A Land of Bootstraps

The International Labor Organization has now classified Mexico as having the highest rate of informal employment in Latin America.

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(LAS CRUCES, NM) - In his last months in office, recently-departed Mexican President Felipe Calderon repeatedly touted Mexico’s low unemployment rate among member nations of the Organization for Economic Cooperation and Development. But a new analysis by the Mexican Institute of Statistics, Geography and Informatics (Inegi) reports that six out of ten Mexican workers are employed in precarious circumstances- meaning they lack contracts, benefits or retirement plans.

Utilizing an expanded definition of informal employment, the country’s official research institute included domestic help, agricultural sector workers and anyone not covered by the Mexican Social Security Institute system. Of 48.7 million persons employed in Mexico, 29.3 million toil away in an informal way, according to the Inegi.

The National Confederation of Chambers of Commerce, Services and Tourism called the new numbers “alarming.”

Perhaps not surprisingly, the Inegi study identified the highest proportion of informal employment in the impoverished, southern states of Chiapas, Oaxaca and Guerrero, where the informal workforce constituted anywhere between 76.8 percent and 80.8 percent of the overall labor force. The entities with the lowest percentage of informal employment were the northern states of Nuevo Leon, Chihuahua and Baja California Sur. Still, informal employment made up 40 percent of overall employment in the more developed northern states.

The northern border city of Ciudad Juarez, Chihuahua, is one place where the expansion of the informal sector is readily visible.

Raul Monterrosa Montoya, director of the city’s commerce department, estimated that informal employment leaped 40 percent in 2012, in comparison with 2010 and 2011. A certain pick-up in more established economic activities like the maquiladora export sector this year stimulated the informal sector, as more people joined the rush to get a piece of the bigger cash flow in the city, Monterrosa said.

According to the municipal official. Ciudad Juarez now has 23,086 informal vendors alone registered on its rolls. “We know and understand that people have to make a living from something; how nice it is that they do it in a legal manner.” Monterrosa said. “But they should be legal and comply with their obligations. We can’t allow unfair competition or affect the little tourism there is in the city. Everything must be regulated.”

Returning Mexican nationals from the United States, whose ranks grew from stepped-up deportations and voluntary repatriations due to job less during the past five years, constitute one group which has found a means of survival in the informal employment sector.

In a report released some months prior to the more recent Inegi study, the BBVA Bancomer Foundation found that 34.8 percent of returnee workers were employed in the informal sector. Although 90.8 percent of returnees procured work within six months, two-thirds of the group examined earned on a daily basis only the equivalent of two minimum wage salaries, or roughly ten bucks, according to the migration research outfit.

The BBVA Bancomer Foundation also noted that returning migrants have been short-changed twice, with only 17.5 percent currently working in jobs covered by social security.

“Many of the migrants who worked in other countries have been undocumented,” the report’s authors wrote. “They paid taxes even as undocumented but don’t have the right to all the services of social security, and when coming back do it without pensions and, as the data reveal, without benefits.”

The Inegi study captured international attention. The International Labor Organization has now classified Mexico as having the highest rate of informal employment in Latin America and the Caribbean, with an informal workforce of 60 percent well above the hemispheric average of 47 percent.

Sources:

• La Jornada, December 19, 2012. Article by Patricia Munoz Rios.
• Nortedigital.com, December 17, 2012. Article by Beatriz Corral Iglesias.
• Proceso/Apro, December 11 and 12, 2012. Article by Juan Carlos Cruz Vargas.
• El Semanario de Nuevo Mexico, July 26, 2012.

Frontera NorteSur: on-line, U.S.-Mexico border news
Center for Latin American and Border Studies
New Mexico State University
Las Cruces, New Mexico