Income security of older people in Mexico

The number and proportion of older people is increasing globally, which makes it even more important to ensure that the rights of older people are both protected and respected, and inclusion is the norm. However, the countries facing the biggest growth in the number older adults do not appear to be equipped with appropriate agencies and subsequent policies to respond to the demographic change. For example, people aged 60 years and over make up 10% of Mexico’s population, and that proportion should reach 15% in 2025.

The rapid ageing of population is especially challenging for the country, which is facing a very high poverty rate – almost one-half of the population (46%) lives in poverty. While the proportion of people facing poverty is lower in those 60 years and over (44%) compared with the total population, older people are often more vulnerable. Guaranteeing basic income security for older persons is essential to enabling them to continue to contribute to society.

Poverty in older age exists for a multitude of reasons but one of the main contributors to this situation in Mexico is the lack of formal income. More than 50% of the workers are in the informal sector, which does not necessarily provide a retirement pension1. The consequence is that three in every four older adults do not have a retirement or pension plan.

In Mexico, there are two types of pensions: contributory and non-contributory2. The contributory pensions are handled by the States and the municipalities, and are distributed to people who have worked in the formal sector and paid into a pension plan. Non-contributory pensions, on the other hand, were created by the federal government in 2013 in order to cover a wider percentage of the population. The average monthly income with a non-contributory pension is 585 pesos ($30), as opposed to 6,169 pesos ($323) with a contributory pension3. So in most cases, the income from a pension is not sufficient to live securely.

Because of the insufficient amount of formal income, a large proportion of older people have to gain income from another source. For example more than one-third of older people are working well into their later years. As it is more difficult for older people to find a “declared job” in large this sub population becomes the informal workforce, and not well compensated4. Reports show that 32% of older people in Mexico are paid less than the minimum wage. Others often depend on their families, usually their spouse or children. Over one-half (53%) of older people received money transfers from their children during the last two years, a source of income which is often not reliable 5.
Women are especially affected by poverty in older age, because many have not formally worked enough, or at all, to receive any kind of pension. For instance, women comprise 58% of those who do not receive a pension. Moreover, 59% of older women are dependent on their families for income for a longer period of time as they likely live longer than their husbands5.

As long as poverty is not addressed, perhaps even seen as “the norm”, inequalities within the age group of adults aged 60 years or more will continue to exist. Income security is essential for older persons to live a dignified life and contribute to family and society in general. That is why the International Federation on Ageing (IFA) advocates for Income security, which will be addressed as a way to combat ageism at the IFA 14th Global Conference on Ageing, taking place 8 – 10 August 2018 in Toronto, Canada.

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5 E. Aguila, C. Díaz, M. Manqing Fu, A. Pierson; Envejecer en México: Condiciones de Vida y Salud, 2011