Mexico’s Unemployment Rate DropsThu, 03/25/2021 - 17:41
This week, Mexico announced a reduction in its unemployment rate, while President Andrés Manuel López Obrador’s plan to universalize and increase pensions raised concerns among private institutions. In the aftermath of International Women’s Day, expert contributor Gustavo Linares shared suggestions to address the gender gap. In international news, the US saw a reduction in jobless claims, which fell below the 1 million mark for the first time in a year.
HR departments can be instrumental in reducing and eliminating companies’ gender gaps, argues Gustavo Linares, Founder of TalentHow, in a piece for MBN. Linares highlights the importance of equal pay across all levels of the organizations and gives several suggestions to help employers avoid gender bias. The gender gap continues to be a problem for numerous organizations. “According to the International Labor Organization, women earn between 50 percent and 96 percent of men's wages, depending on the country,” says Linares.
Mexico shrank its unemployment rate from 4.7 percent to 4.4 percent by adding 1.1 million new jobs during February 2021, according to the National Occupation and Employment Survey (ENOE). This is a positive turnaround as employment had been falling for the previous three months. This surge can be attributed to the opening of economic units as lockdown measures are relaxed in major cities. The country, however, is still behind its pre-pandemic employment levels.
President López Obrador revealed his plan to reduce the age at which seniors can apply for a pension, from 68 to 65 years. The president also plans to gradually double the amount seniors receive to MX$6,000 (US$290) every two months by 2024. This adjustment will require significant adjustments to the budget allocated to the Pension for the Well-Being of Seniors program, which will increase from MX$135 billion (US$6.5 billion) to MX$240 billion (US$11.6 billion) in 2022, MX$300 billion (US$14.5 billion) in 2023 and MX$370 billion (US$17.9 billion) by 2024.
The president’s announcement drew criticism from the private sector. The generation of a universal pension for seniors requires a comprehensive fiscal reform, argued Mexican policy think tank Centro de Estudios Espinosa Yglesias (CEEY). The center warns that without a proper fiscal reform, current moves to increase pension amounts and the number of pensioners will only cut resources. Alejandra Macías, Director of the Center of Economic and Budget Research (CIEP), told El Financiero that if expenses continue at the current rate, the changes might cause a deficit that could translate to budget cuts in infrastructure and education. Bank BBVA suggested granting this pension only to those who were not currently receiving a pension from IMSS or ISSSTE, reports Milenio.
In foreign news, US unemployment claims shrink to their lowest since the start of the COVID-19 pandemic. The US government reports that only 898,534 new unemployment claims were filed this week, making it the first time that these claims fall below the 1 million mark since March of 2020.