Labor Day: informal employment grows

In his third year in office, President Andrés Manuel López Obrador arrives on May 1, Labor Day, with numbers that make it clear that informality is becoming stronger as the basis of economic recovery.

And in the opposite direction, formality, the one in which jobs with social benefits are generated, loses ground.

In other words, two years of economic recession, the confinement due to Covid-19, the lack of government support for companies and the rebound in economic growth, are being reflected in more employment, but in informality.

Despite the triumphalism in the speech celebrating the commemorative date – held in a totally different format from that of its predecessors, accompanied only by members of his government and in front of workers from the Dos Bocas Refinery – in which the Chief Executive praised which represents its main achievement in labor matters: raising the minimum wage by 70%.

The truth is that in terms of employment there is no room for presumption.

And as for the level wages maintain in times of high inflation like the one we are experiencing, it cannot be highlighted much either. The commemoration of Labor Day was preceded by the hard figures on employment released by the National Institute of Statistics and Geography (Inegi).

These revealed that half a million jobs were created in March. From the outset the news even sounds spectacular.

However, the negative profile of the same information is that this number of jobs were created informally.

In other words, all the jobs created are informal and with excessive working hours. These are jobs without any kind of social benefit. Informality gained ground over formality.

According to information released by reporter Gerardo Hernández of El Economista, the labor market added 566,504 people to the employed population in March.

Compared to the figures reported by the Mexican Institute of Social Security (IMSS), the contrast marks a notable difference.

According to the IMSS, which registers formal jobs, 64,566 new jobs were created in March.

And in the quarterly figures, the figures are even more remarkable.

For the first quarter of the current year, the formal sector lost 404 thousand 778 jobs and the informal sector added 971 thousand 282 people; thus, the balance of the recovery focused on the informal economy.

Not only did jobs in the informal sector grow more.

In March, 1.1 million people joined the population that works more than 48 hours a week, above the legal limit established in the legislation.

In summary, what the Enoe and the IMSS figures show is that employment in the informal sector grew; formal employment decreased, and the number of hours employees work increased beyond what the law allows.

This is indeed an increase in employment, but it is not necessarily the employment that reflects an improvement in the formal economy.

And although the increase in the minimum wage is a reality, the truth is that those who receive that level of remuneration are a small segment of the total universe of workers.

In the context of weak growth; when most economic analysts anticipate much lower growth compared to the official forecast, and with a high level of inflation and forecasts that it will continue to rise, the deterioration of employment and the purchasing power of workers in Mexico is of concern.

glimpses

INFLATION.- The anti-inflationary program that the Mexican government will present this Wednesday, May 4, generates expectations, but above all uncertainty.

First, it generated doubts due to the possible price control originally leaked. Then it led to uncertainty because it is not possible to understand what “fair” prices or “guarantee” prices are about. The concertation scheme, in which the great captains of business and industry were first summoned, although later business organizations were added, also caused concern. And in parallel there is the question of whether it will have the desired anti-inflationary effect, when it is an imported inflationary phenomenon. Will it be more of a program that seeks to impact the media, rather than pragmatically? It is a question.

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