Covid-19 left 2 million workers without social security in Mexico: ILO

At the distance of the months in which the covid-19 suffocating the country with more force, the results of the damage are becoming better known. The International Labor Organization (ILO) announced this week that the population in Mexico that traded in some scheme of social Security decreased from about 21 million in 2019 to 19 million in 2020.

About 2 million workers They stopped contributing for a pension, accumulated weeks to retire one day, have the right to a paid disability or direct access to health services, according to the report Panorama of social protection in Latin America and the Caribbean: Progress and setbacks in the face of the pandemic.

According to the National Commission of the Retirement Savings System (Consar), in March 2020 more than 120,000 people they asked for a part of their accumulated money because they became unemployed. Three months later, in June of that year, the number of withdrawals rose to more than 175,800.

Despite the fact that formal employment has been recovering, people have continued to make unemployment retirements. More than 174,000 new formal jobs were created last September, but another 170,573 people withdrew money from their savings accounts for unemployment retirement.

The fall of contributors to social security in the region it was 7.3%, says the ILO report. The Andean countries: Bolivia, Colombia, Ecuador and Peru, were the most affected, in those nations the decrease was 24.5 percent.

The second subregion with the greatest damage was the Southern Cone: Argentina, Brazil, Chile, Paraguay and Uruguay. There the drop in contributors was 5.2 percent. “And finally, Central America and Mexico which experienced a 1.2 percent decrease ”.

Changes in trends

Although the majority of working people in Latin America and the Caribbean worked informally before the pandemic, the region had increased the number of contributors to the social Security. But the economic impact of the health emergency wiped out the advances in this area made in the last decade, says the ILO.

In 2005 only 36.6% of the employed population had social security coverage. With ups and downs through the years, by 2019 the proportion was already 46.6 percent. In the 2012-2019 period “the number of contributors increased by 14 million people and the number of employed persons by 22 million, which represents an increase of 14 and 9.6%, respectively.”

Last year, 216 million people in the 12 countries that make up the region they had an economic activity. Of these, just under half, 105 million had social security, while in 2019 this proportion was 113.2 million. That is, 8 million workers in Latin America and the Caribbean came out of formality and with it, social security.

“The job destruction formal and informal has been significant ”. However, unemployment was higher for those who worked in informal occupations, where they did not have social security coverage.

The ILO explains that this has not been the case in other recessions. “Usually the informal employment it absorbed workers leaving the formal sector and consequently limited the rise in unemployment ”.

But this time, due to sanitary restrictions To stop the contagion of covid-19, the informal sector had much less opportunity to continue with its activities. Strategies like home office They were not viable for many of the people in the informal sector and they had no choice but to shelter in their homes, without income and without the social security that they did not already have.

Elderly pensions, the lifesaver

The scenario described above was also observed in Mexico. The country started 2019 with more than 55.6 million people busy. Of these, more than 20.9 million had access to health services through their jobs and more than 34.3 million worked without social security, according to the National Institute of Statistics and Geography (Inegi).

The agency estimated that from April to June 2020 more than 12 million people could not continue working or were fired. According to the ILO, at least 2 million of them did have social Security, but they stopped accessing several rights that this coverage granted them when they were unemployed.

The latest report on poverty from the National Council for the Evaluation of Social Development Policy (Coneval) indicates that in 2018 only 35% of working people had access to social security. By 2020 that population increased to 35.8 percent.

However, it indicates a drop in 13 of the 32 states, ranging from 0.4 to 4.3 percent. The most affected was Quintana Roo, where tourism is its main activity and one of the first also to stop due to the pandemic crisis.

“In that scenario the non-contributory benefits, especially in the context of the pandemic, they played a key role in reducing or avoiding the increase in poverty and extreme poverty ”, highlights the ILO.

Last April, Congress approved an initiative by President Andrés Manuel López Obrador to elevate social programs in favor of vulnerable groups to constitutional status, including the pensions for older adults.

Currently, more than 8 million older adults they receive 3,100 pesos every two months as a pension. By 2024, the support figure will be 6,000 pesos every two months, as the president has promised.

According to the ILO report, “in Central America and Mexico the lack of income and pensions for the elderly: 52.7% have no income, 21% receive a pension, 2.4% receive income from work and a pension and 24% receive only income from work ”.

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