Background on Concamin and Industry Relevance
The Confederation of Industrial Chambers (Concamin) is a prominent organization representing various industries in Mexico. It plays a crucial role in advocating for policies that support and protect the interests of its member industries. The textile, clothing, and footwear sectors are vital components of Mexico’s manufacturing industry, contributing significantly to employment and economic growth.
Current Challenges Facing the Industries
Despite protective tariff measures and efforts to combat undervaluation of imports, the textile, clothing, and footwear industries continue to face severe challenges. According to Concamin, these sectors have experienced payroll reductions of up to 30% this year due to smuggling, undervaluation of imports, and economic uncertainty.
Impact on Employment
- Job Losses: Manuel Espinoza, president of the Customs Commission at Concamin and a textile industry professional, confirmed that the industry has shown very serious signs, with 200,000 jobs lost in the last seven quarters.
- Formal to Informal Employment Shift: Due to layoffs, approximately 200,000 formal workers have transitioned to the informal sector. This shift means that social security, Infonavit, and other benefits are no longer being paid.
- Footwear Industry: The formal employment in the footwear sector has decreased by 30% since September 2023.
Government Measures and Their Effectiveness
The federal government implemented tariffs on imported products from Asia starting this year. However, these measures have not been effective in curbing smuggling. Mauricio Battaglia Velázquez, president of Concamin’s Commission for Defense of Legality and former calzado industry leader, stated that 23% of Mexico’s footwear consumption comes from some form of smuggling.
Broader Consequences for Mexico’s Manufacturing Sector
The closure of companies affects not only the jobs lost by the factory but also the entire production chain in the country. This is evident in both textile and footwear industries, which are interconnected from agriculture to manufacturing.
Regional Impact
In Guanajuato, 25,000 jobs have been lost in the footwear industry since late 2023, with an estimated total loss of 50,000 jobs nationwide. The former president of the Guanajuato Footwear Industry Chamber (CICEG) highlighted paralysis and closures in both manufacturing and supply chain segments, including tanneries.
Historical Context and Current Situation
According to the Mexican Institute of Geography and Statistics (Inegi), the manufacturing industries of textile inputs, clothing production, non-clothing parts, leather, and hide have been hit hardest in terms of employment. The labor weakness extends beyond 2023, with textile input industry wages being 29% lower than in May 2019, before the Covid-19 pandemic.
- Textile Industry: Wages have decreased by 29% compared to pre-pandemic levels.
- Clothing Industry: Wages have dropped by 21.5%.
- Leather and Hide Industry: Wages have declined by 18.3%.
Key Questions and Answers
- What is Concamin? The Confederation of Industrial Chambers (Concamin) is a significant organization in Mexico that represents various industries, advocating for policies supporting their interests.
- What challenges are the textile, clothing, and footwear industries facing? These sectors are grappling with smuggling, undervaluation of imports, and economic uncertainty, leading to payroll cuts of up to 30%.
- How effective have government measures been? Tariffs on imported products from Asia have not curbed smuggling, with 23% of Mexico’s footwear consumption coming from some form of smuggling.
- What are the broader consequences for Mexico’s manufacturing sector? Company closures affect not only the jobs lost by the factory but also the entire production chain in the country.
- What is the regional impact in Guanajuato? Approximately 25,000 jobs have been lost in Guanajuato’s footwear industry since late 2023, with an estimated total loss of 50,000 jobs nationwide.
- How have these industries been affected historically? According to Inegi, textile input, clothing production, non-clothing parts, leather, and hide industries have experienced significant wage reductions since before the Covid-19 pandemic.
