If more movement is observed in the street and an economic reactivation is perceived, why are there no jobs? The question is valid for 4.1 million people who are actively looking for job opportunities, 642,334 more than there were before the pandemic, according to the National Survey of Occupation and Employment (ENOE).
The causes of unemployment in Mexico they are due to various factors, one of them is that in almost two years the labor market was in a process of recovery and although the employment level that was reported prior to the impact of the pandemic is already they created enough jobs to satisfy the growth of the Economically Active Population.
“We have a hangover from unemployment. We have a excess unemployment because although economic activity has been recovering, it has not yet recovered the level of economic activity that existed before the pandemic and, on the other hand, although employment has recovered strongly, we still continue with a deficit ”, explains Marcelo Delajara , Director of the Economic Growth and Labor Market Program of the Espinosa Yglesias Studies Center (CEEY).
In this sense, the specialist explains that during the recovery period after the initial impact of the pandemic, the working-age population has continued to grow, but the labor market has not generated opportunities for them.
“The working market it has not absorbed all the employment necessary to attend to population growth in the last year ”, points out Marcelo Delajara.
It took the job market 16 months return to the level of occupation it had in March of last year, the month before the drastic fall in employment due to restrictions on non-essential economic activities to stop the contagion of covid-19. The latest figures from the ENOE indicate that the employed population is 731,837 more people than it was before, but there are also 2.3 million additional people in the population over 15 years of age, considered as potential to enter the labor market.
“We have already returned to pre-pandemic occupancy levels. However, there are more people. We did not reach the trend (of job creation) that we had before. The level recovered is proportional to the population at the beginning of 2020, but we are already more. If there are the same Job positions, there is more competition for each one of them ”, comments Jesús Carrillo, director of Sustainable Economy of the Mexican Institute for Competitiveness (IMCO).
For the specialist, another explanation why high levels of unemployment persist in the country is because the recovery has taken place unevenly in the states and because the service sector, the main engine of employment, still lags behind in some lines .
The weakness of the labor market and the lack of opportunities for those who have joined the job search It is also explained by the behavior of the Gross Domestic Product (GDP). Despite the fact that Mexico had a strong contraction in 2020, economic growth until the third quarter of 2021 has not been able to compensate for this drop, explains Adriana García, director of Economic Analysis of the organization ¿México ¿qué Vamos?
“It is one thing that we see movement in the street, that we find traffic or that the IMSS registry is returning to the same number of Job positions, but this does not mean that we are in the same conditions as before Covid-19 “, emphasizes the specialist.
The crisis of inactivity
In normal times, the unemployment rate moves due to natural flows in the labor market, that is, people who go from employment to unemployment and vice versa. However, in the current context, movements in the unemployment rate are due to the fact that people who lose their jobs stay in search of a new position or go into inactivity, explains Marcelo Delajara.
“In bad times the flow is the other way around, the group of employees leave people who go to unemployment or inactivity and, therefore, the level of unemployment increases,” he points out.
In Mexico, inactivity covers 7.5 million people, 1.6 million more than those who were in this condition before the pandemic. Those also classified as “discouraged” are the population made up of those who do not have a job and are not looking for work, but would accept one if offered. This reflects the adverse environment that is perceived to join a work activity.
The International Labor Organization (ILO) has warned that the pandemic may generate a crisis of inactivity deeper than unemployment itself. Migration from inactivity to employment is often more complex.
“Previous crises have shown that the ‘activation’ of the situation of people who were previously inactive is more difficult than re-employing people who have lost their jobs, hence the existence of high rates of inactivity could make job recovery even more difficult ”, warned the multilateral organization.
From the perspective of Jesús Carrillo, one of the most worrying aspects in the recovery of the labor market is the labor gap, an indicator that concentrates the unemployed, inactive and underemployed workers (those who work reduced hours). This rate reflects the need for employment in the country.
The labor gap registers 3 million more people than it covered prior to what was observed before the health emergency and its current level is largely due to the rate of inactivity and underemployment. In sum, 15.6 million people have a job need under this measure.
“These people are the ones who are struggling in the aggregate, because they do not have a job or are out of the workforce, particularly women, or they are people who found a job, but it is not enough, they are underemployed and need more hours of work. work ”, says the IMCO specialist.
Other indicators of unemployment
Traditionally, unemployment in Mexico is reported through the unemployment rate, which includes people who do not have a job, but are actively looking for a job opportunity. The rate stands at 3.6%, the lowest in the pandemic so far, but it took 21 months to return to those levels.
But this is not the only indicator of unemployment. The “available” of the Non-Economically Active Population (PNEA), a group made up of those who do not have a job, but are not looking for a job, also reflects unemployment in the country. In this condition there are still 1.5 million peoples more than those reported before the health emergency.
There is also the extended unemployment rate, which is obtained by adding the unemployed and the inactive. In November, this indicator stood at 14.65% after decreasing 0.28 percentage points with respect to October. Despite this, it is far from the 11.98% that was observed in March of last year.
Finally, an indicator that helps to measure competence in job search is the General Pressure Rate, which concentrates active people in search of a job opportunity, this is located at 7.13% and represents 642,334 more people in this condition in the last 21 months of recovery.