And why are Bank of Mexico executives and employees resigning in droves?
By Don Quijones | 24 September 2018
WOLF STREET — Around 200 central bank employees, including 20 senior executives, have left their posts at the Bank of Mexico (Banxico) since presidential elections on July 1 handed a resounding victory to populist Andrés Manual Lopez Obrador (or AMLO). Unsurprisingly, their sudden departure has a lot to do with money.
One of AMLO’s manifesto pledges was to slash salaries for senior government officials and bureaucrats as part of sweeping cost-cutting measures. So far, he’s kept to his word. Last week, Congress, now under the majority control of his party, Morena, passed a law that will make it impossible for any state employee to earn more than the president. The gross monthly salary of the current president, Enrique Peña Nieto, is 209,135 pesos ($11,700). AMLO has pledged to cut the salary in half when he takes over the post on December 1.
The law will come into force in January and will apply to all three federal branches of government as well as regional and local government institutions. This could be a major problem for employees of Banxico, since all of them are considered public officials and many of them earn more than the current president. The average monthly salary of a Banxico board member is 365,000 pesos ($19,400), around 70% more than Peña Nieto’s and over 230% higher than the salary AMLO has pledged to pay himself.
Banxico has refused to comment on the matter but it’s safe to assume that the gathering exodus of central bank employees has at least something to do with AMLO’s plan to slash their salaries. Mexico’s central bank workers, it seems, are less enthralled by the austerity principle when it’s applied to their own income rather than others’. Naturally, many of the officials leaving Banxico will slot seamlessly into better paid jobs in the private sector, where their expert knowledge and lists of handy contacts will be put to excellent use. […]