Saturday, December 7, 2013

Sluggish labor market a victim of Mexico's economic backslide in 2013

"The notion of reducing poverty without economic growth and the generation of quality jobs is illusionary" - U.N. official in Mexico

Guadalajara -
Only one of three persons seeking work in this country was able to secure formal employment in 2013, Mexico's Banco Base has reported in an end of the year analysis. The nation needs to create at least 1.5 million jobs a year to keep up with demographic demands, but in 2013 fewer than half a million full time positions opened.

The poor report card will not surprise most, since Mexico's gross domestic product will be lucky to grow a paltry 1% this year. Official government reports will be out in about a month, and they're not expected to be pretty. Wal-Mart sales in free fall a good barometer of Mexican economy on the skids. The effects of a deaccelerating economy, which some say is in full recession, are being felt throughout the nation. Mexico's economic woes take a toll on Yucatán business.

In July the Peña Nieto administration announced a National Crusade Against Informal Employment. About 30 million Mexicans - almost 60% of the currently employed labor force - work in the informal economy. That's another way of saying that they are self-employed and earn a mere subsistence income. Included within their ranks are street vendors and small retailers, domestic and agriculture workers and home based businesses. Most such workers are males between the ages of 25 and 44, but many are far younger. They receive no benefits from any quarter, and enjoy none of the legal protections employed workers have. They are without an economic safety net. Enrique Peña Nieto announces plans to get more workers on real payrolls

Peña Nieto's goal is to move those workers into jobs with guaranteed wages and collateral benefits - and of course, to collect the employment taxes on their earnings to fund those benefits. Doing so will be a daunting, long term task, for economic and sociocultural reasons. But the PRI administration is convinced it will make Mexico a more competitive nation in the long run. On that score there can be virtually no disagreement. Gross economic disparity still a hard fact of Mexican life.

In 2012 the Mexican economy created 700,000 new jobs, but this year only 480,000. The prospects for 2014 are better according to some analysts, but openings will remain about half of those sought by workers actively seeking full time employment. Many are credentialed and highly qualified, but all too frequently that proves counterproductive. Mexican unemployment stats paint a bleak picture for the most well educated.

Yesterday a U.N. official in Mexico, speaking rather bluntly, said that "the notion of reducing poverty without economic growth and the generation of quality jobs is an illusion." Mexico's tax collector and budget planner said exactly the same thing in August.

Feb. 18, 2014 - Mexican economy continues to shed jobs

July 29, 2013 - 53.3 million - that's how many Mexicans live in poverty
July 14, 2013 - Over 60% of Jaliscans earn less than subsistence income
May 23, 2013 - Mexican population is soaring, and most are young
July 29, 2012 - Yucatán has well-educated labor force, but offers one of Mexico's worst job markets
Apr. 23, 2012 - AMLO: Economic inequality is the primary cause of Mexico's insecurity

© MGRR 2013. All rights reserved. This article may be cited or briefly quoted with proper attribution or a hyperlink, but not reproduced without permission.

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