Introduction
Since the onset of the COVID-19 pandemic, Mexico has experienced significant job losses. However, August 2023 saw an unprecedented mass loss of 1.3 million jobs, primarily affecting the informal sector and women.
Recent Job Losses in Context
According to the National Employment and Occupation Survey (ENOE) by Mexico’s National Institute of Statistics and Geography (Inegi), August 2023 witnessed a staggering loss of 1.3 million jobs, predominantly in the informal sector and among women.
This massive job loss in a single month is reminiscent of January 2022, when the Mexican economy lost 1.4 million jobs amidst pandemic aftermaths. The government’s response, including the announcement of a new round of the “Jóvenes Construyendo el Futuro” (Youth Building the Future) program, is anticipated to provide further context.
Structural Issues in Mexico’s Labor Market
Beyond the recent job losses, Mexico’s labor market faces structural challenges. One prominent issue is the high level of informality, which has long plagued the market.
Inegi’s data indicates that 61.3 million people are part of the economically active population, with 54.8% engaged in informal labor. This equates to approximately 33.6 million individuals who do not contribute to direct taxes and lack access to social security.
Informal employment acts as a safety net during economic downturns, but it quickly evaporates when activity slows, leaving millions vulnerable.
Población No Económicamente Activa (PNEA)
Another crucial indicator is the Población No Económicamente Activa (PNEA), comprising individuals available for work but not actively seeking employment. As of August 2023, over 5.5 million people fell into this category, requiring income despite not searching for jobs.
Tasa de Condiciones Críticas de Ocupación (TCCO)
The Tasa de Condiciones Críticas de Ocupación (TCCO) measures the precarious conditions of employment, including low wages, long working hours exceeding 48 hours, or reduced work schedules. Approximately one-third of Mexico’s labor force falls under these conditions.
Unemployment Rates: A Mixed Picture
Mexico’s official unemployment rate stands at 2.9%, placing it favorably compared to countries like Germany or the OECD average. However, this rate masks the informality and precarity inherent in Mexico’s labor market.
A more accurate representation is the subemployment rate, which captures those employed but requiring additional income. This figure stands at 7.1%, offering a clearer picture of Mexico’s labor market situation.
Key Questions and Answers
- What recent job losses have occurred in Mexico? In August 2023, Mexico experienced a massive loss of 1.3 million jobs, primarily affecting the informal sector and women.
- How does Mexico’s unemployment rate compare internationally? Mexico’s official unemployment rate is 2.9%, placing it favorably compared to countries like Germany or the OECD average.
- What are the structural issues in Mexico’s labor market? High informality, a large PNEA, and precarious working conditions are significant challenges.
- What alternative measures provide a clearer picture of Mexico’s labor market? The subemployment rate offers a more accurate representation than the official unemployment rate.
