In Mexico, there are structural factors that cause the shortage of places in the labor market. Some causes of unemployment They were exacerbated by the pandemic, such as the power of informality, insufficient economic activity and the lack of labor incentives, which do not allow the generation of sufficient jobs to satisfy population growth, specialists agree.
“We have a burden of unemployment. We have an excess of unemployment for although economic activity is recovering, it has not yet recovered the level of economic activity that existed before the pandemic and on the other hand, although employment has recovered strongly, we are still continuing with a deficit ” , explains Marcelo Delajara, Director of the Economic Growth and Labor Market Program of the Espinosa Yglesias Study Center (CEEY).
What happened? It took the labor market 16 months to restore the level of employment it had before the pandemic. According to the National Survey of Occupation and Employment (ENOE), the working population reported 1.1 million more jobs at the end of 2021 than those observed in March 2020, the period before the initial effects of the health crisis.
However, while the market continued to recover, the potential working population also grew by 3 million people. “The labor market in the past year has not absorbed all the employment needed to provide for population growth,” says Marcelo Delajara.
Historically is one of the causes of unemployment it is the insufficient generation of jobs to satisfy the demand, it is observed more frequently in the creation of formal jobs.
“We have already returned to pre-pandemic occupancy levels. However, there are more people. We have not reached the trend (of job creation) that we had before. The recovery level is proportional to the population at the beginning of 2020, but we are already more. If there are the same jobs, there is more competition for each of them, ”says Jesús Carrillo, Director of Sustainable Economics at the Mexican Institute for Competitiveness (IMCO).
Another factor that explains the unemployment in mexico, the specialist adds, is the economic structure of the labor market itself, where the services sector still has activities that have not fully recovered, or are in a slow recovery process. In addition, the generation of new jobs was unequal between the states.
Seasonal factors that depend on business cycles are also a common reason why there are unemployment in mexico. For example, in the formal sector in December, there is a reduction in the workforce due to the dismissal of temporary staff appointed for the year-end period.
According to the ENOE, there are 4.1 million people actively seeking work in our country, which implies 592 757 more than those who were in this state before the pandemic.
The absence of unemployment benefits
It took almost two years for the labor market to return to the unemployment levels it had before the impact of the health emergency. Throughout 2021 over seven months, the unemployment rate it was above 4%, says Gabriela Siller, director of economic and financial analysis at Banco Base. From the perspective of the specialist, the lack of unemployment benefits and employment protection has generated a slower and more uncertain recovery.
“The truth was that support was needed. 65% of the jobs created during the year were informal. A countercyclical fiscal policy could have been implemented, diverting government spending to make it more productive. The fact that there is a balance of government finances does not mean that spending is carried out efficiently. Public spending can create more jobs, ”said Gabriela Siller.
According to the Economic Commission for Latin America and the Caribbean (ECLAC), during the pandemic, Mexico adopted only remote employment and the ban on retrenchments as a policy to protect employment. This makes the country one of the lowest economies in the region employment protection policies.
But there were no support measures such as those implemented in other Latin American countries, such as payroll subsidies or unemployment insurance, or the hiring of support policies such as subsidies for the return of workers to companies.
This absence of unemployment benefits and the complex panorama of getting a job explains to a large extent that in 2021 almost 2 million people will have a unemployment retirement of his predecessor, a historical figure.
Reference-www.eleconomista.com.mx