Today we celebrate Labor Day, in this perspective we must reflect on what has been happening in the workplace where there has been a recovery of the minimum wage consistently since 2018, and a restructuring of the workplace in terms of labor justice, both factors that have allowed us to guarantee a better work space. However, a high rate of labor informality remains according to the Hussmans matrix published by INEGI. According to the information published by INEGI for October-December 2023, informality reaches 54.8 of the employed population, equivalent to 32 million of a population of 59 million employed people. The composition of informality at the end of 2023 was 16.8 million in the informal sector, in paid domestic work 2.5 million people, in companies, government and institutions 7.9 million and in the agricultural sector 5.5 million of people. These figures show the need for a change in labor policy, since the growth of the economy alone will not allow this situation to be corrected and this brings with it instability, insecurity and the appearance of precarious situations for the population that finds itself in informality.
Added to this situation is the slow growth of the economy, which prevents an expansion of jobs in the formal sector at the rate required. So that the reader can size up this situation, let’s analyze at what rate the economy would have to grow to absorb the population from the informal sector. Currently the formal sector has 27 million, and a substantial expansion was required to absorb the 32 million in the informal sector. The above shows that a strong expansion of the economy and new rules of the game are required so that the 59 million people were all formal.
A necessary condition would be for the economy to grow at a higher rate and unfortunately we are facing a low expansion of the economy. If we review the figures for the first quarter of 2024 we observe that the growth was only 0.2 percent, which confirms that the economic space is not growing at the rate required to solve the problem of the work space and what should concern us is this growth is one fifth of that observed a year ago, and slightly higher than that observed in the last quarter of the year. Regarding its composition, it is observed that the dynamism came from the services sector, which expanded 0.7 percent, while the industrial sector and agriculture and fishing showed small contractions.
A key issue to confront this problem is that we have to be aware that a large part of this puzzle is found in the agricultural sector; the slow growth of the sector and its informality require special attention. This situation is made evident by the increase in violence in the rural sector where organized crime has acquired a predominant role in much of the territory. The wrong bet is to look for investments that come from outside to slowly reduce the problem. In this matter, a more energetic response is required, or we act today on the employment situation in the rural sector or the deterioration will continue. A strong expansion of investment in the agricultural field is required to address several problems, informality, its productivity and sustainability in the face of imminent climate change.
In the urban area, informality requires a different treatment, we need to launch a crusade to formalize paid domestic work, act on the informal sector and guarantee that companies, the government and institutions formalize all employment.
The scenario in this perspective is not very encouraging due to the figures released by INEGI this week on growth. The question that arises is whether this weak performance in the first quarter will imply lower annual growth, or is it simply a result of the beginning of the year and it will be possible to reach 3 percent for the entire year. The expectation of the Ministry of Finance in its Economic Policy Criteria indicated that the Mexican economy would grow in a range of between 2.5% and 3.5% this year as a result of greater consumption, the completion of infrastructure works and a growing external demand by the United States.
We are facing a dilemma since with the change in Public Administration it is not expected that the results can be altered by more aggressive economic policy measures this year, we will have to settle for the trickle of economic growth.
