The 621 thousand jobs generated in Q4 – El Financiero

At the end of the week, the IMSS reported that in July past 10.7 thousand formal jobs were created in Mexico, the youngest generation for a seventh month of the year since 2013excluding those lost in 2020 due to the pandemic.

In addition, it is barely a tenth of the jobs created in July of the previous year, when the labor market began to benefit from the positive effects of the subcontracting reform.

Specifically, from July to November 2021, there was a solid recovery in IMSS-affiliated employment, within the framework of the transition from the subcontracting to direct contracting labor regime.

The reform of outsourcingwhich regularizes the employment relationship and prohibits subcontracting, explains the reactivation of formal employment after the pandemic, since in the fourth quarter of 2021 it could be above its level in February 2020.

The good news is that, according to official information, at the end of July 2022 the number of workers permanent and temporary insured in the IMSS amounted to 21 million 79.4 thousand people.

The figure, in addition to representing a new all-time highmeans the annual addition of 787.5 thousand job positions, or an increase of 3.9 percent compared to July 2021.

Nevertheless, slowdown continues from the little more than a million jobs created in 12 months until last February, equivalent to an annual rate of 5 percent in labor registrations.

July, which was characterized by the increase in the number of infections due to the fifth wave of covid-19 in Mexico, was the fifth month in a row in which a slowdown in the annual rate of job creation was reported.

At the state level, IMSS data indicate that, at the end of July, 11 states grew above the annual national expansion of 3.9 percent.

Among these entities, Tabasco stands out –where the Dos Bocas refinery is being built–, Baja California Sur and Quintana Roo –where the tourism industry was reactivated–, as well as Hidalgo, which maintained double-digit annual growth.

Although the number of workers affiliated with the IMSS linked in July five months above 21 million, the level of formal employment in the country shows weakness.

In the 44 months What’s up? of the administration of President López Obrador 621.5 thousand jobs have been generated formal.

At the rate we’re going at the end of the ‘transforming government’ they would have created little more than one million of jobs in the formal private sector of the economy.

The 621.5 thousand positions are clearly insufficientsince we must consider those who became unemployed due to the effect of the pandemic and are still outside the labor market and seek to rejoin it.

But we must also consider those who each year try to join the labor force and demand an occupation.

In her report on job creation as of July, Gabriela Siller, director of Economic Analysis at Banco Base, stated that if the trend in employment growth from 2000 to 2019 is taken into account, “the current figure for total employment sample a deficit of 810 thousand job positions”.

But because job creation had already slowed in 2019, if the trend from 2000 to 2018 is taken into account, “the deficit of jobs until July 2022 amounts to one million 38.5 thousand positions”.

It is not a minor thing that the level of employment reached a historical figure in July, nor that it reports an annual growth higher than that of the Mexican economy and maintains a relatively stable rate in recent months.

The challenge forward is thatprecisely, the level of employment formal stay stable in the face of signs of a national economic slowdown.

The next step will have to be in the direction of accelerate integration into the formal labor marketsince a high level of informality prevails.

Unfortunately, under the current conditions, a part of the population will continue without finding formal employment, or will find it in the informal sector.

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