With a drop in traffic and staff cuts in some businesses, the commercial sector felt the decrease in cash due to the crisis facing the maquila industry in Juárez, where around 800 million pesos (mdp) have stopped moving per month.
Elizabeth Villalobos Luna, local president of the National Chamber of Commerce (Canaco), reported that although she does not have exact numbers, businesses have reported a drop in clientele and some have had to lay off staff.
“I think that due to the global economic situation, I think there have been many business closures, yes there have been a number of people or employees who have withdrawn from Social Security, which is the way we can measure whether the business is growing or declining,” he said.
Mario Cepeda, head of the Mexican Employers’ Confederation (Coparmex), estimated that the slowdown that has occurred in the industry since last year has reduced the currency in circulation by between 600 and 800 million pesos at the border, which Villalobos Luna said had an impact on businesses.
“Economic power has been lost and those of us who live in Ciudad Juárez depend on each other; small businesses depend on larger ones and of course when you pull the covers off one side, the other is revealed,” he said.
According to the Mexican Social Security Institute (IMSS), 2,563 jobs were lost in this town last June; thus, this border area dropped 0.51 percent in formal jobs, going from 499,654 in May to 497,091 in June.
The trade sector comprised 58,074 of the total registered positions last month, but these are 0.14 percent (79) less than the 58,153 that this sector occupied last April, as a consequence of a domino effect that companies are dragging along.
Villalobos Luna added that the current context has led to a greater growth in informality, which has also put legally established businesses in jeopardy and has increased poverty, since people in this situation lose multiple benefits.
“The informal sector will never be able to provide its employees with social security, a pension, an Infonavit loan, or medical services, and that is poverty, and then the business will never have access to a bank loan to grow, because the first thing that banks ask for is formality,” he said.
Based on the monitoring, 17,819 jobs have been lost in this municipality since April 2023, mainly in the maquiladora industry. The causes are varied, but include, among others, political uncertainty due to the electoral processes in Mexico and the US.
In addition, war conflicts in the Middle East have played a role, as well as competition between countries with lower labor costs, global demand for products influenced by changes in consumer preferences, and insecurity and other social problems that deter investment.
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