Exodus of middle-class youth threatens the sustainability of social programs

Imagine a young Mexican who is 25 years old. He studied, got a poorly paid job, and every two weeks, he sees taxes deducted from his paycheck without knowing how they're used. He knows that, if he's lucky, he'll manage to save for a car, but never for when he gets old. He also knows that, when he grows old, no one will guarantee him a decent pension. However, he does pay for others'. This is how Mexico works today, under the socialist government of Morena.

Our country is aging at a rapid pace. For example, in 1970 there were only 1.8 million older adults, and by 2050 there will be nearly 29 million, meaning more than one in five Mexicans. The universal pension, one of Morena's flagship policies, already benefits more than 28 million people and its cost has skyrocketed, as it went from 8 billion to 24 billion dollars in just six years.

Still, there are plans to increase it to levels equivalent to a full salary... It sounds generous, but it's a luxury we can't afford.

The growing burden of universal pensions

Since 2019, the federal pension has doubled and today covers more than 28 million Mexicans. For socialists, the more Mexicans receive money, the better, since they don't understand that distributing money among millions of people is not sustainable.

Even so, they move forward and increased the social budget from 8 billion to 24 billion USD in six years...

It is well known that older Mexican adults are hardworking. Half of them contribute to a contributory system and some continue working. But there are more of them who no longer contribute economically to the country's labor market and depend on a clientelist program full of leaks and corruption, which forces the State to sustain a system that will grow exponentially.

The burden young people carry

The money to finance those who didn't think about their future comes from public coffers, that is, from the pockets of young workers. They are the ones who, in addition to paying extremely high taxes, must endure insecurity, lack of opportunities, and stagnant economic growth.

Many can't take it anymore...

Years ago, I conducted a survey for an academic project, where I asked several classmates if they would leave Mexico to study. The majority said yes. When I asked if they would return, they told me no.

That school project is even more relevant now. According to official figures, Mexico is now the second largest sender of migrants to the United States. The brain drain and loss of working hands is a reality our country faces. Youth from the forgotten middle and upper-middle class are leaving the country because here, in addition to facing violence and lack of formal employment, they feel they're carrying on their shoulders a system that only takes from them.

Morena boasts about its social programs and they're convinced they're necessary, but deep down they're a burden for the future. Every peso allocated to unsupported pensions is one less peso to create jobs or invest in development. Meanwhile, those who still produce are punished and dependence on the State is encouraged.

A ticking time bomb

If nothing changes, the system will collapse. Every year there are fewer young people contributing and more older adults depending on aid. It is not sustainable. The most serious thing is that this crisis is not only financial, but also moral. Morena is mortgaging the future of those who should be building their lives today.

The solution is not easy, but it is clear. The social burden and the taxes that suffocate entrepreneurs must be reduced. We must return to a model where everyone contributes to their own retirement, with a solidarity pillar for those who truly need it, not for everyone equally.

OECD and CONSAR (National Commission for the Retirement Savings System) had warned that Afores, before Morena's intervention, had high returns and represented a fairer and more sustainable system.

It is also urgent to encourage voluntary savings. We must save. Today, only 37% of young people save anything for their old age. It is a failure of the educational system and Mexican financial culture.

Continuing to bet everything on universal pensions is like building a house on sand.

Thinking with a cool head

The left has governed with emotions and feel-good policies, since giving away money wins votes, but destroys countries. Youth know it, which is why they leave. If we don't cut unsustainable social spending and don't build a responsible pension system, Mexico will face not only an economic crisis, but a social breakdown.

The solution requires thinking differently. Being more political, more critical, more rational. Stop applauding those who hand out money and demand from those who create opportunities. Reduce taxes, generate employment, and stop punishing those who work.

Because every day that passes with this system, the bomb keeps ticking down to zero. When it explodes, neither young nor old will have a future.