The informal sector rules in Mexico

Frontera NorteSur

Released this month, the latest numbers from Mexico’s Institute of Geography, Statistics and Informatics, INEGI, showed job creation in the informal sector outpacing that in the formal sector. The Mexican government agency defines formal employment as constituting a job with retirement and other benefits, including enrollment in the Mexican Social Security Institute, IMSS.

According to INEGI, nearly 13,439,000 workers labored away in the informal sector in September 2011, compared with 13,225,433 people registered in the formal sector during the same time period examined. The number of people making a living without chalking up retirement and other benefits rose more than 500,000 since September 2010, when 12,904, 903 workers were classified as informal.

The number of workers entering the IMSS system also registered an increase, albeit slower than in the informal sector, growing by 450,719 people between September 2010 and September 2011.

In Mexico, people working in the informal sector earn a living by doing everything from selling so-called pirate products on the street to entertaining motorists by breathing fire at busy intersections. To put food on the table, they sell food door-to-door, work for tips off the books and hawk dolls on the beach.

While such activities bring in primary or secondary incomes, they do not build up the retirement system or support other programs funded by taxes.

In its recent compilations of employment trends, INEGI reported both job creation and loss. According to the agency, the overall number of people employed in the Mexican economy grew by 853,778 to reach 46,815,997 workers during the one-year time period in question. Nonetheless, the number of potential workers officially categorized as unemployed also increased from last year to this year, constituting a total of 2,761,703 unemployed people by the third trimester of 2011.

In terms of wages, INEGI reported that 35.5 percent of the labor force earned no more than 119.6 pesos per day, or less than $10, while 61.5 percent of workers brought in on a daily basis no more than 179.4 pesos, an amount less than $14 based on current dollar-peso exchange rates.

Source: La Jornada, November 12, 2011. Article by Roberto Gonzalez Amador.

Frontera NorteSur: on-line, U.S.-Mexico border news
Center for Latin American and Border Studies
New Mexico State University
Las Cruces, New Mexico

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