worker demands for insurance, doing so for private sector workers would have threatened the balance of support from business leaders...

  5. 4 THE EXPANSION OF WELFARE: The Mid-Century Efforts of Organized Labor and Professionals
    (pp. 85-115)

    The provision of social insurance in Mexico continued to expand into the 1970s. During this period, shifts in the underlying class coalition of the ruling party contributed to the expansion of social insurance through institutional reform and layering. In addition, existing welfare institutions, including labor contracts and the IMSS, generated new sources of political support for welfare. The most notable changes in Mexico’s welfare regime from the 1950s through the 1970s include the creation of the Government Workers’ Social Security and Services Institute (ISSSTE) in 1960 and a significant expansion of geographic coverage and benefits in the IMSS, including noncontributory...

  6. 5 RETRENCHMENT AND REFORM: Late-Century Effects of Globalization and Democratization
    (pp. 116-151)

    Through its effects on the political capacity of domestic actors, economic and political liberalization during the 1980s and 1990s profoundly shaped debate and conflict regarding the future of Mexican social insurance. During the 1990s, some reforms fundamentally reoriented the foundations of social insurance, while other reforms were proposed but then blocked by powerful domestic political actors. Such patterns of uneven reform suggest several theoretical and empirical puzzles. For example, why did the government fail to privatize the IMSS pension system in 1992 but succeed in 1995, even though the ruling party had controlled more congressional seats in 1992? Why did...

    (pp. 152-167)

    Organized labor, with its incorporation into the ruling cross-class coalition, played a pivotal role in the development of Mexico’s welfare regime until the 1980s, and then its influence waned in the context of subsequent economic and political liberalization. Since some aspects of the analysis in earlier chapters diverge from the prevailing interpretations of the role of organized labor under the PRI regime, further quantitative evidence illustrates the robustness and internal validity of the argument developed in the qualitative historical account of welfare development in previous chapters.

    Several studies examine the effects of economic liberalization on social security and social assistance...

  8. 7 PARADIGM SHIFT: Welfare Reform after Democratization
    (pp. 168-191)

    The historic election of President Vicente Fox Quesada of the PAN and the ensuing democratic transition combined with previous patterns of pension privatization in Mexico and elsewhere in Latin America suggested that further social insurance retrenchment in Mexico would be unlikely. Furthermore, divided government and an opposition party with formal ties to organized labor and veto power in Congress in both the Fox and then the Calderón administrations would seem to doom further social insurance retrenchment. Although the PRI had led unpopular privatization efforts during the Zedillo administration, observers might have expected that as an opposition party, the PRI would...

  9. 8 TARGETED ASSISTANCE: Two Decades of Welfare Expansion
    (pp. 192-214)

    Successive governments in Mexico since 1988 have sought to reshape and retrench the welfare regime by privatizing and reforming the social insurance provided by the IMSS and ISSSTE (see chapters 5 and 7). These privatization efforts reflect the abandonment of a movement begun in the 1970s to universalize and expand access to social insurance benefits. Although in some instances organized interest groups, particularly labor unions in nontradable sectors, blocked formal retrenchment, the privatization of pensions and de facto increase in the subcontracting of services have fundamentally reshaped the existing welfare system. Each administration between 1988 and 2007 also expanded the...

  10. 9 MEXICO IN COMPARATIVE PERSPECTIVE: Welfare Development in Chile, Argentina, and Brazil
    (pp. 215-250)

    At the beginning of the twenty-first century, Mexico’s welfare regime is a patchwork of both social insurance policies for those in the formal labor market and social assistance for the poor, often in rural areas or outside the formal labor market. In this first decade of the century, social insurance provided by the IMSS or the ISSSTE covers about half of the population, or an estimated 105.8 million persons (Calderón 2007). Of the total population, about 50 million are estimated to be living in poverty and of those, 25 million are in extreme poverty (Secretaría de Desarrollo Social [SEDESOL] 2007).¹...