Introduction
On May 1st, Mexico’s federal labor secretary announced the implementation of a 40-hour workweek, to be rolled out gradually by 2030. This move would place Mexico among 27 countries, including Suecia, South Korea, and Spain, that have already adopted this practice.
Global Working Hours Context
According to the International Labour Organization (ILO), globally, people work an average of 43.7 hours per week, with 28% working up to 49 hours. In Mexico, despite the push for a shorter workweek, employees already dedicate substantial hours to their jobs.
Productivity: Mexico’s Achilles’ Heel
Implementing a 40-hour workweek requires addressing productivity, which is the economic value generated per hour of work. Mexico lags behind other Organisation for Economic Co-operation and Development (OECD) countries in productivity, with each hour generating an estimated $24.9.
- Question: What is the current productivity level in Mexico?
- Answer: Mexico’s productivity is significantly lower than the OECD average of $72.64 per hour, and even less compared to Ireland’s $149.3 per hour.
If Mexico maintains its current productivity level during the transition to a 40-hour workweek, the weekly economic value would drop from $1,195 (for 48 hours) to only $996. To maintain the overall productivity level, hourly productivity would need to increase by 20% to $29.8.
However, Mexico’s productivity growth has only been 9% in the past five years, while OECD countries saw an average increase of 15%. This slow progress poses a challenge for both employers and the economy.
Formalizing Informal Employment
The 40-hour workweek initiative, while well-intentioned, is more of a political statement than a labor problem solution. A significant issue in Mexico is the high percentage of informal employment, with 54.3% of the working population lacking legal protections such as social security and vacation bonuses.
- Question: Who would benefit from the 40-hour workweek implementation?
- Answer: Only formal employees working more than the average 43 hours would benefit from this change.
Breaking down the 54.3% informal employment reveals that 27.8% work in the informal sector, 13.5% in companies, government, and institutions, 9% in agriculture, and 3.9% in remunerated domestic work. Thus, the 40-hour workweek would primarily benefit formal employees.
Exploring Opportunities
As the implementation of a 40-hour workweek is still years away, it’s essential to engage in discussions about leveraging new technologies like artificial intelligence. These conversations can help shape a beneficial workweek model for both employees and employers, ultimately contributing to Mexico’s economic growth.
