CONEVAL Recommends Unemployment Insurance, More Inspections

The National Council for the Evaluation of Social Development Policy (CONEVAL) highlighted the need to improve and increase the mechanisms that help protect the rights of workers and promote the transition to the formal job market through the Federation Expenditure Budget (PEF) 2023.

At the beginning of the new period in Congress, which starts this September, the Chamber of Deputies will focus on the PEF for 2023. For this reason, CONEVAL presented the report Considerations for the 2023 Budget Process, which insists on the importance of unemployment insurances, incentives for companies and labor market formalization programs, among other points, to advance Mexico’s social development.

The document contains proposals for nine areas: economic wellbeing, nutrition and quality food, education, health, dignified and decent housing, social security, work, a healthy environment and equality. To this end, it analyzed 120 programs and actions of the federal government in 2022.

In the labor environment, CONEVAL pointed out that tax incentives are necessary to raise the productivity of small and medium-sized enterprises (SMEs), as well as credit to enable their growth. The productivity of SMEs is considered essential because they are Mexico’s largest employers. The council also recommends introducing affirmative actions that strengthen the position of women in businesses.

The latest Study on the Demographics of Businesses, published December 2021, indicates that in that year, 1.2 million companies emerged and 1.6 million closed their doors. On average, each business that closed had 2.45 people employed. In July 2022, 56 percent of the employed population was working in the informal market, according to the National Survey of Occupation and Employment (ENOE). Therefore, CONEVAL points out that the labor formalization strategy must include specific measures for the most affected groups, such as speakers of Indigenous languages, people with disabilities, agricultural day laborers and paid domestic workers, among others.

Those who work in the informal sector generally do not have a written contract, nor can they access the minimum benefits that the Federal Labor Law (LFT) marks as mandatory. Mexico’s Social security is closely linked to formal employment. CONEVAL also pushes for a universal social protection system for this reason, which adds value for any person living in Mexico, focuses on human rights, is in tune with the differences between population groups and aims to reduce inequality.

CONEVAL emphasized that it is essential to eradicate child labor. Mexico ranks second on the continent regarding the amount of children and adolescents working, only surpassed by Brazil. When the COVID-19 pandemic began, more than 3.3 million minors were working, the vast majority in dangerous jobs for their age. This figure has likely risen to 3.5 million, since the International Labor Organization (ILO) estimates that for every percentage point that poverty increases, child labor increases by 0.7 percent.