Amid all the noise about the future of its trade relationship with the U.S., Mexico is quietly creating jobs at a record pace and reducing the informality that for decades has held back its economy, Bloomberg News reports.
More than 517,000 Mexican workers gained access to social security in the first half of 2017, a 17 percent increase from a year ago and the most in at least two decades, according to the nation’s social security institute. While many had some kind of income before, paying into the system gives them basic benefits such as health insurance and retirement payments. Official data showed the percentage of workers in the informal economy has fallen to 57.2 percent, down from a peak of 60 percent during the 2009 global crisis.
“This is a very strong year for job creation,” said Rafael de la Fuente, chief Latin America economist at UBS AG. “The shining light in the whole consumption story is employment. There’s no question that you’ve made a dent in informality under this administration.”
A portion of the gains can be attributed to an overhaul of labor laws approved in 2012 under then-President Felipe Calderon, with the blessing of the Institutional Revolutionary Party of President Enrique Pena Nieto, who had just been elected. The changes allowed for more flexible contracts. With more disposable income, workers are boosting retail spending and supporting growth at a time when the economy faces challenges from lower oil production to uncertainty about foreign investment and the future of the North American Free Trade Agreement, or Nafta.
Mexico, the U.S. and Canada are set to start talks as soon as next month to renegotiate Nafta, which President Donald Trump says is responsible for millions of job losses in the U.S. and a $63 billion trade deficit with Mexico.
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