Who is Coparmex?
Coparmex, or the Confederation of Mexican Employers’ Organizations, is a prominent business organization representing private sector employers in Mexico. It aims to promote economic development, social progress, and improve the quality of life for Mexican families.
The Context and Relevance of the Proposal
Juan José Sierra, president of Coparmex, recently called for a temporary halt in the implementation of reducing work hours from 48 to 40 per week. This proposal stems from concerns about the potential impact on formal employment and the economy, especially given signs of a possible recession.
Why is this relevant?
- More than 13.4 million people work over 40 hours weekly, with more than half employed in micro, small, and medium-sized enterprises (MSEs).
- 95% of Mexico’s business fabric consists of MSEs, making it crucial to consider their unique structural realities when implementing labor reforms.
- The proposed reform aims to be voted on in September by the Mexican Congress following consultation forums.
Coparmex’s Position: Balanced and Evidence-Based
Sierra emphasized that Coparmex’s stance is not against the reduction of work hours but rather advocates for a well-planned, evidence-based implementation tailored to different sectors.
Key points from Sierra’s statement:
- Coparmex supports the reduction of work hours but insists on a measured, ordered approach that safeguards formal employment.
- The organization proposes a flexible mechanism to respond to drastic changes in the economic environment, including temporary pauses or adjustments if necessary.
- A phased implementation with periodic reviews by a tripartite committee of government, labor, and business representatives is suggested.
Fiscal Support for MSEs
Sierra urged for concrete fiscal support measures for MSEs, which generate 65% of employment in Mexico. He proposed:
- Full tax deductibility of labor benefits.
- Review of the Income Tax (ISR) and employment subsidies to prevent income loss or informality.
- Ensuring no one loses income or formal status during the transition, allowing for growth without exclusion or disruption of successful practices.
Key Questions and Answers
- What is Coparmex’s main concern? Coparmex is worried about the potential negative impact on formal employment and the economy, particularly if a recession occurs.
- What does Coparmex propose? Coparmex advocates for a phased, evidence-based implementation of the work hour reduction, with flexible mechanisms to respond to economic changes and periodic reviews by a tripartite committee.
- What fiscal support measures does Coparmex suggest? Coparmex proposes full tax deductibility of labor benefits, review of the Income Tax (ISR), and employment subsidies to prevent income loss or informality during the transition.
