MEXICO’S REPORT ON THE QUALITY ON EMPLOYMENT UNECE/ILO/EUROSTAT Seminar, October 14-16, 2009.

MEXICO’S REPORT ON THE QUALITY ON EMPLOYMENTUNECE/ILO/EUROSTAT Seminar, October 14-16, 2009

Mexico’s Unemployment Rate Puzzle

* Non-member economies.Source: OECD: Harmonised Unemployment Rate (HUR), July 2009.

Quality of Employment it is not just a key issue in its own right; in Mexico perhaps more than any country in this seminar just to get or to hold a job does not mean that somebody “has make it”.

Since its incorporation to OECD countries back in 1994, Mexico’ UR has been systematically lower than both the OECD total as well OECD Europe average and what has been observed during 2009 is not an exception on this regard.

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Standard explanations on why Mexico’s UR has been comparatively low

Huge migration flows to the U.S. (labor pressure transferred to the other side of the border).

A large informal sector.

A subsistence agriculture practices still prevalent (survival strategies either not in contact with labor markets or with no expectations about them) in dispersed rural areas.

There is not national unemployment insurance so it is not possible to remain under that condition for a long time; individuals are pushed to accept any offer out there and to be quite less “picky” as they are in developed countries.

These explanations may hold in general but the context faced during 2009 suggests there must be more than that because….

Amongst OECD countries Mexico’s economy has been probably the most affected as a consequence of the current recession; during 2009 first half GDP drops 10%.

Due the fact that the crises started in the US, migration flows have been at their lowest level ever.

Brazil’s informal sector is also significant and despite the global recession its economy is going to register a growth during 2009, yet its UR in July was above the Mexican one.

However…

Brazil has national unemployment insurance. This and the fact that there has been a typical real wages lag in Mexico since the eighties suggest that the labor markets of the latter adjust in a different way.

A typical OECD country labor market is one with characteristic rigidities so most of the burden of adjustment is felt –so far- in the side of quantities (level of employment).

In Mexico the side that bears most of the adjustment is the price of the labor force plus work conditions that is in terms of quality of employment.

May be Mexico is a litmus case in order to understand the meaning of most of the indicators proposed and how they function.

An Analytical Typology

Mexico country report consists on about 38 indicators, 30 of them corresponding to those explicitly described in the list contained in the document “INTRODUCTION OF THE CONCEPTUAL FRAMEWORK FOR MEASURING THE QUALITY OF EMPLOYMENT”

Making a typology in terms of what this indicator said it is possible to establish six categories:

I. Those amenable to analysis in terms of economic cycle

II. Context dependent indicators: cannot be interpreted in a straightforward manner

III. Those following their own inertia despite the context

IV. Those over and above economic cycle analysis with an unmistakable meaning

V. Those that may have an unmistakable meaning but in need of a more precise definitions

VI. Those with an ambiguous meaning

Indicators amenable to analysis in terms of economic cycle

1. Safety and ethics of employment

a) Fatal occupational injury rate

b) Non fatal occupational injury rate

2. Income and benefits from employment

a) Share of employees using paid annual leave

b) Share of employees using sick leave

3. Working hours and balancing work and non-working life

a) Share of employees receiving maternity/paternity/family leave benefits

4. Security of employment

a) Percentage of employees 25 years of age and older by job tenure

b) Share of economically active population contributing to a pension fund

5. Social dialogue and workplace relationships

a) Share of employees covered by collective wage bargaining

Share of employees using non-wage pecuniary benefits, 2005 - 2009

I II III IV I II III IV I II III IV I II III IV I II2005 2006 2007 2008 2009

53

54

55

56

57

Share of employees with paid annual leave Share of employees with job that pays a sick leave

Information for second quarters

Year Share of employees with paid annual leave

Share of employees with job that pays a sick leave

2005 55.38 54.252006 55.07 53.582007 56.33 54.942008 55.35 54.482009 54.61 53.58

Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE).

Context dependent interpretation of indicators


a) Share of employees working in “hazardous” conditions


a) Average weekly earnings of employees

b) Share of employees paid at below minimum wage

3. Working hours and balancing work and non-working life

a) Share of employed persons working 49 hrs and more per week

b) Share of employed persons working less than 30 hours per week involuntary

Context dependent indicators

c) Share of employed working more than one job

d) Average weekly (actual) hours

e) Percentage of people who usually work at night/evening

f) Percentage of employed people who usually work on weekend or bank holiday

4. Security of employment and social protection

a) Percentage of employees 25 years of age and older with temporary jobs

5. Social Dialogue and workplace relationships

a) Average number of days not worked due to strikes and lockouts

Share of employed persons working 49 hours or more per week, 2008 - 2009

2008 2009 2008 2009Share of total employment Share of total salary workers

0

5

10

15

20

25

30

35

28.6

26.9 30.1

28.1

34.2

32.1

11.3

10.4

19.4

18.4

18.4

16.8

Total Men Women

Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE), second quarters, 2008 and 2009.

Share of employed persons involuntary working less than 30 hours per week,

2008 - 2009

2008

2009

2008

2009

Share

of

tota

l em

plo

yment

Share

of

tota

l sala

ry w

ork

ers

0.0 0.5 1.0 1.5 2.0 2.5 3.0

0.5

1.6

0.8

2.6

0.6

1.7

1.0

2.8

0.2

1.4

0.4

2.2

Women Men Total

Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE), second quarters, 2008 and 2009.

Days worker1/ lost due to strikes and lockouts

2008

Annual 1 123 583

Jan 22 155

Feb 481 921

Mar 40 256

Apr 72

May 40 272

Jun 158

Jul 85 525

Aug 190 500

Sep 164 833

Oct 0

Nov 8 077

Dec 89 814

2009

Annual 298 976

Jan 0

Feb 205 415

Mar 59 027

Apr 26 866

May 1 812

Jun 5 856

Jul 0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul2008 2009

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

500 000

22 1

55

481 9

21

40 2

56

7

2

40 2

72

1

58

85 5

25

190 5

00

164 8

33

0

8 0

77

89 8

14

0

205 4

15

59 0

27

26 8

66

1 8

12

5 8

56

0

1/ Workers involved times the days not worked.Source: Ministry of Labour (STPS), Dirección General de Investigación y Estadísticas del Trabajo, based on data provided by the Federal Board on Labour Conflicts and Conciliation.

Indicators following their own inertia despite the economic context


a) Low pay (Share of employed with below 2/3 of median hourly earnings)

3. Workings hours and balancing work and non-working life

a) Ratio of employment rate for women with children under compulsory school age to the employment rate of all women aged 20-49

6. Skills development and life-long learning.

a) Share of employed who have more education than is normally required in their occupation

b) Share of employed who have less education than is normally required in their occupation

Share of employed below median hourly earnings

Information for second quarters

Year Total employment below 2/3

Total employment below 1/2

Salary workers below

2/3

Salary workers below

1/2

2005 21.56 13.10 20.36 9.952006 19.63 11.39 18.58 8.542007 20.25 10.52 19.24 7.672008 19.57 9.96 18.56 7.152009 18.56 10.42 17.30 7.48


5

8

10

13

15

18

20

23

Total employment below 2/3 Total employment below 1/2 Salary workers below 2/3Salary workers below 1/2


Skill development and life-long learning


0

2

4

6

8

10

12

Share of employed who have more education than is normally required in their occupation

Share of employed who have less education than is normally required in their occupation

Second quarters

Year

Share of employed who have more education than is normally required in their

occupation

Share of employed who have less education than is normally required in their

occupation

2005 9.98 2.91

2006 9.13 2.84

2007 9.74 2.79

2008 9.92 2.54

2009 9.61 2.51


Indicators over and above economic cycle analysis with an unmistakable meaning


a) Fatal occupational injury rate

b) Non-fatal occupational injury rate

c) Employment of persons who are below the minimum age specified for the kind of work performed

d) Employment of persons who are below 18 years in designated hazardous industries and occupations

e) Employment of persons below 18 years for hours exceeding a specific threshold

f) Fair treatment in employment

i. Salary Discrimination Index

Indicators over and above economic cycle analysis with an unmistakable meaning

ii. Women in the labor force with kids and without couple

iii. Men and women unemployment rates by age groups

iv. Men and women informal sector employment rates by age groups

v. Senior citizen population by activity condition

7. Workplace relationships and intrinsic nature of work

a) Labor force who have quit a job because have been harassed at work in the last year

b) Labor force who have quit a job because conflicts with a boss or superior

c) Labor force who have quit a job because discrimination at work

31%

69%

5 to 13 years old14 to 17 years old

TOTAL

Child labour below 18 years old

31%

69%

GIRLS

30%

70%

BOYS

Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE), Módulo de Trabajo Infantil, 2007.

Child labour below 18 years old

5 to 13 years old

TOTAL 1 113 480

Agriculture and husbandry workers 416 981Workers in manufacturing processes, helpers and assistants

146 971

Employees in retail trade operating with premises 261 956

Street vendors and other street jobs 100 898

Domestic servants 33 855

Preparation of food & beverages and other services 152 819

0%

20%

40%

60%

80%

100%

39.217.1

34.650.2

23.235.8

60.882.9

65.449.8

76.864.2 14 to 17

years old

5 to 13 years old

Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE), Módulo de Trabajo Infantil, 2007.

Salary discrimination index



-0.20

-0.15

-0.10

-0.05

Salary discrimination

indexfor second quarters

2005 -0.11

2006 -0.12

2007 -0.13

2008 -0.11

2009 -0.13

Women in the labour force with kids and without couple1/. Shares on respect total women with kids

in each category

% women in the labour force

% women employed

% women with jobs that gives them health care access

% women with jobs that does not give them health care access

% women unemployed

0 5 10 15 20 25 30 35 40 45

33.96

33.69

38.46

31.21

41.47

1/ Widows, divorces, separated, single.Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE), second quarter, 2009.

Men and women unemployment rates: comparisons by age groups

Total 14 - 19 years old

20 - 29 years old

30 - 39 years old

40 - 49 years old

50 - 59 years old

60 and more0

2

4

6

8

105.4

0

9.6

9

7.7

2

4.2

6

4.1

2

3.8

8

2.8

14.8

0

10.3

9

8.3

3

4.1

8

2.5

6

1.6

4

1.1

6

Men

Women

Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE), second quarter, 2009.

Men and women informal sector employment rates: comparisons by age

groups

Total 14 - 19 years old

20 - 29 years old

30 - 39 years old

40 - 49 years old

50 - 59 years old

60 and more

0

8

16

24

32

40

48

27.4

9

32.5

0

24.7

7

26.7

3

28.1

4

28.2

4

29.0

3

29.1

8

33.4

7

20.1

4

27.6

5

28.2

1

36.7

2 52.9

9

Men

Women


Senior citizen population by activity condition

Total Labour force Employed Unemployed Not in the labour force

Willing to work but not looking

for a job

0

2 000 000

4 000 000

6 000 000

8 000 000

10 000 000

12 000 000

10,597,500.00

3,544,424.003,461,936.00

82,448.00

7,053,076.00

1,136,022.00


Workplace relationships and intrinsic nature of work

Total Men Women Total Men Women Total Men WomenShare of labour force who have quit a job because have been harassed at

work

Share of labour force who have quit a job because conflicts with a boss or

superior

Share of the labour force who have quit a job because discrimination at work

0.00

0.20

0.40

0.60

0.80

1.00

1.20

0.09 0.04 0.16

0.820.93

0.64

0.16 0.150.19

0.09 0.06 0.13

0.991.07

0.85

0.16 0.140.21

I quarter 2006

I quarter 2009

Labour force who have quit a job because have been harassed at

work

Labour force who have quit a job because conflicts with a boss or

superior

Labour force who have quit a job because discrimination at work

Total Men Women Total Men Women Total Men Women

I quarter 2006 37 551 11 602 25 949 356 339 253 300 103 039 70 355 39 866 30 489

I quarter 2009 38 791 16 645 22 146 447 252 303 740 143 512 73 547 38 623 34 924

Source: INEGI, STPS, Encuesta Nacional de Ocupación y Empleo (ENOE), first quarters, 2006 and 2009.

Indicators that may have an unmistakable meaning but in need of a more precise

definition


a) Public Social security expenditure as share of GDP

6. Skills development and life-long learning

b) Share of employed persons in high skilled occupations

Public social security expenditure as share of GDP 1994-2008

Source: Cuenta de la Hacienda Pública Federal: SHCP y Poder Legislativo Federal.

1994199519961997199819992000200120022003200420052006200720080.0

0.5

1.0

1.5

2.0

2.5

Share of GDP

1994199519961997199819992000200120022003200420052006200720080.0

3.0

6.0

9.0

12.0

15.0

Share of programmed public expenditure

YearShare of

GDP

Share of programme

d public expenditur

e

1994 1.1 6.8

1995 1.1 7.8

1996 1.2 8.1

1997 1.5 10.0

1998 1.5 10.5

1999 1.9 13.4

2000 2.1 14.4

2001 2.0 13.8

2002 2.3 14.8

2003 1.9 11.8

2004 2.0 12.3

2005 1.9 11.6

2006 2.0 11.9

2007 2.2 12.5

2008 1.9 12.0

Indicators with an ambiguous meaning


a) Percentage of employed who are unincorporated self-employed

5. Social dialogue and workplace relationships

a) Average number of days not worked due to strikes and lockouts

6. Skills development and life-long learning

a) Share of employed who have less education than is normally required in their occupation

Percentage of employed who are unincorporated self-employed

0%

20%

40%

60%

80%

100%

12.9

64.4

22.7Farm, non incor-porated enter-prises

Non-farm, non in-corporated, informal enterprises

Non-farm, non in-corporated, formal enterprises

Self employed

23.0


Priorities under Mexico’s perspective

The indicators profile or properties in the proposal that seems to be more relevant for the Mexican experience are both those amenable to macro economic analysis besides those related with fairness and inequality.

The first category encompasses eight indicators distributed in dimensions 1,2,3,4 and 5. They matter not because they say something more profound or detailed on how Mexican labor markets once under stress are adjusted but also because say something else on respect the performance of the of the well fare institutions, their limited scope, and the tensions due the financial conundrums they are immersed.


The second analytic category (indicators unmistakably linked with fairness and equity) encompass twelve more indicators concentrated in dimensions 1 and 7. They are also a priority because their self evident relevance plus international commitments in order to deal with these issues (such a child labor, gender perspective) and honor treatises on this regard.

So both analytical categories adds without duplication 20 indicators covering all dimensions but the six one. This can amended if an indicator such as the share of employees who received job training is included; an issue that perfectly fits in either category despite there is not still available data on this regard in Mexico (it will be in the incoming months).


Those indicators tending to follow their own inertia or in need of more precise definitions would be priority two. Of those Mexico can produce 5 indicators are identified as such belonging to dimensions 2, 3, 4, and 6.

Those indicators for which the interpretation seems to be heavily dependent on a given context wouldn’t be included because they can be misleading: for example in the midst of an economic crisis may suggest an improvement when it might not be the case. To this category ought to be added those other indicators which meaning could be controversial.

Summing up:

In the proposal we identify 20-24 indicators distributed all over the seven dimensions worth to focus on as the first stage in consolidating this effort. This is so beside any possibility that a multivariate statistical technique could reduce even further this set of indicators.

Suggestions on the initiativeConcepts missed:

Economic risk (Economic Exposure).- It my help to unified some indicators already there in the proposal with other concepts such as informal employment in its wide sense (as it is understood by the XVII ICLS, 2003) or in any case to pay more attention to independent workers as well pseudo independent workers.

Indicators worth to be considered (a matter of emphasis)

Real wages ( i.e. minimum as well average)

Pensions (i.e. average pension proportion on respect poverty lines)

Senior citizens and labor force not far away of that condition (i.e. individuals 60 years old on willing to work but discouraged to intent job seeking)

Quality of services provided by social security (i.e. complaints on health care services guaranteed by a labor relationship). Gaps between the Jure and the Facto labor rights.

THANKS THOSE WHO REMAIN AWAKE!

MEXICO’S REPORT ON THE QUALITY ON EMPLOYMENT UNECE/ILO/EUROSTAT Seminar, October 14-16, 2009.

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Transcript of MEXICO’S REPORT ON THE QUALITY ON EMPLOYMENT UNECE/ILO/EUROSTAT Seminar, October 14-16, 2009.