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News Article

35 million Mexican Workers Receive Precarious Wages

By Rodrigo Brugada | Mon, 07/19/2021 - 16:15

Less than one-fifth of employed people in Mexico have a decent job, defined as one that provides a living wage and benefits, according to the NGO Accion Ciudadana Frente a la Pobreza. Also, approximately 35 million people who are working do not have a sufficient wage nor social security.

Mexico has almost 75 million people of working age and able to work (not counting students, pensioners and people with serious disabilities), of which only 50 million are employed, warns the NGO. It developed an instrument to evaluate employees’ labor situation, based on official data from INEGI, called Semaforo de Trabajo Digno (Decent Work Stoplight). This tool disaggregates people according to their labor status, with three main groups.

The first group comprises people excluded from work, meaning those who are unemployed or unavailable to join the labor force because they are doing domestic or care work. This first category comprises 24.6 million people, of whom 15.2 million do not have access to other types of work because they are in charge of care or household chores. It is worth mentioning that 95 percent of this group are women working in typically unpaid jobs.

The second category includes employed people who find themselves in a precarious labor condition because they lack sufficient income to cover the family basket (equivalent to two basic baskets) or do not have social security. The majority of workers were found in this category, reaching a number of around 35.26 million people or 70 percent of the employed population.

The third category includes people with social security and a labor income higher than two basic baskets: a salary of MX$7,500 (US$377) per month. Only 8.96 million people were counted in this category, or 17.8 percent of the employed population.

This vicious circle of precarious work begins with the system's limited capacity to generate formal jobs with sufficient wages and social security. It affects the growth of the economy, the size of the domestic market, tax collection capacity, human rights and poverty and inequality in the country. Since the end of the last century, wages have been held back and subcontracting practices, corrupt unionism and a social security scheme that conditions the right to health care to labor benefits have been allowed, making them more expensive and excluding most of the population.

Moreover, macroeconomic policies have been unilaterally oriented to control inflation, thus neglecting the sustained growth of the national product and employment, dismantling labor protection warranties and maintaining an institutional wage policy contrary to workers, according to Politica y Cultura.

These policies take on greater relevance in the context of the economic crisis caused by the pandemic. Last year Mexico saw poverty increase by 12 million people, 3 million more lost their jobs, 2.6 million became underemployed and 2.3 million jobs with sufficient income were lost. Likewise, inflation is 2.6 percentage points above January 2020.

To remedy this situation and guarantee decent work for the population, Accion Ciudadana Frente a la Pobreza recommended increasing the minimum wage until it is above the cost of two basic food baskets and favoring unions who defend workers' rights, the legitimization of collective bargaining agreements, and the eradication of outsourcing. The NGO also recommended strengthening support for the training and employment of young people, promoting the adoption of new labor standards in companies, establishing decent work as the only legal form of contracting, and eliminating incentives for informality by overcoming the dependence of the right to health on labor benefits. It also urged the creation of a national care system that will facilitate the entrance to the workforce for millions of women.

The data used in this article was sourced from:  
Frente a la Pobreza, Política y Cultura, BANXICO
Rodrigo Brugada Rodrigo Brugada Journalist & Industry Analyst