Employment in Mexico: improvements, but still a long way to go

During October we had the official statement that employment is at an all-time high, and obviously, that the jobs lost by the financial crisis were already recovered.

Both facts are true according by the figures given by Social Security (IMSS) and by INEGI’s employment national survey. This situation reflects the economic recovery we have lived on the last quarters.

However, there is a part that is not mentioned: population growth. The rhythm of employment creation is less than the increase of population, and although the employment level of 2007 has been recovered, there are more than 3 million Mexicans that have entered the group of potential workers (14 years or more) on the last two years and a half.

What does this unbalance between new jobs and population growth means? According to INEGI’s figures:

1.       To have 2.5 million Mexicans unemployed

2.       To have more than 5.5 million Mexicans that do not look for job because they think they don’t have a chance! With the waste of talent and social risks this attitude implies.

3.       To have 4 million Mexicans with an occupation, but willing or needing to offer more working hours (sub-employment)

4.       To have almost 13 million working in the informal economy, with all the consequences it implies to national economy.

5.       To have an average of lower income than two years ago (occupied population that earns less than 2 minimum wages passed from 42% to 46% on the last two years and a half).

What are the consequences?

·         A weak domestic market. The economic growth has been mainly by exports to United States, and although retail sales have increased in this year, it has not been enough to recover last year’s fall.

·         Social risks. The famous “demographic bonus” is turning into an important social risk due to the number of young people without employment opportunities.

·         The opportunity to find unemployed talent. Within the unemployed, there are 834,000 mexicans with high school or tertiary education. This is one of the highest concentrations of unemployed people with this profile on the last 10 years.

I don’t mean to be pessimistic. I want to offer a complete view of the risks and opportunities in the labor market, so you can analyze how they will affect your organization.