Mexico, among the countries with the least employment protection measures in the pandemic

In varying proportions, the vast majority of the world’s countries adopted containment measures in response to the Covid-19 pandemic, these actions had an impact on labor markets and Latin America was one of the most affected regions. At the most critical moment, the policies had a general focus and sought to ensure that the greatest number of people conserve their labor linkl; in 2021 it moved towards measures to encourage hiring.

The new edition of the study by Employment situation in Latin America and the Caribbean of the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) analyzed the protection measures to the employment relationship and hiring subsidies implemented in the region. Mexico does not appear with shares in either of the two classifications.

These policies are important in a context in which the recovery of labor markets in Latin America has focused on lower-quality jobs.

“The need to shore up the process of creating jobs and, above all, formal employment after the negative effects of the health crisis is a crucial challenge for labor policies from Latin America and the Caribbean during the period of deconfinement and widespread vaccination, and beyond, ”the report highlights.

Between the support measures Analyzed by international organizations, payroll subsidies, unemployment insurance and reduction of working hours stand out, among other actions that qualify as policies to sustain employment. Argentina, Brazil, Chile, Colombia, Costa Rica, Paraguay, Peru, the Dominican Republic, Trinidad and Tobago and Uruguay are the economies that implemented this type of action.

In the case of Mexico, the only program of this type implemented of which there is a record was in the capital of the country due to the unemployment insurance the one available at the local level, which was expanded to benefit a greater number of people in the most critical moments of the suspension of economic activities due to the health emergency in 2020.

“Originally designed for periods of cyclical unemployment, These instruments have a more limited potential for systemic crises that produce high unemployment rates for long periods, such as the one that began to take shape with the COVID-19 “, it is specified in the document.

Meanwhile, hiring support policies or transit to occupation encompass measures such as subsidies for the return and hiring of workers, which have been observed in Argentina, the Bahamas, Chile, Colombia, Peru and Uruguay.

Mexico does not appear with any of the measures analyzed and the last category includes the most important policies in a context with greater progress in vaccination plans and greater openness to economic activities.

On ArgentinaFor example, the government implemented the “Te Sumo” program, aimed at promoting youth employment in small and medium-sized companies, which covers between 50% and 90% of the starting salary of the new young employee for 12 months. On Chile Through the “Línea Regresa” program, benefits were delivered to employers for each worker who had a suspended contract, granting higher amounts for women and young people between 18 and 24 years old.

“Not all the countries in the region have specific programs for incentivize new hires, which may be due both to budgetary restrictions and to weaknesses in the institutional framework necessary for its design and implementation. These aspects would also explain the relatively limited timing of the use of these instruments in the countries that implemented them ”, the document indicates.

The importance of subsidies

Globally, the most developed economies adopted hiring support policiesIn Australia, Latvia and the United Kingdom, for example, profits were even expanded. This transition was linked to the economic opening in the countries.

Both at the regional level and in the more developed countries, hiring subsidies incorporate design elements to reduce deadweight losses; that is, hiring that would have been carried out even without the program. During 2021 there was an increase in the adoption of these instruments.

“Hiring subsidies can be effective in providing (temporary) incentives for companies to hire unemployed workers and, when they are set as objectives, they can be profitable measures, even during the recovery phases ”, emphasized ECLAC and the ILO.

However, hiring subsidies are not a policy that alone guarantees the promotion of formal employment during the recovery of the labor market; these actions require support, such as the employment support services (counseling, career guidance, job placement, updating and improvement of skills) that help job seekers to find a vacancy.

These comprehensive actions are perhaps the reason why the salaried employment It has not evolved in the same way in all the countries that have this type of support, recognize international organizations.



Reference-www.eleconomista.com.mx

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