Possible Labor Exploitation Points to Institutional Failures

Although Mexican laborers are working longer hours in comparison to previous years, its often in increasingly lower-paying jobs, according to the most recent data released by the National Institute of Statistics and Geography (INEGI). These findings point to prolonged institutional failures to protect people from labor exploitation.

While Mexico’s economic recovery created more employment opportunities in the formal sector throughout 2021, it failed to make a significant impact on the country’s unemployment. In 2021, Mexico’s economy added a total of 846,416 additional jobs to the formal economy, a 4 percent annual increase according to the Mexican National Security Institute (IMSS). Despite recording its biggest increase on record, the national unemployment rate decreased only slightly, falling only 0.9 percent to 3.7 percent from 2020, when it stood at 4.5 percent.

Furthermore, in the face of a highly competitive labor market and rising inflation, working people have seen themselves obligated to work longer hours to make ends meet. Currently, according to the data provided, roughly 62.8 percent of Mexico’s working population earns up to two minimum wages, equivalent to about MX$10,372 (US$503). Meanwhile, as wages remain stagnant, the country’s inflation rate continued to climb throughout the year to close at 7.36 percent in December.

To meet their monthly expenses, many people felt compelled to work longer hours, thereby compounding an average workweek that forces about 52 percent of the working population to work between 35 and 48 hours a week. The report indicates that there was a 1 percent increase among people working over 48 hours a week and a 0.8 percent increase among those working between 35 and 48 hours a week.

These trends coincide with a recent report by NGO Acción Ciudadana Frente a la Pobreza, which found that approximately 35 million working people receive precarious wages and receive no social security. Unable to ignore these converging complexities, the federal government, unions and employers came to a consensus to raise the minimum wage an additional 22 percent in 2022, the fourth time since 2019. Its impact, however, will likely go unperceived by laborers who are currently contending with the highest consumer prices since 2012.