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Weekly Roundups

The Week in Talent: Working Poverty and Unemployment on the Rise

By Cas Biekmann | Fri, 11/15/2019 - 14:11

A new initiative was launched to solve labor conflicts, of which only 35 percent have been resolved. Working poverty and unemployment are on the rise, while low wages create concerns regarding pensions. The Ministry of Labor and Social Welfare announced that a reform in subcontracting law is not needed. Ramping up inspections, however, would be beneficial and would make the country a better place.

 

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Working Poverty Climbs to 38.5 Percent, Rise in Unemployment

Between 2Q19 and 3Q19, the percentage of workers whose salary is not enough to buy bare necessities climbed from 38.1 to 38.5 percent. This is what the National Council for the Evaluation of Social Development Policy (CONEVAL) calls working poverty, that those who have a job but are not able to afford what they need the most. The increase in minimum wages is not improving the situation when compared to purchasing power.

Unemployment is also rising, reaching 3.6 percent of the population. This is higher than last year’s figure and higher than early 2019 figures. Another source of concern is the creation of fewer new jobs in 11 of the last 12 months.

 

New Labor Justice Initiative Aims To Solve Over 50 Percent of Conflicts

At the moment, only 35 percent of disputes between workers and their supervisors are resolved, but president Margarita Rojas Olvera of the Local Conciliation and Arbitration Board of Mexico City (JLCA CDMX) says the goal is to improve this by at least 15 percent. The board will not stop until it gets better results.

 

Only One in Four AFORE Generation Workers Will Have Pension

Only 25 percent of the AFORE generation (those who joined IMSS between 1997 and 2007) will have sufficient pensions. Since they are not alone in this, the government will have to step in with further help. Most people in this generation receive salaries below MX$12,500 (US$651), meaning their pensions will not be enough, says the National Retirement Savings System Commission (CONSAR).

 

Ministry of Labor and Social Welfare (STPS): Subcontracting Reform Not Needed

STPS says this is it in terms of clarity regarding subcontracting law. The real issue is in inspections and punishing wrongdoers, rather than in the law itself.

Cas Biekmann Cas Biekmann Journalist and Industry Analyst