The Mexican labor market is gradually recovering the shape it had before the pandemic, through the good and the bad. The employed population in September reached 55 million people, 4.2 million more than a year ago, and the unemployment rate continues to decline, although it is still above its levels prior to the coronavirus crisis, it has revealed this Monday the National Institute of Statistics and Geography (Inegi). The indicator that has fully recovered is informality, which again reaches 56% of workers.
The country’s economic recovery, after suffering a drop of 8.5% in GDP in 2020, translates into better employment figures. In September, the unemployment rate stood at 3.9% of the active population. There are 344,000 fewer unemployed people than a year ago, according to the National Survey of Occupation and Employment. However, the rate is still above 3.6% in the first two months of 2020, just before the pandemic hit.
The underemployment also recedes. People who needed and were available to work longer hours represented just over 12% of the employed population in September, 6.8 million people. They are 1.2 million less than in the same month last year. Despite the improvement and as is the case with unemployment, the underemployment rate is well above the 8% registered in 2019.
While most indicators have not yet recovered their pre-pandemic levels, the weight of informality in the labor market does. 31 million people, 56% of the employed population, found employment in the informal economy. The percentage is 1.3 percentage points higher than that of September a year ago.
The informality rate fell to historic lows in April 2020, with less than 50% of the population employed, shortly after the authorities declared a health emergency due to covid-19. Confinement and the rise of teleworking caused the closure of thousands of street stalls and other informal businesses. These quickly recovered from May and June when restrictions on mobility began to relax.
Formal employment has had a slower recovery, although it has gained strength in recent months. This was the best month of September for the Mexican Social Security Institute (IMSS) since there are records, with 174,000 new jobs. This figure places the total at just 18,617 jobs in the February 2020 indicator.
September is also the first month of the full entry into force of the reform that prohibits the outsourcing and that forces companies to integrate subcontracted workers into their workforce. The IMSS has indicated that the measure has led to an increase in permanent hiring, but experts point out that its impact on employment can be mixed with the general effects of the economic recovery.
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