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 News Around the Republic of Mexico | November 2007 
Lack of Jobs in Mexico is Acute
 Jeremy Schwartz - Atlanta Journal-Constitution
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| | Mexican President Felipe Calderσn made jobs the focus of his campaign last year. His efforts, so far, have sparked controversy. (Susana Gonzalez/Bloomberg) |
Mexico City Cesar Mora has been looking for steady work for three frustrating years since he graduated with a degree in applied mathematics from Mexico's National Autonomous University.
Now 30, he lives with his parents, does odd jobs such as fixing computers and wonders whether his career will ever start.
"It's sad, but it's the reality here," Mora said. "The diploma is just for pride. ... Companies here don't need workers."
Mora is yet another victim of the grinding job market in Mexico, which hasn't created enough jobs for its people in more than two decades. Mexico's inability to create jobs has sent college graduates and rural farmers alike across the border, many as illegal immigrants, or into the nation's vast informal sector, where they sell tacos or bootleg DVDs on the street without paying taxes or receiving state-mandated benefits and Social Security.
Of the 44 million economically active Mexicans, only an estimated 15 million have formal jobs. The situation is particularly acute among the nation's youth: More than 40 percent of Mexicans ages 15 to 24 can't find a job, according to the nonprofit group Young Entrepreneurs for Mexico.
A year ago, Felipe Calderon campaigned for president as the "Candidate of Jobs," promising what no Mexican leader in 25 years has been able to deliver: enough jobs for Mexico's people.
But as Calderon nears the end of his first year in office, his administration's record on job creation is shrouded in controversy.
Leftist critics say Calderon has yet to create the promised jobs and blast his first efforts as disasters. Conservative economists and government officials tend to see Calderon's efforts as bearing fruit.
1.3 million new jobs needed each year
Last month, Calderon bragged that his job-creation efforts have resulted in 825,000 new jobs through Oct. 15, more than 30 percent ahead of even the government's optimistic projections.
Yet few in Mexico put much stock in those numbers. More than half the new jobs are temporary, and government statistics are notorious for reflecting a decidedly rose-colored version of reality. (Mexico's official unemployment rate of 3.8 percent is often dismissed as greatly distorted.)
Mexico's job challenge is frightening: The country needs about 1.3 million new jobs annually just to make room for young people entering the work force each year. That does not account for the estimated 27 million underemployed and unemployed Mexicans, millions of whom have fled across the border in search of work.
The so-called maquiladora industry which includes U.S.-financed auto and electronics assembly plants once was seen as the panacea for Mexico's job woes. But it has suffered in recent years as factories moved to China and Central America, and it now employs fewer Mexicans than it did in 2000.
Most analysts agree Mexico needs about 6 percent annual economic growth to reach its job-creation target. This year, Mexico's economy is on pace to grow by 2.9 percent, among the lowest rates in Latin America. Government estimates are for about 5 percent growth by the end of Calderon's term in 2012.
Such numbers mean little to Yolanda Mendez, a 40-year-old divorced mother of five. She sells prepaid cellphone cards at an intersection in southern Mexico City, taking home about $35 a week in salary and an additional $2 to $20 a day in commissions.
"For a long time I looked for a different job, but places were giving me work for minimum wage, for 10 hours a day and without Social Security," she said. "Working in the street in the middle of buses and cars isn't easy. I get sore throats a lot, and almost every day I get headaches."
Private investment is government's answer
Analysts say Calderon doesn't want the government to directly fuel job growth. Rather, he is focused on creating the conditions to allow private investment to thrive, creating jobs in the process.
"The strategy of the government is to maintain stable macroeconomic factors," said Ernesto Cervera, an economist with the conservative Mexico City GEA think tank. "But you have to sustain it. There have been years in the past that we've seen 1 million [new] jobs, but you have to continue it and right now we have the conditions for sustaining that type of growth."
The Calderon administration says investment, mostly foreign, reached more than $13 billion in the first half of 2007, nearly 40 percent more than the same period in 2006. Most goes to the tourism, transportation and construction industries.
"The investors are reflecting a great confidence in the country, in terms of what this government has shown in political maturity, negotiation with opposition political parties, with an electoral reform, a fiscal reform, reforms to government pensions and Social Security," said Omar Rodriguez, director of labor policy for the Calderon administration.
But critics say the government lacks a coherent job-creation strategy and has abdicated its role in the process.
"Private companies aren't looking out for the development of nations," said Javier Aguilar Garcia, an economist at National Autonomous University. "They are looking to generate profits, not jobs. Their logic is a different one."
Both big business and entrenched unions also get blamed for the nation's stagnating work force: Monopolistic companies such as Telmex, the Carlos Slim-owned company that controls 94 percent of the country's fixed telephone lines, have little incentive to offer competitive salaries, analysts say. And unions get blamed for squeezing new jobs because worker benefits, such as generous pensions and severance packages, make it too expensive for many smaller firms to hire new workers.
Many analysts nevertheless expect explosive growth in Mexico. For instance, Goldman Sachs predicts Mexico will have the world's sixth-largest economy by 2050. But the growth spurt appears to be 10 or even 20 years away.
That's little solace for people like Mora.
"I'll be 40 years old then, and it will be even harder to get a job," he said. "I need to take advantage of things now, while I still have the strength." |
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