Unemployment rate in Mexico increases

Francisco Flores, an economic analyst from the Banorte Financial Group, said that the increase in unemployment rates is explained by more firings in the public sector

Unemployment rate in Mexico increases
Unemployment rates have increased in the last months - Photo: Henry Romero/REUTERS
English 23/01/2019 14:07 Rubén Migueles Mexico City Actualizada 14:16
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The firing of government workers after the transition between governments and the loss of positions in the economy's formal sector have caused an increase in Mexico's unemployment rate, as it reached its highest level in the last two years.

The unemployment rate was 3.6% among the economically active population in December 2018, the highest rate since December 2016, according to information provided by the Inegi.

This means that 1,996,000 people were unemployed but they were looking for a job at the end of the year, an increase of over 145,000 workers that became unemployed from November to December 2018.

Francisco Flores, a financial analyst from the Banorte Financial Group, said that the increase in unemployment rates is explained by more firings in the public sector and autonomous organizations after the new administration implemented new austerity measures.

He said that measures such as the minimum wage increase will limit the decrease of the unemployment rate in the following months, even after considering the fiscal stimulus in the northern border.

Nevertheless, the implementation of the labor inclusion programs, such as Youth Building the Future, could mitigate the effects.

Aníbal Gutiérrez, a university professor and UNAM researcher, said that even if the 2019 budget doesn't contemplate cutting off a large number of job positions, it has registered a gap in hirings between the end of the previous administration and the beginning of the new one.

“Many employees left voluntarily, before the previous administration ended, other terminated their contracts when the previous administration ended, and others, who usually terminated their contracts and signed another one, didn't renovate them because the positions are frozen, waiting for the government's decision.”

But he explained that “it's likely that the situation goes back to normal this year, now that they are bringing in their people.”

Another factor that has influenced the increase in the unemployment rate in Mexico was the loss of formal jobs that takes place every year when temporary workers are fired.

According to information from the IMSS, the number of affiliated workers decreased by 378,561 in December, the highest number of lost jobs registered since 1997, when the register began.

An x-ray of unemployment

By gender, the unemployment rate among men increased, it went from 3.3% in November to 3.5% in December 2018, meanwhile, in women, it went from 3.5% to 3.7%.

The highest unemployment rates were registered in Tabasco, 7.9%; Mexico City, 5.2%; Durango, Mexico, and Tlaxcala, 4.1%.

After comparing the November-December 2018's unemployment rate, this has higher than the one from the same period in 2017, which was 7%.


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