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 Business News | December 2007 
Mexican Government Expects Labor Reform Next Year
 Jason Lange - Reuters
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Mexico City – Mexican Labor Minister Javier Lozano said this week he expects Congress to pass a reform of labor laws next year to make the job market more flexible.
The reform would build on government efforts to bolster Mexico's economic growth by making it more competitive. Investors are keen to see restrictions on hiring and firing eased.
Lozano said Labor Ministry officials are working out a compromise that wins consensus support in Congress out of the more than 100 proposals submitted by various parties in recent years.
That process should yield a rough consensus proposal in December, he said.
“Next year we will have a labor reform.” Lozano told a news conference.
Lozano gave few indications of what the labor reform might include but said the government wanted to make it easier for companies to hire staff. “We have to free up access to the jobs market,” he said.
Companies in Mexico often hold back from hiring because it is costly to dismiss employees.
Lozano also said the proposal needs to include changes to how labor dispute boards handle issues like strikes and legal challenges to dismissals.
So far this year, the government has won reforms to boost tax collection and establish private retirement accounts for workers in the public sector, breaking seven years of deadlock in Congress.
Lawmakers on the labor committee in Congress from both the ruling National Action Party and the key opposition Institutional Revolutionary Party said they hope to start deliberating on a labor reform proposal in January or February.
The lawmakers say one possible measure in the reform would be to allow more flexibility in scheduling the work week. Currently, companies by law divide the 40-hour week over five days.
A proposal in that sense “is probable,” said Antonio Berber, a ruling party lawmaker on the labor committee.
Economists say perhaps the quickest way to boost the economy would be a constitutional reform to allow private companies into the sagging state-run oil sector.
But with opposition parties lined up against such a measure, conservative President Felipe Calderón is seen shooting for a series of smaller economy-related reforms instead.
Even an eventual labor reform will likely be less business friendly than Wall Street would like because Calderón, who lacks a majority in Congress, needs the support of opposition parties with close ties to unions.
“If we tried to to achieve the perfect reform by consensus, another administration would pass with nothing getting done,” Lozano said.
Calderón's predecessor, Vicente Fox, tried and failed to push economic reforms through Congress, which was also dominated by the opposition.
(Editing by Leslie Adler) |
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