Low wages increase the need of additional jobs

In September 2019 , the percentage of Mexico’s working population that has the need and availability to work more time (underemployment) reached its highest level in three years, which reflects that the labor market does not provide sufficiently attractive opportunities for Mexicans.

According to Mexico’s National Statistics and Geography Institute (Inegi) , the underemployment rate was 7.8% in September, the highest figure since August 2016. The men’s rate reached 8.2% , while women’s reached 7.4%.

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The increasing need to look for more working time is due, in part, to low wages .

Over half of subordinate and paid workers in the country earn, in the best scenario, up to MXN $6,161 per month , according to the National Survey on Employment in the third trimester of 2019.

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Over a fifth part of these employees have a working day that does not exceed 38 hours a week , that is, 6.3 hours a day as a maximum.

According to the level of education, most underemployed workers finished junior high school (35.3%) or have high school and college studies (28.1%) .

37.2%

of them work in the service sector and 23% works in commerce.

Informality, a break.

The problem of underemployment adds to the high level of informal employment in the country, which has caused the stagnation of the underemployment rate and has kept it with a slight downward trend, reaching its lowest level since last April.

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The labor informality rate was of 56.72% in September 2019 , superior to 56.36% from last August .

In the ninth month of the year, 60.2% of the population of over 15 years old was classified as economically active . This rate is superior to the one from the previous month, also with seasonally adjusted figures.

Specialists see little potential in additional decreases in the unemployment rate.

Juan Carlos Alderete

, Banorte’s senior economist , estimates that the stagnation of the productive activities will probably limit a strong lowering of the unemployment rate, despite its improvement in the last two months.

In his opinion, the increase in participation in the informal sector can be absorbing a bigger amount of jobs.

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