Right to social security under threat

A social security regime benefiting salaried employees and their families does not cover the informal sector or the unemployed and half of all children are unprotected. The pension system has been subject to regressive reforms, which have been opposed by workers through political mobilization and legal action.

Poverty,inequity and inequality in access to services

In the 2007-2012 National Development Plan (PND), the federal governmentacknowledges the reduced economic growth that has been reflected in aninsufficient generation of formal employment positions and almost no increase inreal salaries, thus preventing sustained increases in family income andexacerbating the persistence and intensity of poverty. Inequity in incomedistribution has also not improved in recent years and unequal opportunitypersists, in particular manifesting regionally between different states andmunicipalities.[1] The PND acknowledges thatpublic health service coverage is still not universal, that it is very difficultfor most people to pay for private services and that great inequalities persistin the quality of services, these being associated with insufficientinfrastructure and supplies, as well as problems related to the number anddistribution of qualified personnel.[2]

Limited social security coverage andincreasingly precarious employment

In Mexico the constitutional basis of social security resides in article 123 onemployment and social security.[3]Within the framework of international law protecting the right to socialsecurity, Mexico has ratified the International Covenant on Economic, Social andCultural Rights (ICESCR), the American Convention on Human Rights, the SanSalvador Protocol and several International Labour Organization (ILO)Conventions including No. 102 on social security (minimum standards).

According to Article 2 of the Social Security Law, the aim of social security inMexico is “to guarantee health care rights, medical assistance, the protectionof livelihood and social services that are essential for individual andcollective well-being, as well as the provision of a pension that, whereapplicable and where legal requirements have been fulfilled, will be guaranteedby the State.”

In general the system is based on an occupational model[4]and benefits salaried workers and their families, providing health careservices, pensions and some contributory social and economic benefits. But thismodel does not cover, for example, the unemployed or those working in theinformal sector. According to official figures for the first quarter of 2007(INEGI, 2007, p. 5-6), the unemployed numbered 1.7 million, resulting in anofficial unemployment rate of 4%, while informal sector workers numbered 11.4million, equivalent to 26.9% of the economically active population inemployment.

Moreover, according to the National Population Council (CONAPO) half ofMexico’s 31.7 million children are not covered by social security.[5]

It is also apparent that with the advance of job market flexibilization, theratio of temporary workers to permanent workers is increasing, and the former donot receive social security benefits even when they are working in the formalsector. According to the Mexican Social Security Institute (IMSS) 2004 report,jobs with social security coverage frequently pay less than jobs without it, andthis encourages workers to choose employment that does not provide IMSScoverage, or informal work, because it pays more than formal employment withsocial security (CESOP, 2004, p. 28).

TABLE 1. Summary of the main social security systems in Mexico

Source:Compiled by authors based on official information.

In 2006 a total of 58,302,000 people held benefit rights, 47,536,000 throughIMSS and 10,766,000 through ISSSTE (INEGI, 2006). According to the National Occupation and Employment Survey 2006, just over a third (35.7%) of theemployed economically active population had access to health institutions, whilethe other 64.3% were without coverage. Of those who did have access, IMSScovered 27.3%, ISSSTE 5.2%, state ISSSTE 1.3%, PEMEX together with the Navy andNational Defence Department 0.7%, and others 1.2% (IMSS, 2007, p. 6-7).

To provide coverage for the 57.8% of the total population who are not insured byany social security institution (non-salaried workers, the self-employed andunemployed), People’s Health Insurance[6]was created six years ago and by the second half of 2006 had 15,672,374affiliates (IMSS, 2007, p. 7). However, the 2006 Alternative Report’s chapteron the right to health care[7]condemns it as an instrument that institutionalizes a regression in the right tohealth care, violates constitutional principles of free and universal healthcare and follows the trend towards the progressive minimization andcommercialization of services provided for the general public.


Regressive pension reform versusinternational recommendations

The 1999 Alternative Report alerted the UN Economic, Social and Cultural RightsCommittee to the legal reforms of 1992 and 1997 that led to the replacement ofthe solidarity pension system by a system of individual contribution under theadministration of finance institutions that charge a commission for accountmanagement and earn interest from the investment of pension funds in the stockmarket. The Committee expressed its concern to the Mexican government aboutsocial security system privatization “which could result in those who cannotmake contributions to a private pension account being deprived of benefits…”(ECOSOC, 1999, E/C.12/1/Add.41, para. 24). The 2006 Alternative Reportalso condemned the performance of the Pension Fund Administrators (AFORES) andthe precarious situation of IMSS and ISSSTE.[8]In response the Committee recommended a number of measures to the government,such as “a thorough evaluation of the modifications to the current pensionsystem involved in the new law governing the Public Employees Social Securityand Services Institute, as well as future modifications to other social securitysystems, in order to guarantee that such modifications do not generateemployment insecurity for future pensioners or reduce the value of futurepensions thus endangering an appropriate standard of living” (ECOSOC, 2006, E/C.12/MEX/CO/4, para. 35).

The ILO Committee of Experts on the Application of Conventions andRecommendations has recently issued an individual observation for Mexico inrelation to Convention 102 on social security,[9]in which it requests from the government, among other things, the texts of theagreements with the private sector for the transfer of responsibility forservices, in order to verify their compatibility with the Convention, copies ofthe inspection reports, and information from supervision bodies indicating theaverage percentage of commission paid to AFORES. It also notes that the minimumguaranteed pension for 2005 is equivalent to 30.82% of the wage of an ordinaryadult labourer, which is considerably less than the minimum percentageprescribed by the Convention (40%), and that consequently the government isexpected to adopt the necessary measures to raise the minimum guaranteed pension(CEACR, 2007, Doc. No. (ilolex) 062007/MEX102). The observation relates tothe 1997 IMSS Law reform but it is foreseeable that the Committee will have topronounce again on Mexico’s non-compliance with Convention 102 in connectionwith the new ISSSTE Law.

A legal analysis[10] of the 28 March 2007ISSSTE Law reform concludes that it is a regressive measure when compared withthe previous legislation and that it contravenes both the Mexican Constitutionand specific provisions of Convention 102 that the Mexican state has anobligation to comply with. Although the new law contemplates several types ofinsurance and benefits that could be said to fulfil obligations incumbent onMexico, the truth is that they are regulated in a way that does not include theobligation to provide benefits “for the entire duration” of eachcontingency. Even worse, this law includes several specific articles thatentitle ISSSTE to withhold benefits, either because the department in which anindividual is working has not fulfilled its obligation to remit contributions orbecause of a discretional management of financial resources that employs amerely financial logic and not the criterion of rights fulfilment (provisions inarticles 15, 25, 196 and 198 of the new Law imply a complete lack of securityfor workers). Furthermore, this law is based on an individual contributionsystem administered by private institutions, in contravention of the obligationthat the social security system be collectively financed, as prescribed by ILOConvention 102.

Hundreds of thousands of public employees have politically mobilized and takenlegal action against this reform. Among the legal actions instigated are thefollowing:

• Writs of injunction: According to information from the Supreme Court,between May and July 2007 more than 160,000 legal actions were presented, ofwhich 107,000 were admitted, and it is expected that the Federal Judiciary willprotect workers affected and potentially affected by the reform.

• Claims by trade union organizations presented to the ILO AdministrativeCouncil based on violations of Convention 102: 10 claims have been presented andare awaiting admission.

• Complaints by trade union organizations presented to the ILO Freedom ofAssociation Committee based on violations of Convention 98 on the right toorganize and bargain collectively: 10 complaints have been presented, admittedand combined in case 2577.[11]

• If this type of reform is implemented in the rest of the system (in statecompanies, for example), the Mexican state will continue to contravene itsnational and international obligations in respect of the right to socialsecurity, and people will be compelled to resort to resistance strategies andextraordinary national and international legal mechanisms.


Challenges

• Demographic change is not the only challenge and may well not be theprincipal one as the authorities claim. Although fertility and child mortalityrates have decreased, while life expectancy has increased, effective measures toaddress inequality and poverty are still needed along with a review of thesocial security system administration that is facing problems such as:fragmentation, a lack of integral actuarial assessment, insufficient regulationof private stakeholders (especially financial institutions), tax evasion and adiminishing allocation of budget resources, while fines and surcharges arecancelled for big companies with debts due to non-remittance ofemployee/employer contributions to IMSS.

• Cuts in the social security and health budget must be prevented to avoidfurther worsening of the financial crisis facing service institutions, anincreased shortage of medicines and equipment and deterioration in the conditionof infrastructure and the quality of services.

• It is essential to re-conceptualize social security not only as awork-related benefit but also as a human right applicable to the entirepopulation, in the spirit of ICESCR Article 9.

• While the model continues to be an occupational one, social security canonly be guaranteed to the population through policies of full and properemployment that, among other things, widen coverage and guarantee adequatepensions.


References

CEACR (Committee of Experts on the Application ofConventions and Recommendations) (2007). Individual Observation on C102 Conventionon social security (minimum standards), 1952. Available from:<www.ilo.org/ilolex/spanish/newcountryframeS.htm>.

CESOP (Centro de Estudios Sociales y de Opinión Pública)(2004). “La seguridad social en México Panorama reciente y costo fiscal,2000-2005”. México: Cámara de Diputados, LIX Legislatura, PalacioLegislativo, 16 November. Available from:<www.diputados.gob.mx/cesop/doctos/Estudio%20Seguridad%20Social%20Final%202.pdf>.

ECOSOC (UN Economic and Social Council) (1999). ESCR Committee finalobservations on Mexico, 1999. Available from: <www.ohchr.ch>.

ECOSOC (2006). ESCR Committee final observations onMexico, 2006. Available from: <www.ohchr.ch>.

IMSS(Instituto Mexicano del Seguro Social) (2007). Informe al Ejecutivo Federal y alCongreso de la Unión sobre la situación financiera y los riesgos del InstitutoMexicano del Seguro Social, 2006-2007. Available from: <www.imss.gob.mx>.

INEGI (Instituto Nacional de Estadística, Geografía e Informática) (2006).“Población afiliada en el IMSS y en el ISSSTE según tipo dederechohabiencia, 1991 a 2006.” Available from:<www.inegi.gob.mx/est/contenidos/espanol/rutinas/ept.asp?t=msoc03&c=1881>.

INEGI (2007). “Resultados de la EncuestaNacional de Ocupación y Empleo (ENOE).” Communication 093, 16 May2007. Available from: <www.inegi.gob.mx>.

PND (Plan Nacional de Desarrollo) (2007). Plan Nacional de Desarrollo 2007-2012. México:Presidencia de la República. Available from:<www.presidencia.gob.mx>.


Notes:

[1] Poverty reductionmeasures taken between 1996 and 2005 have merely re-established the same povertylevels that prevailed prior to the 1995 economic crisis. In 2005, approximately18% of Mexicans were living in a condition of food poverty and 47% of thepopulation in a condition of ‘patrimonial poverty’ (in which minimum needsfor food, education and health can be met but with a per capita income that isnot sufficient for the acquisition of minimum requirements in housing, clothing,footwear and transport for each member of the household) (PND, 2007, Centraltopic: Equality of opportunities, Subject: Overcoming poverty).
[2] Mexico has 4,203hospitals, 1,121 of which are public and 3,082 private. The public sector has anaverage of 0.74 beds per 1,000 inhabitants, which is less than the figure of 1bed per 1,000 inhabitants recommended by the World Health Organization (WHO).Mexico has 1.85 doctors per 1,000 inhabitants, which is less than therecommended international average of 3 doctors per 1,000 inhabitants (PND, 2007,Central topic: Equality of opportunities, Subject: Health).
[3] Article 123,Section A, sub-section XXIX for workers in general and section B, sub-section XIfor state workers.
[4] The universal orBeveridge welfare model incorporates citizens’ basic rights to welfare, ischaracterized by unrestricted access to social services and is financed bytaxes. The occupational or Bismarck model corresponds to the distributiveprinciple of social security in which monetary benefits, and in particularpensions, depend on contributions made. (CESOP, 2004, p. 7-8).
[5] “Sin seguridadsocial la mitad de los niños, revela CONAPO”. ElSol de San Luis, 30 April 2007. Available from: <www.oem.com.mx/elsoldesanluis/notas/n259630.htm>.
[6] See: <www.ssa-sin.gob.mx/SEGUROPOPULAR/Index.htm>.
[7] The Report ofCivil Society Organizations on the Situation of Economic, Social, Cultural andEnvironmental Rights in Mexico (1997-2006) is an alternative report to the 4thPeriodic Report of the Mexican State on the Implementation of the ICESCR. Rightto Health Care chapter, coordinated by COCOMI, Mexico, April 2006. Available at:<www.equipopueblo.org.mx> and <www.ohchr.org/english/bodies/cescr/docs/info-ngos/mexico-coalition_En.pdf>.
[8]Ibid. Right to Social Security chapter, coordinated by Centrode Reflexión y Acción Laboral de Fomento Cultural y Educativo.
[9] In 1961 Mexicoratified Convention 102, the following parts of which are obligatory: II(medical care), III (sickness benefit), V (old-age benefit), VI (employmentinjury benefit) and VIII-X (Maternity benefit, Invalidity benefit andSurvivors’ benefit).
[10] This analysis isbased on the claim under article 24 of the ILO Constitution presented by severaltrade unions and coordinated by Rodrigo Olvera Briceño, ConsultoríaEspecializada en Justiciabilidad de Derechos Económicos, Sociales y Culturales(CEJUSDEC). Mexico, D.F., 6June 2007.
[11] Furtherinformation available from: <www.ilo.org>.