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Mexico & Nafta - March 2018 (ISSN 1741-444X)

Unemployment figures don’t tell the whole truth

The Mexican government led by President Enrique Peña Nieto will leave office having created upwards of 3.5m new formal jobs in its sexenio (2012-2018), not far off the 4m target it had set. In wage cost terms, Mexico can also compete with – and beat – China. This should be good news for the ruling Partido Revolucionario Institucional (PRI) ahead of July’s general election. But the reality is that only 40% of Mexicans are formally employed, and these ‘lucky ones’ are putting in record long hours, in typically low-paying and unstable jobs. The remaining 60% of workers are still stuck in the informal sector, where they have no access to social security and, for the most part, are locked out of financial markets. And thanks to its low-cost wage model, Mexico’s productivity rates are bottom of global rankings.

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