Introduction
In Mexico, the quest for a more humane workweek has reached a new peak. During Labor Day commemoration, President Claudia Sheinbaum announced the start of dialogues to reduce the workweek from 48 to 40 hours. This announcement resonates strongly in a nation where extended work hours are the norm, with two-thirds of workers exceeding 40 hours weekly and one in four surpassing the legal limit of 48 hours, according to OECD data. Ironically, as Santiago Levy points out, this intense labor activity does not translate into high productivity, placing Mexico near the bottom of OECD countries in this area.
Background and Current Scenario
The federal government aims to achieve a 40-hour workweek gradually by 2030 through dialogue involving employers, unions, and workers. However, the ability to absorb these changes varies greatly between large corporations and small and medium-sized enterprises (SMEs).
Concerns from the Business Sector
The Mexican business sector, represented by the Confederation of Employers of the Mexican Republic (COPARMEX), has expressed concern due to a slowing economy, decreased investment, and low job creation. They argue that now is not the right time for uniform implementation of this reform and advocate for measures to enhance Mexico’s attractiveness as an investment destination. COPARMEX proposes greater flexibility in the scheme and sectorial and size-based exceptions to account for the diversity of Mexico’s business landscape, where SMEs constitute a significant portion and often operate with narrower margins.
Previous Attempts and Current Status
The proposal to reduce work hours is not new in Mexico. In October 2022, a similar initiative presented to the Chamber of Deputies failed to advance. Now, under the new administration, the debate is reignited with a promise of inclusive dialogue. Mexico joins a trend in South America, where countries like Chile and Colombia are implementing or discussing similar gradual reductions. However, the implementation of this measure in Mexico might extend until 2027 or 2028, depending on the agreements reached in dialogue sessions.
Current Legislation and Challenges
Mexican legislation currently sets a maximum of 48 working hours per week, though many workers exceed this figure without employer sanctions. Reducing to 40 hours would mandate two days of rest per week, a point of resistance for some employers due to potential increased labor costs if additional staff is needed to cover shifts. For instance, in the retail sector, which currently employs a fifth of the economically active population, this could lead to higher labor costs.
Impact on Workers and the Informal Sector
Mexico stands out in the OECD for having one of the longest workweeks, surpassing countries like Costa Rica, Chile, and Israel. This reality contrasts with the antiquity of its regulatory framework, which has not undergone substantial changes since 1917, highlighting the urgency for labor reform. If approved, the reduction in work hours would primarily benefit formal workers; however, many already work beyond the current legal limit, according to IMCO data. The reform wouldn’t reach millions of informal or self-employed workers, who often face even longer work hours. This demonstrates that while necessary, the measure is merely a first step towards ensuring fairer working conditions.
Preparing for the Transition
Transitioning to a 40-hour workweek in Mexico requires political will, agreements, investment, operational adjustments, and a cultural shift in the perception of work. Moreover, this promise of well-being comes amidst economic slowdown and fiscal pressures, adding complexity to implementation. For SMEs, limited access to credit and technology might further complicate adopting these changes.
Key Questions and Answers
- What is the government’s goal? The federal government aims to achieve a 40-hour workweek gradually by 2030 through dialogue involving employers, unions, and workers.
- What are the concerns of the business sector? The Mexican business sector, represented by COPARMEX, is concerned about a slowing economy, decreased investment, and low job creation. They advocate for measures to enhance Mexico’s attractiveness as an investment destination and propose greater flexibility in the scheme with sectorial and size-based exceptions.
- What challenges does the current legislation pose? Current Mexican legislation sets a maximum of 48 working hours per week, though many workers exceed this figure. Reducing to 40 hours would mandate two days of rest per week, a point of resistance for some employers due to potential increased labor costs.
- Who would benefit from the reform? The reduction in work hours would primarily benefit formal workers. However, many already work beyond the current legal limit, and the informal or self-employed sector, facing even longer work hours, wouldn’t be covered.
- What are the key considerations for a successful transition? Transitioning to a 40-hour workweek in Mexico requires political will, agreements, investment, operational adjustments, and a cultural shift in the perception of work. It also necessitates addressing SMEs’ limited access to credit and technology for successful implementation.
