Salinas Pliego sparks controversy in Mexico by stating that employers should not contribute to pensions

The businessman Ricardo Salinas Pliego, in April 2020. Andrea Murcia / Andrea Murcia

Ricardo Salinas Pliego, president of Grupo Salinas, a contractor of the current Government and close to President Andrés Manuel López Obrador, published an article on his personal blog on Tuesday that caused great controversy.

In the letter, the businessman and second richest man in Mexico stated that workers are the only ones who must save for their pension, a thesis disputed by economists in a country marked by income inequality and low pensions.

“In reality, the employer has no incentive to guarantee [the worker] a decent pension, especially in this world with enormous labor mobility.

For the employer, any contribution to the worker's pension is just one more tax, ”says Salinas Pliego, who compares the fee for each worker as“ a dissuasive effect ”for job creators.

The businessman expresses in his text that paying to have someone contributing to Social Security has the same effect as "taxes on sin, such as those applied to tobacco, alcohol and highly caloric foods".

Ricardo Salinas Pliego defends in his letter that pension savings should fall on the workers.

"Those who propose that the State take over the pensions are ignorant of the economic reality" and insist that each worker save 20% of their salary to channel those resources to long-term investment projects.

“Who should sacrifice personal and family consumption in order to enjoy their savings in the future?

The pensioner.

He and only he has the obligation to save to aspire to a dignified future ”, says the owner of Banco Azteca and Grupo Elektra.

Mexico is one of the countries with the lowest replacement rate, around 30%, which translates into a very low pension at the time of retirement, according to data from the Organization for Economic Cooperation and Development (OECD) and the National Commission of the Retirement Savings System (CONSAR).

The new pension reform that the López Obrador Government wants to carry out seeks to expand the coverage and the amount for the beneficiaries, which means that the employer contribution will increase in the next ten years from 5.15% to 13, 87%.

Alejandra Macías, Director of Research at the Center for Economic and Budgetary Research (CIEP), considers that retirement contributions should be distributed between the State, the company and the worker, as in the current scheme.

“Salinas Pliego says that workers should save 20% of their income, hopefully we all earn like him.

65% of IMSS workers earn less than four times the minimum wage, that's like 12,000 or 13,000 pesos a month.

From there you have to pay food, tuition, transportation, where do you get to save? ", Replies the pension specialist." Having a pension or Social Security is a right and as such the State has to guarantee it as the right to health and education, despite the situation of inequality that we live in Mexico and the lack of resources that do not reach the entire population. "

Another of the annoyances that the Mexican businessman shows in his controversial text is the reduction in the commission of the Afores, in charge of managing the savings of the workers until their retirement.

The new reform proposes to reduce the current 0.98% to 0.5%.

"This would mean reducing the income of the Afores by half, which would also impact Banco Azteca's Afore, owned by the businessman," says Alejandra Macías.

The businessman's words about pensions were harshly criticized on social networks.

It is not the first time that Salinas Pliego has expressed himself insensibly with his workers.

During the first months of confinement, Grupo Salinas urged its employees to continue reporting to work and from its television the message was launched not to pay attention to official information about covid-19.

Last July, a former employee of her foundation denounced through social networks that she had been fired in the middle of the coronavirus pandemic.

The businessman replied from his personal account: “I am disappointed to know that you are an ungrateful person with whom you occupied for 18 years.

If you had known ... your departure was earlier ”.

I am disappointed to know that you are an ungrateful person who has occupied you for 18 years.

If I had known ... your departure was earlier.

- Ricardo Salinas Pliego (@RicardoBSalinas) July 31, 2020