The Unequal Geography of Opportunity in Megacities: A Spatial and Living Wage Analysis of Mexico City
This essay appears in Vol. 74, No. 1, "Global Urbanization: Nations, Cities, and Communities in Transformation" (Fall/Winter 2021).
By Misael Galdamez and Amy K. Glasmeier
Forecasts predict that by 2030, the world will have 43 “megacities” of over ten million inhabitants. But megacity status comes with accelerating rates of economic and wealth inequality. The “center” city contains the majority of formal employment and gainful economic activity, while outlying areas lack access to transportation services, quality housing, and broadband internet access. Mexico City, ranked sixth in the world by population, has a geographic core of approximately nine million people and generates 18 percent of Mexico’s gross domestic product. Using Mexico City as a case study, we highlight the uneven geography of economic opportunity in modern megacities, employing a novel living wage analysis. We find that roughly 17 percent of three- and four-person households have sufficient economic resources for a dignified quality of life in Mexico City. Additionally, we analyze access to critical resources—including housing and transportation—to illustrate the precarity of Mexico City’s citizens. Emblematic of the modern megacity, Mexico City must bridge deep fissures in its social and economic fabric with carefully crafted and intentional public policy.
Introduction
Global urbanization is accelerating at a dizzying pace. We live in a world where 34 cities break the size barrier of 10 million people, most of which are predominately located in Global South regions. Central Asia boasts 11 megacities, the most globally, while nine are in India and six in Latin America. Various forces underlie the formation of today’s megacities, from political strife to agricultural modernization, to increasing climate variation. These factors and more add up to increasing concentration of populations in large global cities in an effort to find safety, security, and prosperity.[1]
Such conspicuous forces contribute to a myriad of challenges that diverge from the initial era of megacity development. In the early 2000s, Edward Glaeser and colleagues foretold that future megacities would be overcrowded, susceptible to high crime rates, lacking in infrastructure, and short on jobs, education, water, and housing.[2] In other words, the fundamentals would be missing or woefully inadequate to meet the basic needs of their citizens.
Highlighting this unequal moment of global urbanization, we present the case study of Mexico City, the second largest of Latin American cities. As in other megacities, Mexico City has bifurcated, splitting the low- and high-wage workforces into two separate factions. As the city continues to grow, urban congestion, endless traffic jams, water shortages, air pollution, and massive inequities expanded unabated. And as with other Global South megacities, the poor and economically vulnerable bear the burden of the uneven geography of opportunity. Mexico City falls short of its promise to provide an adequate quality of life for most of its citizens.
This paper first reviews the literature on modern megacities, highlighting the challenge of spatial inequality accompanying a city of the haves and have-nots. We then focus on the geography of gainful employment in the city. Following our analysis of the Mexico City’s economic structure, we employ a novel cost of living analysis to quantify the shortfall between what residents need to get by and average wages earned. This analysis shows just how short the city falls in providing a sustainable livelihood for its residents. We find that roughly only 17 percent of three- and four-member households earn a living wage in Mexico City. In general, patterns of economic sufficiency follow patterns of high-value economic activity.
This novel living wage analysis is also combined with a spatial analysis of resource access, including housing quality and work commutes, illustrating the intertwined nature of economic access and infrastructural conditions. In this way, we reveal the vulnerability of Mexico City citizens. Finally, we conclude with a discussion of planning priorities for equity and competitiveness in Mexico City, and global megacities more broadly. Emblematic of the modern megacity, Mexico City must bridge deep fissures in its social and economic fabric with carefully crafted and deliberate public policy.
Income and Inequality in Megacities
Dating back to the 1950s, megacities were predominantly capital cities, historic centers of commerce, or sites of resource extraction. The modern megacity has outlived this description. In some countries, megacities are the result of deliberate planning, as is the case with certain megacities in China, which serve as centers of industrialization. In Africa, megacity growth serves as catchment basins for rural peasants forced out of the countryside.[3] Regardless of their origins, megacities are magnets drawing in populations attracted by the prospect of jobs, infrastructure, and the necessities of life: food, clothing, and shelter.
The process of city growth often leads to rising inequality as population concentrations outstrip the development of infrastructure, the availability of jobs, and basic needs. Employment growth bifurcates with select numbers of high-skilled residents occupying high-paying jobs, granting them access to education, medical care, and personal security. A far larger share of total job growth is comprised of informal low-paid work.[4] The gap between the wealthy and the poor grows unabated and compounds over time. For example, the difference between the average income of the richest ten percent and poorest ten percent of households in China was 13 times in 2001; the corresponding difference in 2011 was 35 times, representing an unparalleled shift in wealth distribution even by world standards.[5]
New sources of inequality associated with changes in production and consumption further exacerbate urban income disparities. As Jan Nijman and Yehua Dennis Wei write:
The new economy has propelled urban inequalities in three ways: (1) greater bifurcation of the workforce and deepening income inequalities; (2) increasing inter-urban inequalities (growth vs. shrinkage); and (3) revival of central cities and urban centers that have become increasingly exclusionary, along with increased ‘sorting’ and inequalities between different suburban areas.[6]
As disparities in income increase, social conditions deteriorate the life expectancy of residents, and health problems emerge.[7] While the causal forces of massive growth may differ across megacities, the prevalence of rising inequality among them is quite similar. In our case study of Mexico City, the city’s growth over the last 50 years has led to widespread spatial inequality seen in zones of high income surrounded by bands of decreasing wealth and prosperity.
Previous research on Mexico City shows that higher-value employment in the broader metropolitan area remains centralized within the Federal District, despite the emergence of newer nodes of economic activity.[8] Residents’ ability to access formal employment, however, differs substantially.
Historically speaking, in Mexican cities, low income-households were clustered in peripheral areas with little access to infrastructural or urban services, while high-income households often concentrated near the historic center—or the location where a city first developed—and grew outward in one direction.[9] In the case of Mexico City, incomes and education have generally been higher near the historic center and west of the center, while the concentration of indigenous and low-income groups increases with relative distance from this historic center,[10] especially in the eastern and southeastern edges of the city.[11] By some estimates, 56 percent of Mexico City’s residents have below-average access to jobs, and those with the least access to jobs are in the eastern peripheries of the city.[12]
We build on these findings by presenting an updated analysis of the spatial incidence of inequality by focusing on the Federal District (Distrito Federal). We contribute a living wage analysis to this literature—estimating the minimum level of income for a basic but decent standard of living— to quantify the inequality of economic opportunity and to highlight its scattered geography. While recent research observed a decrease in income inequality and residential segregation in the metropolitan area from 1990 to 2010,[13] large inequalities continue to exist within the Federal District, especially related to a household’s ability to procure a dignified but basic standard of living.
The Case of Mexico City
Mexico City: Background
Mexico City,[16] the second largest of all Latin American cities, is one of 32 Mexican federal entities and the seat of federal power. It remains the most populous city in North America and the fifth-largest economy in Latin America.[17] The city is composed of 16 boroughs or municipalities (delegaciones), each with its respective mayor and neighborhoods (colonias). Cuahutémoc is home to the historic city center. The city’s population centers, in contrast, are in the boroughs of Iztapalapa on the east side of the city, Gustavo A. Madero in the city’s northeastern borders, and La Magdalena Contreras and Tlalpan on the southern edges of the city.
A Bifurcated City Structure
Whereas much of Mexico City’s population lives in the eastern half of the city, remunerated employment—or paid formal work—is concentrated in the Western boroughs. Cuahutémoc (591,000 workers),[18] together with the adjacent boroughs of Miguel Hidalgo (461,000 workers), Benito Juárez (276,000 workers) and Álvaro Obregón (250,000 workers), hosts large concentrations of formal and informal employment, primarily in commerce and services. Along with Venustiano Carranzo, these form the Central Business District.[19] Outside of the immediate core, in the east, Iztapalapa is also a large employment center (212,000 workers), fueled by its sizeable population and consumption-oriented spending and relative ease of access to the core region.
The Organizational Structure of Economic Activity[20]
In recent years, formal economic activity has moved steadily westward, which Aguilar and Hernandez note follows “the market dynamics of national and international private capital.”[21] And despite the presence of newer nodes of economic activity, the greatest part of economic activity— especially high-value economic activity—is still concentrated within the “central city.”[22]
This agglomeration of economic activity is comprised of large business enterprises and hosts the city’s multi-national employers. From a glance at gross output, it is clear that the city’s productive hub is located on the Western side. Just three boroughs—Cuauhtémoc, Miguel Hidalgo, and Álvaro Obregón—account for roughly half of total formal employment and 65 percent of total city production.[23] As such, worker wages are also highest in the most productive areas. The location of highly-paid employment largely reflects central business district access. In the central business district,[24] workers averaged 24,000 pesos a month in 2018, roughly ten times the minimum wage.[25]
Where Do Well-Paid Workers Live?
Mexico City’s economic heart lies in its historic center and Western municipalities. As a result, the workers and households who can access these opportunities experience the best socioeconomic outcomes. For example, median household incomes are highest in center-city boroughs, and boroughs in the top 25 percent of income also tend to be closer to (or at) the city center (Figure 1). The wealthiest borough, Benito Juárez, demonstrates median household incomes of 15,000 pesos a month. These findings are in line with Ziccardi, who finds that the boroughs of Coyoácan, Benito Juárez, Cuauhtémoc, Azcapotzalco, and Miguel Hidalgo have the lowest poverty rates in the entire metropolitan area.[26]
Where Do Poorly Paid Workers Live?
Workers in the southeastern municipalities, on the opposite side of the central city, earn the least. Three boroughs on the periphery earn 9,000 pesos less than their wealthier counterparts in a month. These boroughs— Azcapotzalco, Milpa Alta, and Xochimilco—consistently stand out for their low performance on various socioeconomic indicators and their high degree of marginality. For instance, workers in Milpa Alta earned approximately 4,200 pesos a month, only twice the minimum wage.
A partial explanation for low incomes in the eastern boroughs is the structure of employment, which is dominated by jobs in small firms, as compared with the western side of the city. Most businesses in eastern boroughs have fewer than ten employees. In contrast, larger firms with 11 or more paid workers are concentrated in the central business district boroughs.[27]
In addition to having the lowest median household incomes, the eastern and southeastern boroughs also display the lowest secondary education completion rates and the lowest labor force participation levels. More importantly, these boroughs are home to the largest concentrations of the city’s indigenous population and larger families with more children (Table 1). In general, it appears that as one moves away from the city center, median household incomes and educational attainment drop proportionately (Figure 1); as such, city extremities display the lowest incomes and educational attainment.
Table 1: Mexico City: Socioeconomic Indicators by Borough, 2015
Figure 1: Mexico City: Income and Educational Attainment by Borough, 2015
Source: Integrated Public Use Microdata Series using Intercensal Household Survey (2015). Note: Data in 2019 pesos.
Living Wage Analysis
From the preceding analysis, significant variations of socioeconomic success exist within Mexico City. However, these variations do not necessarily mean residents lack the necessities for a decent quality of life. To better understand how the above indicators influence life materially for households, we use original living wages estimates for three- and four-member households.
A living wage is the level of income needed to maintain a basic but decent standard of living and is generally determined by estimating the costs of the representative goods and services that constitute a minimally acceptable standard of living. Each bundle of representative goods is called a basket. Our analysis includes six primary baskets for food, housing, energy and utilities, transportation (including the cost of commuting and leisure trips), health spending, and miscellaneous costs.
First, to determine food costs, we created food baskets based on the Observatorio de Salarios’ previous work in Puebla.[28] The Observatorio’s baskets include a variety of products that the median household might consume in a given month, and are nutritionist-validated. The contents of the food basket were further validated against local consumption patterns using 91 intercept surveys at public markets. Once the food basket was confirmed to reflect cultural eating patterns and provide the adequate nutritional value, the total cost was calculated using official median price estimates[29] and household size.
Second, housing costs were estimated using Propiedades.com’s median rent database. We calculated city-wide median rent estimates based on a population-weighted median of the Propiedades.com data. Both three- and four-member households are assumed to rent a two-bedroom apartment. Private sector data was selected for our analysis, as public datasets underestimate the cost of rent.[30] Energy and utility costs, a vital component of overall housing costs, are estimated using the 75th percentile of expenditure by household size from the 2016 Household Expenditure Survey[31] and inflated to 2019 pesos.
Similarly, for all other expenditure categories, including transportation, we used the 75th percentile of household expenditure by household size. We selected the 75th percentile of consumption based on the Observatorio’s previous living wage research in Puebla.[32] Each component basket— including food costs and housing—was also validated against several comparator datasets.[33]
After validating component cost estimates, we estimate the 2019 living wage in Mexico City at 21,038 pesos for a household of three and 24,672 pesos for a household of four. Following this city-wide estimation of living wages, we then scaled the estimates to account for differences in cost, creating high-, middle-, and low-cost estimates by grouping boroughs with similar costs together. In general, living in a high-cost borough requires about 10,000 Pesos more in monthly income than the city-wide living wage, while residing in low-cost boroughs requires about 5,000 pesos less.
Based on our finer-grained living wage estimates, we find that roughly 17 percent of three- and four-member households earn a living wage in Mexico City (5,903 households out of 34,762 total). Looking at this analysis by borough, places with higher median household income tend to have more significant proportions of living wage-earning households. Unsurprisingly, the most affluent borough, Benito Juárez, has the highest share of living wage-earning households (Figure 2). In contrast, those with low socioeconomic access levels residing on the city’s periphery had few living wage-earning families.
Generally speaking, heads of living wage-earning households tend to have relatively high educational attainment levels, work in high-skill occupations, and are less likely to be indigenous (Table 2). On average, over half of these household heads work in a professional, legislative, managerial, or technical occupation. These results are broadly in-line with the analysis previously conducted by the Observatorio de Salarios, who found that only workers with a graduate-level education or higher earned a wage higher than their estimated living wage.[34]
Figure 2: Mexico City: Three- and Four-Person Households Earning a Living Wage (Percent)
Sources: Authors’ calculations using own estimates and Integrated Public Use Microdata Series using Intercensal Household Survey (2015).
Table 2. Profile of Households Earning a Living Wage
Sources: Author’s calculations using own estimates and Integrated Public Use Microdata Series using Intercensal Household Survey (2015).
An investigation of the household head’s work industry reveals a related pattern. Household heads in living-wage earning households tend to work in industries requiring higher skill levels. Of the household heads reporting their sector, the largest proportion worked in real estate and business services (16.5 percent of household heads). Other major industries for head householders include wholesale and retail trade (12.4 percent), non-specified services (9.4 percent), and education (8 percent). However, ten percent of living-wage earning household heads did not provide their industry.
For living wage-earning households, heads are overwhelmingly likely to work in professional occupations. Based on the International Standard Classification of Occupations (ISCO), these occupations are typically specialist roles that require high-level skills.[35]
Unsurprisingly, the central business district is home to sizeable professional employment clusters (Figure 3). These industries generally pay above the city average of 14,400 pesos a month. By contrast, the city’s eastern side and periphery host more lower-wage retail, hospitality, and manufacturing work (Figure 4). Further, in 2018, no eastern borough had corporate management employment, highlighting the city’s unequal geography of economic opportunity.
Figure 3. Employment in Professional Industries by Borough, 2018
Source: INEGI Economic Census, 2018. Note: Industries reflect NAICS codes 51 (Information), 52 (Finance), 54 (Professional Services), and 55 (Management).
Spatial Analysis of Housing Quality and Work Commutes
In Mexico City, the same peripheral boroughs that earn low wages demonstrate high levels of overcrowding (one in ten households), in addition to the lowest levels of internet access and poor-quality roofing (Table 3). We chose these housing quality and access indicators because they displayed the most significant data variation. They also have the most direct bearing on the quality-of-life concerns. Not surprisingly, Benito Juárez has the lowest overcrowding rates and the highest proportion of households with internet access. Other central city boroughs rank similarly.
Transportation costs also vary by relative distance to the city center, although not in the way one might expect.[36] Except for Milpa Alta in the extreme southeastern periphery, boroughs with the highest one-way commute expenditure are close to the city center, which is surprising given the availability of transit. However, the western and southern boroughs adjacent to the city center closer also tended to have the lowest public transportation rates for daily commutes. Overall, the closer a borough is to the city center, the shorter the average commute time, albeit with higher commute costs. In contrast, the further a borough is from the city center, the longer the average commute time, although with lower commute costs. To summarize, residents who live closer to the city face higher commuting costs, likely due to commuting mode, but can expect to commute for shorter periods.
Together, these facts point to a persistent social inequity evident in other Latin American cities: economic resources and opportunity are tied to access to the city center. However, the urban poor and indigenous populations are relegated to the peripheries, where commutes are long, access to formal employment and schooling is low, and necessary infrastructure often does not exist.[37] The current global pandemic has only heightened the challenges of maintaining a dignified quality of life for the urban poor. Predictably, the boroughs experiencing the greatest population-adjusted COVID-19 incidence have the highest household overcrowding rates and lowest healthcare access levels.[38]
Table 3: Mexico City: Housing Indicators by Borough, 2015
Sources: Integrated Public Use Microdata Series using Intercensal Household Survey (2015). Note: The overcrowding rate is defined as the percentage of households with more than 2.5 people per room, including the kitchen but excluding hallways and bathrooms.
Toward Spatial Justice
As Ziccardi notes, Mexico City is largely comprised of peripheral boroughs and populations in the east and southeast that suffer infrastructural deficits and high levels of vulnerability. By contrast, “the central city concentrates the best urban infrastructure and facilities, indicating the profound inequalities that exist in terms of quality of life between the inhabitants of the two areas.”[39] Our geospatial analysis conducted for Mexico City confirms the high degree of socioeconomic and spatial marginalization that peripheral boroughs in Mexico City face. Similarly, our analysis demonstrated that boroughs lacking access to transportation, quality housing, and broadband also lacked the financial resources for a stable and dignified quality of life.
The inequities evident in the spatially bifurcated Mexico City megaregion are hardly unique. But they do, however, make explicit the requirement that infrastructural policies and planning in megacities improve access to transportation, broadband communications, and educational infrastructure for citizens with the fewest material resources. Investments need guidance to account for the existing gross income inequities that force more impoverished citizens toward the margins of big cities. Planning practices need to consider the underlying consequences of decades of layered development that leave in place residuals that will persist unless designed from the start to reduce long-term inequities.
For Mexico City, there is a need to focus on primary inputs for disconnected households, namely transportation, housing, and broadband access. A lack of adequate and efficient public transportation—especially for peripheral boroughs—reduces the ability of workers to access gainful employment while increasing the relative time and monetary costs they face. While recent gains have been made in implementing rapid transit buses and the formalization of microbus transit operators,[40] greater investment is required to connect peripheral boroughs to employment nodes, especially secondary centers of employment like Santa Fe in Cuajimalpa.
Regarding housing, the metropolitan area has experienced a boom in housing construction since the 2000s. Most housing is built by developers and purchased with a mortgage.[41] However, this type of housing construction is only available for salaried workers (thus excluding informal workers) and is largely located in peripheral boroughs without strong access to employment.[42] In contrast to other major cities in Latin America, housing construction happens without the participation of housing agencies.[43] In this sense, there is a vacuum of leadership and planning. This, of course, gets to the problem of governance. Though the Mexico City metropolitan area covers three states and over 7,866 km2, the region lacks a coordinated metropolitan governance.[44] This type of regional governance is critical to coordinating investments and establishing a guiding vision and regulatory framework for equitable and sustainable development. In its absence, global free market forces determine the shape of and right to the city.
Maximum feasible participation is also prerequisite for Mexico City to evolve away from preexisting inequities, with attention to both local and global challenges. Decision-makers must engage residents in a district-by-district planning process that enables dialogue about lessening the current state of injustices. On top of existing conditions, climate change is anticipated to reinforce inequalities, especially in arid regions. Unless new infrastructure investments incorporate climate change mitigation strategies, problems will no doubt compound. Managing responses to external forces while recognizing extant internal conditions can unleash synergistic gains from inclusive planning processes.
Severe inequalities in economic opportunity exist in global megacities like Mexico City. Gainful employment and a decent quality of life require accessing the locations where formal economic activity occurs, whether access comes through education or transportation. Moreover, the base infrastructure that makes a city competitive and attractive is also unevenly distributed, generally accumulating near centers of economic activity.
Ironically, the geographies that can most stand to benefit from targeted policy interventions often have the least data available and receive the least attention. Creating effective public policies to support and include economically challenged communities requires building a better understanding of the unique struggles that communities on the margins face and bringing the knowledge from these communities into planning processes.
1 Janani Vivekananda and Neil Bhatiya, “Coastal Megacities vs. the Sea: Climate and Security in Urban Spaces” The Center for Climate and Security, Briefer 30 (2017).
2 Edward L. Glaeser, “A World of Cities: The Causes and Consequences of Urbanization in Poorer Countries,” Journal of the European Economic Association 12, no. 5 (2014), 1154–1199.
3 Ling Xin, “What’s Bigger Than a Megacity? China’s Planned City Clusters,” MIT Technology Review, April 28, 2021, https://www.technologyreview.com/2021/04/28/1022557/china-city-cluster-urbanization-population-economy-environment/.
4 University of Rochester, “Larger Cities Drive Growing Wage Gap Between the Rich and the Poor, Study Shows,” ScienceDaily, June 11, 2021, https://www.sciencedaily.com/releases/2011/02/110207103607.htm.
5 “The World’s Largest Cities Are the Most Unequal,” Euromonitor International Market Research Blog, March 5, 2013, https://blog.euromonitor.com/the-worlds-largest-cities-are-the-most-unequal/.
6 Jan Nijman and Yehua Dennis Wei, “Urban Inequalities in the 21st Century Economy,” Applied Geography 117, no. 2 (2020), 102118, 2.
7 Edward L. Glaeser, Matt Resseger, and Kristina Tobio, “Inequality in Cities,” Journal of Regional Science 49, no. 4 (2009), 617–646.
8 Alicia Ziccardi, “Poverty and Urban Inequality: The Case of Mexico City Metropolitan Region,” International Social Science Journal 65, no. 217-18 (2016), 205–219.
9 Paavo Monkkonen, Jorge Montejano Escamilla, Erick Guerra, and Andre Comandon, “Urban Sprawl and the Growing Geographic Scale of Segregation in Mexico, 1990-2010” in Urban Socio-Economic Segregation and Income Inequality: A Global Perspective, eds. Maarten van Ham, Tiit Tammaru, Ruta Ubarevičiene, Heleen Janssen (Cham, Switzerland: Springer, 2021), 394.
10 Alicia Ziccardi, “Poverty and Urban Inequality: The Case of Mexico City Metropolitan Region,” International Social Science Journal 65, no. 217-18 (2016), 205–219.
11 Alicia Ziccardi, «Vivienda, Gobiernos Locales y Gestión Metropolitana» in Los Gobiernos Locales y Las Políticas de Vivienda en México Y América Latina, by Alicia Ziccardi and Daniel Cravacuore (Buenos Aires, Argentina: CLACSO, 2017), 13–30.
12 Christo Venter, Anjali Mahendra, and Dario Hidalgo, “From Mobility to Access for All: Expanding Urban Transportation Choices in the Global South,” World Resources Institute Working Paper (2019), 14.
13 Ruta Ubarevičiene, Heleen Janssen (Cham, Switzerland: Springer, 2021), 394; Alicia Ziccardi, “Poverty and Urban Inequality: The Case of Mexico City Metropolitan Region,” International Social Science Journal 65, nos. 217–18 (2016), 205–219; Paavo Monkkonen, Jorge Montejano Escamilla, Erick Guerra, and Andre Comandon, “Urban Sprawl and the Growing Geographic Scale of Segregation in Mexico, 1990-2010” in Urban Socio-Economic Segregation and Income Inequality: A Global Perspective, eds. Maarten van Ham, Tiit Tammaru, Rūta Ubarevičienė, Heleen Janssen (Cham, Switzerland: Springer, 2021), 89–95.
14 In 2019, the authors chose Mexico City as a location for a pilot application of the conceptual model of living wage estimation based on the MIT Living Wage Calculator’s methodology, created by Drs. Tracey Farrigan and Amy Glasmeier. Given its importance to the national economy, we chose Mexico City as a test case to adapt the living wage model to the Mexican Republic. The city displays a labor market pattern found in other global, primate metropolitan areas, a bifurcated economic structure of high value-adding industries, which unleashes demand for vast quantities of low-wage jobs to absorb the displaced agricultural labor. The result is high costs of living, socioeconomic diversity, and patterns of spatial segregation.
15 Nathaniel Parish Flannery, “Mexico City is Focusing on Tech Sector Development,” Forbes, December 23, 2013, https://www.forbes.com/sites/nathanielparishflannery/2013/12/23/mexico-city-is-focusing-ontech-sector-development/.
16 In 2019, the authors chose Mexico City as a location for a pilot application of the conceptual model of living wage estimation based on the MIT Living Wage Calculator’s methodology, created by Drs. Tracey Farrigan and Amy Glasmeier. Given its importance to the national economy, we chose Mexico City as a test case to adapt the living wage model to the Mexican Republic. The city displays a labor market pattern found in other global, primate metropolitan areas, a bifurcated economic structure of high value-adding industries, which unleashes demand for vast quantities of low-wage jobs to absorb the displaced agricultural labor. The result is high costs of living, socioeconomic diversity, and patterns of spatial segregation.
17 Nathaniel Parish Flannery, “Mexico City is Focusing on Tech Sector Development,” Forbes, December 23, 2013, https://www.forbes.com/sites/nathanielparishflannery/2013/12/23/mexico-city-is-focusing-ontech-sector-development/.
18 Unless otherwise noted, all data are from the Integrated Public Use Microdata Series Using Intercensal Household Survey, 2015.
19 Adrian G. Aguilar and Josefina Hernandez, “Metropolitan Change and Uneven Distribution of Urban Sub-Centres in Mexico City, 1989–2009,” Bulletin of Latin American Research 35, no. 2 (2016), 191–209.
20 Firm incidence is high in the central business district, as is expected. Many businesses are also present in the eastern half of the city, especially in Iztapalapa, the most populous borough.
21 Adrian G. Aguilar and Josefina Hernandez, “Metropolitan Change and Uneven Distribution of Urban Sub-Centres in Mexico City, 1989–2009,” Bulletin of Latin American Research 35, no. 2 (2016), 206.
22 Alicia Ziccardi, “Poverty and Urban Inequality: The Case of Mexico City Metropolitan Region,” International Social Science Journal 65, no. 217-18 (2016), 205–219.
23 Data are from INEGI’s 2018 Economic Census.
24 The Central Business District is defined according to Aguilar and Hernandez.
25 Data are from INEGI’s 2018 Economic Census. In 2018, the daily minimum wage was $97.76. Assuming a six-day work week, the monthly minimum wage amounts to $2346.24 (“Notas a Los Estados Financieros al 31 de Diciembre de 2018 y 2017”).
26 Alicia Ziccardi, “Poverty and Urban Inequality: The Case of Mexico City Metropolitan Region,” International Social Science Journal 65, no. 217-18 (2016), 205–219.
27 Data are from INEGI’s 2018 Economic Census.
28 Salario Mínimo Constitucional en México, Informe del Observatorio de Salarios (Puebla, Mexico: IBERO Puebla, 2014), http://repositorio.iberopuebla.mx/licencia.pdf.
29 Data from INEGI’s Índice de Precios Promedios (2017).
30 Misael Galdamez, “¡El Salario Es de Quien Trabaja! A Methodology for Living Wage Estimations in Mexico City,” MIT DSpace, June 2019, https://dspace.mit.edu/handle/1721.1/123954.
31 ENIGH; National Institute of Statistics, Geography, and Informatics (INEGI), 2016.
32 Based on this research, the 75th percentile of consumption represents the minimum level of income (or spending) required for a dignified quality of life. For more details, see Misael Galdamez, “¡El Salario Es de Quien Trabaja! A Methodology for Living Wage Estimations in Mexico City.”
33 Misael Galdamez, “¡El Salario Es de Quien Trabaja! A Methodology for Living Wage Estimations in Mexico City,” MIT DSpace, June 2019, https://dspace.mit.edu/handle/1721.1/123954.
34 Salario Mínimo Constitucional en México, Informe del Observatorio de Salarios (Puebla, Mexico: IBERO Puebla, 2014), http://repositorio.iberopuebla.mx/licencia.pdf.
35 These roles cross various industries (for instance, education, real estate, science, and mathematics). The activities performed in their roles can include conducting analysis and research, teaching, or providing business, legal, or health services. These jobs also tend to require tertiary education. Service and sales jobs form the second largest group; this category includes workers providing personal and protective services related to travel, housekeeping, catering, personal care, and selling goods in wholesale or retail shops. In contrast to professional roles, these occupations require less education—completion of the first stage of secondary education is necessary for some positions. Others require completing secondary education (“International Standard Classification of Occupations: Structure, Group Definitions and Correspondence Tables (Vol. 1)” 2012).
36 Transportation Costs were estimated using the 2017 Encuesta Origen Destino en Hogares en la Zona Metropolitana del Valle de México, a household travel survey designed to improve the understanding of resident mobility in the Mexico City’s metropolitan area.
37 Nirav Patel and Jeffrey Gutman, “Addressing Spatial Inequity in Latin American Cities,” (Washington, DC: Brookings Institution, 2018). Robert Muggah, “Latin America’s Cities Are Ready to Take Off. But Their Infrastructure Is Failing Them,” World Economic Forum, 2018, https://www.weforum.org/agenda/2018/06/latin-america-citiesurbanization-infrastructure-failing-robert-muggah/.
38 Emilio Rodríguez-Izquierdo, Sol Pérez-Jiménez, Leticia Merino-Pérez, and Marisa Mazari-Hiriart, “Spatial Analysis of COVID-19 and Inequalities in Mexico City,” Universidad Nacional Autónoma de México Working Paper (2020), https://www.un.org/development/desa/dpad/wp-content/uploads/sites/45/ COVID-19-Mexico-City.pdf.
39 Alicia Ziccardi, “Poverty and Urban Inequality: The Case of Mexico City Metropolitan Region,” International Social Science Journal 65, no. 217-18 (2016), 216.
40 Christo Venter, Anjali Mahendra, and Dario Hidalgo, “From Mobility to Access for All: Expanding Urban Transportation Choices in the Global South,” World Resources Institute Working Paper (2019).
41 Paavo Monkkonen, Jorge Montejano Escamilla, Erick Guerra, and Andre Comandon, “Urban Sprawl and the Growing Geographic Scale of Segregation in Mexico, 1990-2010” in Urban Socio-Economic Segregation and Income Inequality: A Global Perspective, eds. Maarten van Ham, Tiit Tammaru, Ruta Ubarevičiene, Heleen Janssen (Cham, Switzerland: Springer, 2021), 89–95.
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