IMCO: Mexico Fails to Provide Ideal Working Conditions for Women

Mexico has failed to offer optimal working conditions needed to bolster greater female participation in the workforce. Failure to address existing shortcomings may curb the country’s economic recovery in the short term and hinder its economic potential in the long term.

“If Mexico were able to incorporate an additional 8.2 million women to the workforce by 2030, the country would have a GDP three times greater,” reads a paper by the Mexican Institute for Competitiveness (IMCO).

The Con Lupa de Género (With a Gender Magnifying Glass) study, evaluated state entities according to 18 indicators under three main guiding themes including women’s ability to enter the formal labor market, their long-term permanence and observed professional growth. Out of 100 possible points, the mean national average was 43 and none of the evaluated states provided the optimal working conditions needed by working women. Even the best performing states, Mexico City, Baja California Sur, Baja California, Colima and Nuevo Leon, averaged 47.18 points. On the other end of the spectrum, the lowest-performing states include Hidalgo, Guanajuato, Veracruz, Tlaxcala and Chiapas.

Underperformance relates to a negligence to address the gender pay gap, to provide equal opportunities in leadership roles and flexible policies compatible with the multiple responsibilities women assume, according to IMCO. These conditions have ultimately restricted female economic participation to 43.6 percent, which is “among the lowest of many emerging economies,” said McKinsey & Company in its One Aspiration. Two Realities report.

Mexico has one of the highest wage equity gaps, according to Statista. In 2020, working women made an average of MX$14,860(US$699) per quarter, 34.3 percent less than men, according to INEGI. Notably, this figure narrowed slightly because women managed to increase their earnings by 1.4 percent over the past three years while men saw a pay cut of 4.4 percent during the COVID-19 pandemic. Overall, these minimal gains are at risk if state economies fail to reincorporate the approximately 1.5 million women that got pushed out from the labor market during the pandemic .

In addition to the gender wage gap, women face further shortcomings when it comes to salaries, with childrearing being a significant variable to their expected earnings. Indigenous women who speak their native language earn the least, ranging between MX$7,391 (US$347) and MX$11,467 (US$5396) per month. Meanwhile, women with no children make less than those with one or two children, pocketing between MX$17,454 (US$820) and MX$16,067 (US$755). However, once after the third child, women’s wages take a nosedive, earning progressively less than MX12,594 (US$592), representing a 32.34 percent gap between them and the highest female earners.

One of the primary challenges states are being confronted with is retaining working women in the formal economy. This flies in the face of traditionalist social conventions, which have always played a role in pushing women towards homemaking roles, a trend that became especially pronounced during the pandemic as children stayed home from school and family members fell ill. As the pandemic dragged into its second year, INEGI reported that unemployment among women increased an additional 11 percent against 2020 due to homemaking responsibilities, studies or other limitations.

 The pandemic also came shortly after the 2019 federal decision to end a subsidized child care program that served 2 million children since 2007, due to austerity measures, limiting possibilities for women that needed to take care of their children. According to Coneval’s National Evaluation Council for Social Development Policy report, the program relieved parents from 34 hours of childcare duties a week thus increasing female participation in the workforce by 18 percent.

Currently, Nuevo Leon, Mexico City and Aguascalientes have the highest rates of employment permanence across the country. However, the states face important challenges such as a high salary gap, long working hours and low coverage in early childhood education.

According to the World Economic Forum’s 2021 Global Gender Gap report, the pandemic added another 36 years to the goal of closing the existing global gender gap. ECLAC's Executive Secretary Alicia Bárcena says that the results of the past year are equivalent to a 10-year regression.

Deficient working conditions have led to 75 percent of female college graduates to not have a paid formal job, according to the McKinsey report. The continued lack of representation in the workforce can help to explain the continued presence of biases towards women in hiring processes. As industries move into the future, investing in fortifying the national education sector, particularly in STEM fields, is key to address these shortcomings and to ensure women are prepared for an economy defined by Industry 4.0 trends, according to the Organisation for Economic Co-operation and Development (OCED). 

More women joining the workforce can lead to benefits like economic autonomy for women, savings and higher income for households, higher profitability for companies and economic growth for Mexico. To achieve this, IMCO proposes to move toward an affordable and quality National Care System, in addition to generating incentives for companies to implement balanced work-life policies for their employees and early intervention programs to develop skills among girls and women to improve their opportunities in the labor market. At the same time, men should be encouraged to participate equally in childcare through extended paternity leave to give women further opportunities to continue with their careers.