Labor Crisis Not Yet Over in Mexico
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Labor Crisis Not Yet Over in Mexico

Photo by:   Pablo Clemente, Unsplash
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By MBN Staff | MBN staff - Thu, 01/14/2021 - 17:47

This week confirmed what many already knew. 2020 was the worst year for the Mexican labor market on record. According to figures released on Tuesday by the Mexican Social Security Institute (IMSS), the crisis generated by the pandemic eliminated 647,710 formal jobs. The worst job losses were seen in the services sector with a drop of 9.4 percent in December 2020 against the same month in 2019, followed by the extractive industry with 6.6 percent, construction with 5.5 percent and retail with 2.5 percent.

The National Commission of the Retirement Savings System (CONSAR) also reported that Mexicans withdrew a historic amount of MX$2.1 billion (US$104 million) from their Afore. The average amount received by workers was MX$11,735 (US$595). The number of people who applied for this assistance was more than double the number of people who became formally unemployed.

Experts say, however, the crisis is not over yet. Carlos Capistrán, Chief Economist for Mexico and Canada at Bank of America (BofA), told Expansión that the recovery in employment will take at least a year and predicts a complicated 1Q21 after the closing of business last December. “The economy slowed down in December. It is going to be very weak in January and in 1Q21 we are going to have another contraction,” Capistrán said.

More news below:

  • The new reform on home office came into force in Mexico on Tuesday. New regulations recognize remote work as recurrent “paid activity performed in places other than the establishment of the employer," as well as the use of information and communication technologies to establish a connection between employer and employee. Read here the highlights of this new reform. 

  • While COVID has been disastrous for many businesses in Latin America, it has also catapulted how we work more than 10 years into the future. “Forty-five percent of companies confirmed they are implementing or plan to implement robotization in the next 12 months. AI has seen a similar uptake, with more than 35 percent of respondents confirming the implementation today or during the next year. Why these technologies? Why now?”, Courtney McColgan, Founder and CEO of Runa HR, answers these questions in an article for MBN

  • According to CONSAR data, there are 18,453,289 workers in Mexico who do not know they have an Afore. These people have never chosen which Afore to contribute to and have been assigned one automatically.

  • The Swiss Embassy and the Swiss-Mexican Chamber of Commerce and Industry are helping young Mexicans to acquire the skills to enter the formal workforce. Fernando Cruz, President of the Swiss-Mexican Chamber of Commerce and Industry, writes on MBN this week about this alliance, which seeks to take advantage of Switzerland’s experience in “dual education training”.

  • The International Monetary Fund urged countries to continue their fiscal and monetary efforts to support their economies, as it sees “great uncertainty” regarding the risks posed by a resurgence of COVID-19 cases and new variants.

  • On World Day Against Depression, celebrated on Jan. 13, the Mexican Psychiatric Association reported that 4.8 percent of the adult population in Mexico suffers from depression. This figure may increase in the coming years due to the pandemic

Photo by:   Pablo Clemente, Unsplash

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