The Informal Economy and Social Programs in Mexico: A Critique

The Context

The urban informal economy in Latin America is vast. More than 50 percent of workers in Latin America were employed in the informal economy in 2005, with a high of 71 percent in Bolivia and between 40 and 44 percent in Brazil, Costa Rica, Mexico, Panama, and Uruguay (Tokman, 2007: 86). In 2009 informal employment other than the agricultural constituted the following percentages of the labor force in select Latin American countries: Brazil, 42.2 % Argentina, 49.7 % Mexico, 50.3 % Ecuador, 60.9 % El Salvador, 66.4 % and Honduras, 73.9 percent (ILO, 2012a: Table 1). According to an ILO report (2012a: 3), based on an analysis of 47 countries, “informal employment is paired with low income per capita and high poverty rates.”

By 2012, while waged and salaried employment had increased slightly over “own-account employment” in Brazil, Colombia, Panama, Peru, and Venezuela, informal employment was increasing faster than formal employment in Ecuador and Mexico (Cervantes and Acharya, 2013; ILO, 2012b). The informal economy continued to constitute about 50 percent of employment in Latin America. It was estimated to represent 60 percent of total employment in Mexico in 2013 and 2014 (CNN Expansión, 2013; INEGI, 2014); more radical analyses hold that in the second trimester of 2012 it constituted 67 percent of the employment of the economically active population (Cervantes and Acharya, 2013: 185 and Table 1). Cervantes and Acharya (2013: Table 1), including in their analysis informal agricultural employment, also hold that the percentage of the economically active population in informal employment has ranged between almost 67 percent and more than 68 percent in every year since 2005.

At the same time, poverty statistics in Mexico continue to be alarming. The number living in poverty increased during the recession, from 48.8 million in 2008 to 52.0 million in 2010. By 2010 half of the Mexican population was living in poverty and 10 percent in extreme poverty, which included malnutrition (CONEVAL, 2010: 16) By 2012 the percentage of people living in poverty had fallen from 46.1 percent in 2010 to 45.5 percent, but the numbers had increased to from 52.8 to 53.3 million (CONEVAL, 2013). In 2014 55.3 million people (46.2 percent of the population) were poverty-stricken, suggesting that inequality is increasing (CONEVAL, 2015). Although poverty and employment in the informal economy are not isomorphic, a large overlap of these two categories of people can be assumed.

Many of the World Bank–sponsored “humanitarian” conditional cash transfer programs and support for health care for the impoverished and near-poor were created in the wake of social protest against neoliberal policies such as privatizations, reductions in government subsidies, wage freezes and increased taxes, layoffs of public sector employees, and free-trade agreements that led to the dispossession of the peasantry and many small businesses (Almeida, 2007; Johnston and Almeida, 2006; Petras and Veltmeyer, 2011). Almeida (2007: 128) examines the 281 documented social protests against neoliberalism that occurred throughout Latin America in the period between November 1995 and April 2001. (Many other protests during that period did not receive media attention; protests continued afterward as well.) Working-class groups carried out 56 percent of these protests, public employees (subject to or threatened by layoffs due to privatizations) more than 23 percent, and peasants more than 15 percent (Almeida, 2007: Table 2). Petras and Veltmeyer (2011: 71) point out that reaction to neoliberal policies in Mexico “generated one of the largest mass movements in the country’s long history of land struggle—an organization of indebted ‘independent’ (non-peasant) farmers (El Barzón).” They also argue that reaction to neoliberalism led to a resurgence of the Latin American left based primarily though not exclusively in the countryside (Petras and Veltmeyer, 2011: 81–84).

In a publication focused on the importance for economies of generating jobs (with little attention to wage levels), the World Bank (2012) did not specifically mention the muting of social protest but concentrated on the need for jobs in “conflict-affected countries.” The report noted that “conflict environments range from situations with high levels of criminal violence to civil wars and other forms of internal conflict. Less frequently, they involve hostilities between states” (World Bank, 2012: 194). Reading between the lines, it can be assumed that social protest movements—not mentioned in the publication—could erupt into more serious internal conflict.

The programs for providing educational opportunities and health care to disadvantaged populations have parallels with agrarian reform programs promoted in the 1960s and 1970s. As Días Martins (2006: 266) points out,“Agrarian reform is not necessarily radical. During the period of the Kennedy administration and the Alliance for Progress, many Latin American governments were put under pressure by the United States to carry out agrarian reform programs as part of a plan of ‘pacification’ designed to undercut potential popular support for armed rebellion.”Furthermore, as far back as the 1960s the World Bank was providing loans—reinforced by agencies such as USAID and the Alliance for Progress (Burgess, 1988)—for the upgrading of housing in slums (or squatter settlements) (see, e.g., Pugh, 2000; Zanetta, 2001). Fischer (2014: 29–31), among others, argues that U.S. interest in slum upgrading and housing provision during the cold war period was premised on the idea that slum residents might be recruited by communists. Slums and squatter settlements were often considered hotbeds of communist agitation.

Critiques of the Programs

Progresa/Oportunidades is a targeted conditional cash transfer program initiated in Mexico in 1997 during the Zedillo administration (1994–2000). It has been continued by the Peña Nieto administration under the name of Prospera but will be referred to here as Progresa/Oportunidades. It provides cash transfers to mothers to ensure their children’s attendance at school and improve children’s health and nutritional status in the hope of augmenting their human capital (Handa and Davis, 2006: 513; Levy, 2006; Stecklov et al., 2005: 770). Among its other aims Progresa/Oportunidades is designed to “improve the health and nutritional status of poor households, particularly of their more vulnerable members: children under the age of five and pregnant and nursing women” and to “contribute to children’s and young people’s completion of their primary, secondary, and high school education” (Levy, 2006: 21). ¹ It is specifically aimed at creating a skilled and healthy labor force in the interest of combating the intergenerational transmission of poverty.

The conditionalities, or obligations, that mothers must meet under this essentially workfare program are varied, often time-consuming, and exploitative of already existing human capital. In Molyneux’s (2007: 70) words:

Receipt of the stipend is . . . conditional on fulfilling the duties laid out by the programme managers: this involves taking children for regular health checks; meeting targets for ensuring their children’s attendance at school; attending workshops on health and programme coordinators meetings; and contributing a set amount of hours of work to the community, typically for cleaning buildings or clearing rubbish.

Escobar Latapí and González de la Rocha (2008: 444) point out that failure to meet the conditionalities or co-responsibilities is likely to lead to exclusion from the program of mothers in poor households who are engaged in “basic money-earning activities” that leave them no time to comply, especially mothers of small children in woman-headed households. Furthermore, the services available in clinics and schools are often inadequate and sometimes nonexistent in isolated rural communities, which leads to these communities’ exclusion from the program by default (Escobar Latapí and González de la Rocha, 2008: 444, 451). In a way, these transfer programs can be seen as an appropriation of women’s labor in the interest of future accumulation by those who will employ the more skilled and healthier labor force that their children will constitute.

There are researchers who see in these programs merely an expansion and deepening of neoliberal policies (e.g., Boltvinik, 2012; Yanes, 2011). Yanes (2011: 50, 51) points out that such targeted conditional cash transfers are workfare, not welfare, and represent an abandonment of a discourse on basic human rights. With regard to the characterization of such programs, according to Boltvinik (2012: 17), ² “the leading phrase might be: ‘we pay and you obey.’” He stresses the role of the World Bank in promoting Progresa/Oportunidades in Mexico and spreading similar programs elsewhere while avoiding an endorsement of an alternative “universalistic welfare state.” He feels that Progresa/Oportunidades is meant to enable the market to function at a higher level. Cammack (2002; 2003; 2009) pushes the argument about neoliberalism and the market even farther.

Since the program’s initiation, the World Bank and the Inter-American Development Bank have promoted similar conditional cash transfer programs in 18 other Latin American and Caribbean countries, most during the 2000s (Cecchini and Madariaga, 2011; Yanes, 2011: 51). There is a dispute in the literature about whether Progresa/Oportunidades was inspired by the World Bank or created endogenously (e.g., Boltvinik, 2012; Handa and Davis, 2006: 513–514; Yanes, 2011: 51). James D. Wolfensohn (2006: vii–viii), president of the World Bank from 1995 to 2005, in his foreword to Santiago Levy’s book evaluating the Progresa/Oportunidades program, suggests that the program was developed independently in Mexico. Levy himself, from 2000 to 2005 director of the Instituto Mexicano de Seguro Social (Mexican Social Security System—IMSS) and the designer of the program, has ties to the World Bank. Holding a Ph.D. in economics from Boston University, he has been vice-president for sectors and knowledge with the Inter-American Development Bank since 2008 (Levy, 2010). There were similar initiatives by international nongovernmental organizations (NGOs) previously, however. For example, Plan International (formerly the Foster Parents’ Plan) worked for decades through targeted conditional cash transfers to families, especially mothers, aimed at enhancing the human capital of their children through education. Bimonthly attendance at community meetings was mandatory (Moser, 2009)

Progresa initially targeted poor families in rural areas and coincided with the termination of the general food subsidy (Handa and Davis, 2006: 215). In 2002, under President Vicente Fox (2000–2006), the program was expanded to include the poor in urban centers and renamed Oportunidades. It was also extended to cover students in high school. This expansion was funded by an Inter-American Development Bank loan—the largest in its history up until that time—approved in 2001 (Handa and Davis, 2006: 514; Levy, 2006: 114). The number of families covered has continually expanded. In 1999 2.3 million households, in 2003 4 million households, and by 2011 5.8 million households were beneficiaries (de Janvry and Sadoulet, 2004: 2; Stecklov et al., 2005: 771; Yanes, 2011: 51). Many of the beneficiaries of Oportunidades worked in the informal economy, but in contrast to Seguro Popular the program did not specifically single out these workers. One of Levy’s (2008: 23) comments on the program, in contradistinction to nonconditional service transfers such as Seguro Popular, is that it has no effect on the labor market choices of the recipient population.

The author of Seguro Popular was Julio Frenk, minister of health from 2000 to 2006 and since 2009 dean of the Harvard School of Public Health (HSPH Office of the Dean, n.d.). Seguro Popular, based on the proposition that health care is a human right, went into effect in January of 2004, and by early 2005 all 32 Mexican states had endorsed it (Frenk et al., 2006). Its aim was to attend to the health care needs of the approximately 50 million Mexicans who had no health care coverage through formal work benefits or as employees of the state (through the Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado [Institute for Social Security and Services for State Workers—ISSSTE). ³ Those who worked in the informal economy were identified as particularly at risk (Frenk, 2006: 955; Frenk, Gómez-Dantes, and Knaul, 2009: 543). Frenk (2006: 957) points out that one of the reasons for establishing Seguro Popular was that “a substantial proportion of the cash transfer received by poor families from Oportunidades was being used to finance care that was not included in the initial package of interventions.” Although Seguro Popular was to be financed by national and state governments and with co-payments from users, the program exempted from co-payments those in the lowest two income deciles and later the four poorest income deciles “as well as families in deciles IV–VIII that include a pregnant woman or a young child” (Knaul et al., 2012: 6). Frenk and his colleagues note that, while the 1983 amendments to the Mexican Constitution ratified the right of health care for all, until the establishment of Seguro Popular there was no way of accessing that right.

In a World Bank publication, Perry and his colleagues (2007) suggest that employment in the informal economy has a dual dynamic. Some workers leave the formal economy for various reasons, among them a desire for greater autonomy and the ability to set their own hours. These tend to be the informally self-employed. Other workers, because of age or low educational levels, are excluded from the formal economy. These tend to be the informal or informalized wage workers. Levy (2008), a harsh critic of the Seguro Popular program, seems to believe that the expansion of the informal economy in Mexico is grounded in people’s desire to avoid work in the formal economy. He maintains that if one family member is employed in the formal economy, then other family members see no need to duplicate the benefits extended to all family members (such as medical care) and will actually prefer informal employment in order for the family not to be dually or multiply taxed (on this point see also Maloney, 2004; Maloney and Arias, 2007). He contends that the expansion of the informal economy in Mexico rests on the ability of individuals to obtain health care through Seguro Popular, thus permitting their exit from formal employment where they and their families would co-pay for the package of social security benefits. He also contends that wages are higher in the informal economy because businesses do not have to co-pay for the benefit package. There is, however, evidence that contradicts the idea that wages are higher in the informal economy generally or in Mexico in particular (e.g., Cervantes and Acharya, 2013; Flores Lima, Zamora, and Contreras, 2013; World Bank, 2012). Flores Lima, Zamora, and Contreras (2013: 17), for example, find that in Mexico workers in the formal economy earn almost twice as much as workers in the informal economy.

Most liberal critiques of Seguro Popular focus on the populations that are being de facto excluded: isolated rural communities whose members must travel long distances to a clinic and, among them, especially indigenous peoples (Gutiérrez and Hernández-Ávila, 2013; Laurell, 2007; Leyva-Flores et al., 2013). Another problem relating to exclusion of people from Seguro Popular is that concerning the prescription of state funding for part of the program. It is pointed out that states in southern Mexico such as Chiapas, Oaxaca, and Guerrero do not have the same funding capabilities as richer states to the north (e.g., Uribe Gómez and Abrantes Pêgo, 2013: 153). Furthermore, in the poorer states greater proportions of families are found in the lower income deciles, where they are exempt from co-payments and therefore constitute a greater burden on the state (Laurell, 2007: 522). Additionally, some states are more rural than others.

Another problem is that funding depends on the goodwill of taxpayers and the Mexican Congress. Although an ever-greater proportion of the population is seeking medical care through Seguro Popular in at least some states (El Economista, February 2, 2015), the budgetary resources assigned to that program and the health components of Progresa/Oportunidades/Prospera increased only slightly between 2013 and 2014 (González G., 2014). In 2015, federal moneys applied to the health sector increased only 0.1 percent, to approximately 135 million pesos (US$90 million at the average 2015 exchange rate) or 11.4 percent of the federal budget (CEFP, 2015). Although this is up from 5.1 percent in 2000 and 6.3 percent in 2010 (Knaul et al., 2012: 8), it is still not sufficient to cover the health needs of the population (Juan Lopéz, Martínez Valle, and Aguilera, 2015). Thus exclusion could be a growing problem and might lead to protests by those who have not been included. The allocation of such relatively minor amounts of money to these programs may also lead to a general decline in the quality of medical services. For example, in Cabo San Lucas, Baja California Sur, the services provided by and the hospital infrastructure of the IMSS are far better than those for the recipients of Seguro Popular, whose general hospital has so few specialized doctors and so little medical equipment that they are often forced to take a three-hour bus ride to La Paz to be seen by a specialist and may also often have to go there to undergo an operation. Furthermore, it is common knowledge in the town that while the IMSS supplies medications, those participating in Seguro Popular usually find a way to acquire them outside of the system, since they are simply not available at no cost. Thus, many people are excluded from having their needs met.

Levy (2008), however, criticizes the Seguro Popular program because of whom it includes, holding that the informal economy is expanding because of the unconditional transfers involved. A 2007 World Bank publication presents the same arguments as those briefly summarized in Levy’s 2006 and 2008 books. One of these is that people may be pushed from the formal economy to the informal (Mason, 2007: 194):

In Mexico, the benefit package offered by the Mexican Social Security Institute (IMSS) has eight mandatory components: health insurance, retirement pensions, disability insurance, professional insurance, life insurance, day care centers for workers, sports and cultural facilities, and housing credits. . . . While some workers may value all elements of this package, others may value only some of them. For example, while single mothers may value child care benefits very highly . . . other workers—such as those without children—may not value them at all. In cases where workers do not value one or more components of the benefit package, those components may be considered by the worker as a “tax” on their earnings.

Researchers, including some associated with the World Bank, have challenged the Levy-Mason hypothesis that Seguro Popular will make the informal economy expand because individuals will be motivated to take advantage of essentially free medical care and avoid the co-payments for benefits (some of which they do not value) of the formal economy. One World Bank publication shows that Seguro Popular led to only a “moderate increase in informality” and this occurred because of less entry into the formal economy rather than an outflow from that sector (Aterido, Hallward-Driemeier, and Pagés, 2011: 29). Marinescu and Azuara (n.d.: 34) find that informality has increased only for those with fewer than nine years of schooling and those over the age of 34 and that the effect of Seguro Popular on increasing informality among these groups is less than 2 percent. They conclude that “there are very few workers who decide upon the sector they will work in on the basis of the availability of health benefits” (Marinescu and Azuara, n.d.: 34–35). Elsewhere Azuara and Marinescu (2011: 27) find that the impact of either Progresa/Oportunidades or Seguro Popular on informality “is close to zero and insignificant.” While noting that since 2003 there have been effects on informality linked to Seguro Popular, Duval Hernández and Smith Ramírez (2011: 26) also claim that “the effect is very small in comparison with other factors affecting the decision.” They hold that “it is possible that other factors such as salary, flexibility in schedules, independence, etc. matter more [than the health benefits of Seguro Popular] when choosing whether to apply or not to the formal sector” (Duval Hernández and Smith Ramírez, 2011: 29). This analysis seems to be addressing the situation of the self-employed, who often wish to avoid “factory discipline,” rather than the situation of informal waged workers (Wilson, 2012).

It can be argued that instead of a “bottom-up” exit approach, a “top-down” exclusion approach can best help analysts understand the increase in the numbers of people employed in the informal economy. The informal economy often expands not because of individual choice but because (1) recessions and other economic shocks drive formal enterprises out of business and force more family members into the labor force as formal firms downsize and the only options are informal income-generating activities and (2) formal firms object to co-paying for social security benefits and thus often informalize a portion of their labor force or subcontract out to informal micro-enterprises. ⁴

More left-wing approaches criticize both Oportunidades and Seguro Popular, the latter because it is seen as a neoliberal ploy to privatize medical care. Other critiques, however, also view the spread of neoliberalism unfavorably. It has been held that protest movements in various Latin American countries, including Mexico’s 1994 Zapatista uprising and the El Campo No Aguanta Más demonstrations against the North American Free Trade Agreement in Ciudad Juárez in 2003, were aimed at neoliberal policies (de la Barra and Dello Buono, 2009: 58, 71; Nash, 2001; Olesen, 2006; Petras and Veltmeyer, 2011). Other analysts have ignored these kinds of protests. Rather than seeing the World Bank and its affiliates’ support of programs such as Progresa/ Oportunidades and Seguro Popular as an attempt to mute social protest and avoid degeneration into “conflict-affected countries,” the post-neoliberal liberals seem to feel that the international financial institutions have been infused with a new humanitarianism. For example, Grugel, Riggirozzi, and Thirkell-White (2008: 516) declare that “the post–Washington consensus agenda, with its greater emphasis on popular inclusion and political reform, in fact represents a tacit acknowledgment within Washington that neo-liberal economic policies are extremely difficult to sustain and legitimate at the domestic level.” They hold that there was a retreat from neoliberalism in Latin America beginning in the early 1990s and that this was shown by the extension of social safety nets in reaction to the social costs, such as deepening poverty, of those policies.

Those on the left, in contrast, see social safety nets such as Progresa/Oportunidades and Seguro Popular in Mexico, as well as the World Bank’s poverty reduction strategy papers in countries such as Bolivia, Honduras, and Nicaragua, as a means to relegitimize neoliberal policies or even to widen and deepen them. Rückert (2007: 93) uses a neo-Gramscian perspective to analyze these programs, many of which are conditional cash transfer programs modeled on Mexico’s Progresa/Oportunidades. He argues that this approach “could be understood as an attempt by the IFIs [international financial institutions] to rebuild the hegemony around their highly contested neoliberal policy prescriptions, which have faced increasing opposition in many developing countries and have lost their hegemonic status.” Thus he sees a break with former neoliberal policies and a post–Washington consensus effort to deepen neoliberalism but argues that the international financial institutions’ interest in the poor is motivated by the desire to regain hegemony in the world capitalist system. He also holds that this attempt to regain hegemony is in part a reaction to the social struggles against neoliberal policies in various countries.

Rückert (2009: 58) suggests that “rather than empowering the poor and addressing their plight, PRSPs [poverty reduction strategy papers] have actually intensified neoliberalization processes in the developing world, while adding novel disciplinary elements to the World Bank’s arsenal of ‘policy weapons.’” Criticizing a poverty reduction program in Honduras that resembles Mexico’s Progresa/Oportunidades in its aims and its conditionalities, he holds that such conditionalities are meant to discipline the behavior of the poor and make them act in ways useful to neoliberalism. He proposes that “with the emergence of the PRSP development approach, the World Bank’s policy interventions have become ever more intrusive and comprehensive” (74). ⁵ Thus the post–Washington consensus stance is not an abandonment of neoliberalism but a deepening and widening of it in new forms justified by helping the poor. It can be said that even such laudable programs as Seguro Popular have some disciplinary aspects. For example, once or twice a year its beneficiaries must go for medical check-ups, whether needed or not, in order to remain in the program.

Cammack (2002; 2003; 2009) develops a Marxist approach to understanding the poverty reduction strategies endorsed by the World Bank. Noting that the spread of capitalism is dependent on the proletarianization of workers and that with globalization this is important on a world scale, he holds that the interest in poverty reduction is to create “an efficient global labour market in which the existing proletariat will ‘float’ easily in and out of work, and the ‘latent’ proletariat, whether small peasant producers or young women as yet insufficiently accessible to capital’s reach, will be ‘freed’ and fully proletarianized” (Cammack, 2002: 197; see also Cammack, 2003: 5). ⁶ Safety nets are to be provided for the stagnant proletariat numbering over a billion people living on less than a dollar a day (2002: 207) and representing a reserve army of labor that can be tapped under capitalist expansion (2003: 5).

Although Cammack does not explore this aspect, it can be argued that many members of the floating proletariat are employed intermittently in the informal economy, much of the latent proletariat comes to enter this economy, and much of the stagnant proletariat spends most of its working years in this economy. Those occupying the informal economy, in other words, include all categories of the reserve army of labor: floating, latent, and stagnant. The informally employed often float in and out of the formal economy, depending on informal salaried work or self-employment when the formal economy contracts over the economic cycle. Those who play a role in reproducing the reserve army of labor—the portion of the reserve whose skills and health are to be enhanced and can be mustered when the economy expands—form part of the “latent” proletariat. ⁷ And the informal economy acts as a reserve for those with low skills and little education who are only irregularly employed, in other words, the “stagnant” proletariat (see Marx, 1979 [1867]: 640–644 for the categories of the reserve army of labor).

The poverty reduction program endorsed by the World Bank, according to Cammack (2003: 5), “far from being a shift away from the neoliberal revolution, is a means to completing it.” He further argues that poverty reduction strategies are designed in such a way as to ensure the hegemony of capital over labor on a global scale (Cammack, 2009: 37). The aim is to provide a more highly skilled and healthier labor force, enabling and promoting global capital accumulation. This accumulation rests on the fact that nations will compete for investment by offering a skilled labor force at the lowest possible cost to industry. In summary (50),

Human capital is to be developed to the maximum extent (a goal to which gender inequality is an impediment); public expenditure is targeted, and monitored with the intention of denying it to those capable of surviving in the market, and equipping those who are not with the capacity to enter or re-enter it; health and education expenditure and labour market regulation aim to provide for (though a basic universal minimum) and to set limits to (through the abolition of child labor) the delivery of a global labour force, subject to common welfare and regulatory standards. And finally, social protection programmes are aimed to underpin the labour market and ensure its sustainability over the long term.

Conclusions

There is a kind of “humanitarianism” under contemporary capitalist-patriarchy that reproduces and reinforces the current economic and social system. This can be seen in an analysis of the programs endorsed and promoted by the international financial institutions. Two aims of the World Bank are to mute social protest and to create a skilled and healthy proletariat competitive on a world scale. Social protection programs such as Seguro Popular contribute to both aims. It is notable that recently Mexican President Enrique Peña Nieto has proposed a universal health care system that would permit the excluded to use any of the existing health care facilities. This coverage can be seen both as a new attempt at “humanitarian” capitalism and as a means of enhancing the health status of the proletariat to produce an internationally competitive workforce (as well as an attempt to garner greater support for the ruling Partido Revolucionario Institucional).

Conditional cash transfer programs such as Progresa/Oportunidades partially meet the second aim. The World Bank is explicit that the conditional cash transfer programs are meant to augment human capital (e.g., World Bank, 2009). ⁸ Progresa/Oportunidades and many other cash transfer programs in Latin America are essentially workfare programs in which mothers meet conditionalities based on their gendered labor input in exchange for benefits. They are not entitlements, and they are subject to political opposition by those who resent being taxed to fund them (Sanches Corrêa, 2015). Seguro Popular, while inspired by moral insights, is very uneven from state to state and much criticized because of lack of coverage for many medical conditions. It also excludes many sectors of the impoverished. Both programs have exclusionary aspects that may foment future protest among the vulnerable poor. They do not ameliorate inequality, and far-left analyses suggest that they are not so much concerned with poverty alleviation as with muting protest and, secondarily, with providing a skilled and healthy labor force in waiting for the potential and capitalistically predicted expansion of formal capitalist enterprises.

The impact of the expansion of the informal economy is subject to dispute. Some neoliberals claim that the existence of an unconditional cash transfer program such as Seguro Popular promotes the existence of a large cadre of workers who no longer feel that they have to queue for formal jobs in order to get medical coverage for themselves and their families. Others, more to the left, point out that work in the informal economy is often the product of exclusionary or, alternatively, macroeconomic flexibilization and thus would challenge the idea that the expansion of the informal economy rests on the expansion of Seguro Popular. A more detailed analysis of the two sectors of the informal economy defined as those who enter it voluntarily and those who are involuntarily excluded from the formal economy must be undertaken. In any case, those in the informal economy can be viewed as a reserve army of labor, many of them waiting for formal jobs that may never materialize. Given the dynamics of capitalism, the funding policies of the international financial institutions are patchwork and palliative and, in the case of Progresa/Oportunidades, rest on traditional patriarchal norms. The policies essentially put Band-Aids on the wounds caused by the working of the system of capitalist patriarchy but cannot cure the inequalities perpetuated by the system itself. Thus, future protests, especially among those excluded from the Band-Aid package or confronting its deficiencies, may be expected. Meanwhile, more and more of the Mexican people are falling into poverty.