Addressing a Complex Labor Landscape with Incentives for SMEs
Guadalajara, Jalisco. To tackle a complex labor scenario exacerbated by factors such as labor reforms and informality, the Jalisco state government and the Hacienda Commission of the local Congress have introduced a $60 million fund in incentives for businesses across the state, primarily targeting micro, small, and medium-sized enterprises (Mipymes).
Gabriela Cárdenas: Strengthening Mipymes for Formal Job Creation
Gabriela Cárdenas, president of the Hacienda Commission in the Congress, explained that this fund was established under the coordination of Economic Development to encourage formal employment in Jalisco. “Our proposed guidelines for this initiative aim to bolster Mipymes, as they currently generate seven out of ten formal jobs. We need to support their continued creation of formal employment opportunities,” she stated.
Mauro Garza: Incentive Structure Based on Company Size
Mauro Garza, Coordinator of Economic Growth and Development in the State, elaborated on the “Crecer al Estilo Jalisco” program. It offers incentives ranging from 300,000 pesos for microenterprises with one to ten employees; 1 million pesos for small enterprises with 11 to 50 workers; 2.5 million pesos for medium-sized enterprises with 51 to 250 employees; and 5 million pesos for large enterprises with over 250 workers.
“The incentive amount will be determined based on the number of jobs created from September 2024 to August 2025,” Garza Marín clarified. “These incentives are for businesses hiring new employees and those sustainably growing formal employment. Additionally, companies hiring specialized talent to strengthen the ecosystem contributing to Jalisco’s growth will also be supported.”
Additional Incentive for Special Groups
Gabriela Cárdenas highlighted an extra 10% incentive for businesses hiring caregivers, elderly individuals, or people with disabilities.
Complex Labor Landscape
Ricardo Barbosa: Challenges for Mipymes Amidst High Informality
Ricardo Barbosa, head of the Secretariat of Labor and Social Prevision (STyPS), stated that labor reforms in Mexico, both implemented and pending, have complicated the business environment.
“Mipymes are the backbone of formal job creation in Jalisco and Mexico, yet they exist in a fragile ecosystem, balancing formal and informal status due to constant survival pressures,” Barbosa explained.
“We are among the 15 strongest economies globally, yet our informality rate is dismal; 55 out of every 100 economically active individuals rely on informal work. This figure is alarming,” he emphasized.
“Jalisco fares better than most states, with Chihuahua, Nuevo León, Querétaro, and Guanajuato, but our 45 out of 100 economically active individuals in informality is still concerning, not a figure to boast about in our administration,” Barbosa Ascensio admitted.
Principal Challenges
Barbosa warned of significant challenges facing entrepreneurs, especially Mipymes, including the imminent approval of reducing workweek hours from 48 to 40 and paternity leave days.
“In this new view of masculinity, paternity should be supported, but five days are insufficient. It’s about to increase to 20 days, which businesses will absorb…Once again, Mipymes lack the economic capacity to handle 20 days, let alone a potential future increase to 60 days within five or six years,” the official stressed.
Notably, Coparmex adjusted its expectation for Jalisco’s job creation this year from 45,000 to just 20,000 positions.
Key Questions and Answers
- What is the purpose of the $60 million fund? The fund aims to encourage formal job creation in Jalisco, primarily supporting micro, small, and medium-sized enterprises (Mipymes).
- How are incentives structured based on company size? Incentives range from 300,000 pesos for microenterprises with one to ten employees; 1 million pesos for small enterprises with 11 to 50 workers; 2.5 million pesos for medium-sized enterprises with 51 to 250 employees; and 5 million pesos for large enterprises with over 250 workers.
- What additional incentives are available? An extra 10% incentive is offered for businesses hiring caregivers, elderly individuals, or people with disabilities.
- What challenges does the labor landscape present? High informality rates, with 45 out of 100 economically active individuals in Jalisco working informally, pose significant challenges. Upcoming labor reforms, such as reducing workweek hours and expanding paternity leave, also present difficulties for businesses.
