The unspoken crisis

It is a crisis that is not talked about in the official discourse.

It is a crisis suffered by millions of Mexicans with different faces: unemployment, informality, debts and famine.

It is a crisis suffered by the poorest Mexicans in the country.

They are affected in their personal and family economy, due to the impact that Covid-19 represented; by the high and growing inflation and the lack of economic growth in the country and implicitly the lack of opportunities.

In Coneval’s evaluation of the effects that the crisis produced by Covid-19 would have on poverty, it speaks of effects similar to the global financial crisis of 2008 and even similar to those of the Great Depression of 1929.

In his forecast –prepared 17 months after the current government began–, he anticipated that 1.7 million jobs could be lost, including an approximate 41% associated with the formal sector, which implied that 700,000 people who worked in the formal economy , they would no longer have social security.

It also projected in two scenarios a general fall in income and the most pronounced fall in income for households in urban poverty.

Those were the projections. The facts show that the forecasts were fulfilled in what corresponds to the destruction of employment and the increase in informality and poverty.

In the third year of the current government, the informal economy was strengthened as the basis of economic recovery.

As of March of this year 2022, half a million jobs were created. Virtually all of that amount was created informally.

According to the latest IMSS figures, as of March, 64,566 new formal jobs were created.

In the first quarter of this year, 404 thousand 778 jobs were lost in the formal activity and 971 thousand 282 people were added to the informal sector.

On the other hand, the effects on the pockets of individuals and families are distressing.

Yesterday the Inegi released the National Survey of Financial Inclusion (Enif) 2021; the data is worrying.

The Covid-19 pandemic affected the financial health of 49 million Mexicans and 65% have not yet recovered.

Almost 60% (58.4%) of the population between 18 and 70 years old had some economic impact derived from the health contingency.

90% of those affected had a reduction in what they earn; 43.5% had health or funeral expenses and 39.6% lost their job or their source of income.

To face the pandemic, 40% borrowed from relatives or acquaintances; 79.9% used the money they had saved; 95.3% reduced their expenses, and 18.6% sold or pawned some good.

A large number of Mexicans were forced to use their credit card for their expenses or requested new loans; others were late in the payment of their bank credits and others took the extension of their bank to make the payments.

Nearly 40% worked overtime, took temporary work, or asked for advance pay.

On the other hand, the IMCO released an analysis in which it highlights that Mexicans with less income are the most affected by inflation.

Those who register an average income of 3 thousand 313 pesos per month suffer from an inflation of 8.74% in the price of their basic food basket and not the general inflation of 7.68%.

On the other hand, individuals and families with incomes of 54,427 pesos per month register an inflation of 7.48% in their consumption basket.

The difference is explained because those who have less dedicate more resources to basic products.

glimpses

BANKING SECRECY.- Treasury and specifically the SAT may review bank accounts to monitor and fiscally supervise taxpayers, without trial involved. The First Chamber of the Supreme Court of Justice of the Nation determined that article 142, section IV, of the Credit Institutions Law is not arbitrary, disproportionate, nor does it violate the right to private life, by allowing the federal tax authorities to require information for tax purposes related to bank secrecy, without judicial authorization.

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