Introduction
As the Mexican federal government promotes a labor reform to reduce working hours, restaurant industry leaders express concerns that the unique dynamics of their sector have not been considered.
Background on the Mexican Restaurant Industry
Mexico’s restaurant industry is a significant employer, with over 730,000 establishments nationwide and more than 65,000 in Mexico City alone. This industry supports millions of jobs, many held by women and young people.
Structural Issues in the Sector
Despite its importance, the sector faces structural problems exacerbated by high turnover rates, staff shortages, and increased economic pressure due to recent labor law changes, salary increases, and social reforms.
Restaurant Leaders’ Perspective
Jack Sourasky, president of the Canirac Ciudad de México, argues that the government’s proposal lacks understanding of the operational and cultural model of restaurants, where variable income and tips form a significant portion of workers’ real wages.
- Concern: Reducing working hours will force restaurants to hire more employees to cover shifts.
- Worker Preference: Many employees prefer extended hours to boost their income. Reducing hours would negatively impact their real earnings.
Sourasky also highlights the high turnover rate in operational roles such as waiters, kitchen assistants, and cooks. He laments the lack of job loyalty and permanence among young workers.
Official Stance: Necessary Reform
Marath Bolaños, the Secretary of Labor, insists that reducing the standard 45-hour workweek to 40 hours is both viable and necessary for improving workers’ quality of life.
- Government Position: The reform will proceed gradually towards a five-day workweek with two days of rest.
Eduardo Mercado Peña, a consultant from CONGAHIN Gastronomy and Hotel Consultancy Integral, agrees that the reform comes at a critical time. He explains that labor cost structures have already been affected by minimum wage increases, additional vacation days, and rising social security payments.
- Labor Cost Impact: The average labor cost has increased by 30% to 35% in recent years, and profit margins have decreased. For example, if a business previously operated at 25% labor cost, it now stands at 19%. If the margin was 15%, it could be as low as 12%.
Mercado Peña warns that the reduced workweek will necessitate hiring more staff, but in a labor-scarce environment, many restaurant owners cannot meet this demand. Additionally, passing all cost increases to customers would reduce their competitiveness.
Lack of Restaurant-Specific Analysis
Both Sourasky and Mercado emphasize that the labor proposal lacks a specific analysis of the restaurant sector, which operates under unique conditions: high turnover, mixed incomes, fragmented shifts, and reliance on continuous customer flow.
Implementing a reduced workweek without addressing these factors could lead to price hikes, layoffs, or business closures.
Key Questions and Answers
- Question: What are the concerns of restaurant industry leaders regarding the proposed labor reform?
- Question: How has the labor cost structure been affected in the Mexican restaurant sector?
- Question: Why do many restaurant workers prefer extended working hours?
Answer: Leaders worry that reducing working hours will force restaurants to hire more employees, potentially leading to price increases, layoffs, or business closures if not managed properly.
Answer: Labor costs have increased by 30% to 35% in recent years, and profit margins have decreased. This is due to minimum wage increases, additional vacation days, and rising social security payments.
Answer: Many employees aim to maximize their income through tips by working more hours. They often prefer additional work hours over fewer hours and less opportunity for tips.
