Universidad Autónoma de Nuevo León

Facultad de Contaduría Pública y Administración

Bachelor: International Business

COMPENSATIONS
EVIDENCE 1: Background on Wages in Mexico and the World

Professor: Jorge Leal Iga

Group: 8Ai
Team: Gray
Names: ID:
Padilla Lopátegui Brian Rafael 1988870
Rodriguez Molar Gilberto 1731423
Ramírez Cepeda Emiliano 1844148
Rangel Delgado Paholy Montserrat 1752209
Tamez Martínez Jackelin 1865430

Due Date: 17/08/2022

 Background on Wages in Mexico and the World

History of wages in the world

In the Ancient Ages, one can find an impressive amount of what in this 21st century we
consider atrocious activities. We are talking about the types of work, the payment is given for
it in different parts of the world but in the same time as the Ancient Age, in Mesopotamia as
well as in Egypt, Rome and Greece there were slaves and free workers, some with better
benefits than others but in the end poorly paid workers.

In each of these cases they were paid with food, in the Mesopotamian, it was paid with sila
which consisted of a liter of barley, a little oil, and spice of syrup, this is one piece for slaves
and two pieces for free laborers, This works in the same way in Egypt the payment of food
was a little more generous with food such as bread, meat, wheat in quantity, oil, etc, however,
the slaves who had more benefits in their payment were those of Greece as workers could get
even a small piece of land in some cases. On the other hand, slaves in Rome had to work 15
hours a day or in other cases from sunrise to sunset because they were considered objects and
not people.

In the Middle Ages, labor ordinances issued in the wake of the 1348 Black Plague not only
restricted wages but also demanded the textual encoding of identity in the form of letters
patent issued for migrating laborers among villages. These ordinances were issued for the
purpose of fixing wages. At that time, an increase in salaries was observed due to the Black
Plague. This happened because, as the Black Plague caused a third of Europe's population to
be lost, work became scarce, while the land remained abundant. Thus, with fewer workers
available to till the land, workers became valuable while units of land produced less value.
With this, the workers improved their quality of life by increasing their salary, while the
landowners were forced to reduce the rental price of their land (Nieves, 2016).

In the Modern Era, with the subdivision of work, the need arose to look for options that
would replace the simple activities carried out by the worker. That specialized work brought
with it an increase in the number of workers needed, which represented the fact that a greater
number of wages would have to be paid. This search to replace workers brought with it the
emergence of what is known as the Industrial Revolution, where machinery began to replace
workers in certain operations, managing to increase the speed of tasks and productive
efficiency (Varela, 2013).
The Industrial Revolution was born in the middle of the 18th century, and with it came a
whole transformation. People went from living in rural areas to moving mostly to cities. The
steam-powered machines that were implemented in the industries made the articles to be
produced more quickly, making possible an enormous growth of the factories. It is also
important to mention that with the Industrial Revolution the problem of unemployment arose.
This is because the machinery came to displace man's work, causing their salary to be
affected as well (Fleming, 2020).

Workers were dissatisfied with the implementation of the machinery in the industry and the
changes that these caused in their environment. In these rural areas where people moved,
really bad working conditions began to be noticed. For this reason, labor movements began to
emerge because people wanted to have a better quality of work. All this labor movement and
the rebellion that the workers had against the machines led to the appearance of the first labor
unions in the 19th century. Thus, it would be possible to improve the working conditions of
the workers and, therefore, increase their salaries (Mollenkamp, 2021).

History of wages in Mexico

During the pre-court era the beginnings of wages started during the Aztec's mandate where it
was shown a way of order and organization between the Calpulli people who received a wage
based on their distribution in the communal work, although their salary was not paid due to
specific activities, they were rewarded in ways of food, clothing, and land to cultivate. (J. L.
2018).

Various prerogatives and amenities were given to national and foreign capitalists during
President Porfirio Diaz's term in order to promote the country's industrialization, in addition
to strict control over workers, who were denied the right to strike, health services, social
security, and, most importantly, laws regulating employment conditions, including work
time. As a result, while there was substantial economic development during the Porfiriato,
there was also significant disparity and social injustice, and the economy was governed and
monopolized by a few income sectors, and a large portion of the population suffered from
scarcities in terms of basic food, health, education, clothing, and other necessities (Reyes,
2011).

On the other hand, industrial activity in Mexico was boosted at the end of the nineteenth
century by the activities of cotton mills, which also incorporated the system of patterned
shops, in which workers were provided with consumer goods, but the amount purchased in
the days preceding payment was subtracted from their salary (Esquivel et al., 2017). As a
result, the resultant inflation absorbed the majority of the pay increases, which were unequal
and varied from area to area, as well as from industry to industry, based on the worker's age
and gender.

Wages in Porfiriato dropped below the bare minimum required to support the requirements of
employees and their families and this also ensured that Mexico would enter a stage of
industrialization during the Revolution, in which the workforce would be more productive
due to greater salaries (Morales & Reyes, 2019). Furthermore, as a result of the Revolution,
the workers were able to include a minimum wage in their national constitution, preventing it
from going below the minimum essential to support their own and their family’s needs.
However, despite the fact that salaries increased steadily under Porfirio Diaz's rule, from
$0.33 in 1877 to $2.5 in 1912, earnings remained insufficient to cover basic living necessities
(Juárez, 2013).

The difference in minimum wages between Mexico and the United States is one of the most
notorious wage differentials between countries that share a border. However, this does not
necessarily mean unfair competition on the part of Mexico, and to increase wages without an
adequate comprehensive economic analysis could mean the loss of a "comparative
advantage" that developing countries, such as Mexico, have over developed countries such as
Canada and the United States in regard to commercial exchanges.

Conceptual Map
References

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Fleming, S. (2020, September 3). A short history of jobs and automation. World Economic
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Juárez, R. A. V. (2013). Administración de la compensación (2nd ed.). Pearson.

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