Image credits: Niek Verlaan
News Article

COVID-19 Cases and Unemployment Take Crisis to a New Level

By Cas Biekmann | Thu, 04/16/2020 - 18:00

COVID-19 causes widespread unemployment in Mexico, pushing the crisis to new levels. Hugo López-Gatell announced that companies that do not stop their activities will be penalized and could even be shut down. Furthermore, only 22 percent of Mexicans have the privilege to work from home.

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Increased COVID-19 Cases and Unemployment

According to numbers presented by Hugo López-Gatell, Deputy Minister of Prevention and Health instead of the 3,181 confirmed cases, there could be close to 26,519 people infected with COVID-19 in Mexico.  

With a population of 129 million and 20,421,442 formal jobs at the end of 2019, IMSS reports that Mexico lost 364,878 jobs between March 13 and April 6. This represents a 1.8 percent drop in formal employment. These numbers do not consider the economic impact on the nearly 60 percent of the Mexican working population who are part of what is described as the informal economy. The much-criticized economic recovery plan announced by President López Obrador last Sunday included a commitment to creating 2 million jobs before the end of the year without providing details on how this would be achieved.


Mexico City Watches Over Worker’s Rights

Mexico City’s local government and NGOs are working to supervise companies’ actions amid the COVID-19 pandemic. This unprecedented situation has led to unanticipated reactions from the private sector. To protect the city’s workers, several entities are working to increase labor protection.

The Council to Prevent and Eliminate Discrimination (COPRED) has received 12 complaints since Mexico City declared the COVID-19 pandemic a health emergency. Complaints came from elderly people or people with an illness, who were pressured by companies to show up to work despite their health concerns.

Mexico City Mayor Claudia Sheinbaum announced that there would be investigations, following a report by IMSS indicating that between March 13 and April 6, nearly 56,000 people had lost their jobs. Sheinbaum said if mass layoffs in a large company were detected, this company would not be allowed to open up further offices in the future.


Stay at Home - Only 22 Percent of Mexicans Have That Privilege

The University of Chicago researched the definition of what home office implies and came to the conclusion that several segments of the population cannot work from home. These include workers that perform essential jobs, as well as those who are not allowed to not go to their workplace and those who need the day’s wage to survive. Deputy Governor of Banco de México Gerardo Esquivel agrees: “The poorer the country, the fewer jobs that can be done from home,” he tweeted. People that work from home usually have higher paid jobs that can be done from another place to begin with. In Mexico, only 22 percent of workers have this privilege.


Companies Not Closing Down Due to COVID-19 Could Be Forced To

Companies that refuse to stop their activities as requested by the government in the face of the health emergency by COVID-19 could be sanctioned and even closed, reported Hugo López-Gatell Deputy Minister of Prevention and Health Promotion. Gatell added that at least 15 percent of companies that should have closed their doors have not done it so far.

The data used in this article was sourced from:  
El Economista, El Universal
Photo by:   Niek Verlaan
Cas Biekmann Cas Biekmann Journalist and Industry Analyst