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 News Around the Republic of Mexico | August 2005 
Lack of Unemployment Insurance, Migration Account for Low Jobless Rate
 Anthony Harrup - Associated Press
Mexico City – Mexico brags about its low unemployment rate, but the country's National Statistics Institute said that the lack of unemployment benefits and worker migration to the U.S. are prime factors in keeping official estimates of the jobless low.
The institute, known as INEGI, issued a statement this week to explain a new employment survey introduced this year to bring Mexico's data in line with other members of the Organization of Economic Cooperation and Development, which Mexico joined in 1994.
The survey had been expected to add at least one percentage point to the unemployment rate, but instead it showed levels of unemployment below those of the existing survey of 32 major cities.
President Vicente Fox raised eyebrows earlier this year by stating categorically that Mexico has a lower unemployment rate than any country in Europe or Latin America, using the new reporting method.
The new survey includes all workers, not just people in the formal economy or those in cities. It takes into account the large numbers of self-employed.
In a document entitled "50 Questions and Answers" about the new survey, posted this week on its web page, INEGI said two major factors that contribute to Mexico's low level of unemployment – just 3.6 percent in June compared with 6.5 percent for the OECD as a whole – are the absence of unemployment benefits and worker migration.
Unemployment insurance in industrialized countries allows people to remain out of work for longer periods, and to be more choosy in the kind of work they take, INEGI said.
The fact that hundreds of thousands of Mexicans seek work each year in the U.S. also has a diminishing effect on the unemployment rate in Mexico, the agency added.
"The labor supply is domestic, but demand for its services goes beyond our borders to a notable extent," INEGI said.
INEGI specified that it doesn't consider as employed those who clean windshields, who juggle at traffic lights, or who sing on the Metro for coins, describing those activities as "disguised begging" and a "unilateral transfer of resources."
The statistics institute also said that the effect of raising the minimum age of the workforce to 14 in the new survey from 12 in the old was statistically insignificant.
Also insignificant to the overall jobless rate is the definition of employed as someone who worked at least one hour a week, since so few people work only one hour, INEGI added.
Anthony Harrup is a correspondent for Dow Jones Newswires |
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