More than 600 thousand jobs lost in Mexico – Ministry of Finance

MEXICO (CEO Magazine) – The loss of jobs in Mexico is advancing rapidly. This fact is revealed in an internal document from the Ministry of Finance. It is stated that the cancellation of employment affiliated to the IMSS accumulated a total of 667,061 people as of April 29, compared to the record of February 29, 2020. 

On April 12, the Secretary of Labor, Luisa María Alcalde, reported that between March 13 and April 6, 346,878 jobs were lost in the country as a result of the health emergency caused by the COVID-19 pandemic. The Treasury document, dated April 30 -and CEO has a copy- compares the period from October 2008 to May 2009, during the financial crisis called “The Great Recession” when 696,438 jobs were lost, almost the same as in two months of the current economic emergency. “In that episode (of the Great Recession), the recovery of formal employment took 15 months because, until August 2010, the record reached in October 2008 was exceeded,” the document states. However, it does not predict how long it will take Mexico to recover the jobs lost until April. 

As if that were not enough, the data of job cancellations recorded between March and April this year is almost double the 342,000 jobs created in 2019. By state, Quintana Roo, Baja California Sur, Nayarit, and Guerrero were the ones that presented more worker layoffs, according to the document of the Treasury. The four states accumulated a reduction of 137,115 members of the IMSS, which represented 20.6% of the national loss of jobs compared to March 13, 2020, date of the highest registration of affiliations nationwide. 

As for the economic sectors, those most affected by the crisis, and those that have cut most jobs are the Services and Construction sectors. The first sector has contracted by 253,304 jobs and the second by 226,177. The Commerce sector has lost 41,632 jobs, while the Transport and Communications sector accumulated a reduction of 19,950 concerning the closing of February. The document specifies that areas such as the Extractive Industry (mining) already showed regular disincorporations before the contingency.

Finally, employers registered with the IMSS also accumulated a reduction of 7,075 for March 13, 2020. The sector with the most significant number of cancellations of employer registrations is construction, with the disappearance of 3,745. 

The data provided by the Ministry of Finance to the Presidency of the Republic, based on official IMSS figures, outline a reality that analysts, investment banks, international financial organizations, and business leaders in Mexico had warned against taking counter-cyclical measures to prevent the destruction of companies and jobs. 

This week, the rating agency Standard and Poor’s estimated that Mexico will be the Latin American country with the weakest economic recovery after the health and financial crisis since the stimulus measures have been limited. In contrast to other countries in the region such as Chile, Peru, Brazil, Colombia, and Argentina. 

According to the International Monetary Fund, Mexico ranks second to last in terms of the percentage of GDP invested in stimuli to reactivate its economy, with 1.1%. In comparison, others in Latin America, such as Brazil, have to spend above 7%, and even Argentina, with 2.4%.