Economics: Labor market data outlook
The Covid-19 pandemic has taken a terrible toll not only on employment but also in the means to precisely record it. The most comprehensive source of information on the Mexican labor market is the National Survey of Occupation and Employment (ENOE), a nationwide face-to-face poll conducted monthly and quarterly. But because of the restrictions implied by Covid-19, for the time being the National Statistics Institute (Inegi) has been forced to depend on a revised ENOE conducted by phone, as it has for its consumer confidence polling. The results of this first ETOE were released the week before last, and while the data may not be comparable to that of the ENOE, it offers a rough idea of the depth and breadth of the number of people who have lost their incomes, those pushed further into conditions of underemployment, and the future challenges they pose for the economy.
It also confirms that a major part of the population that lost its income source was already in the low wage segment, and given that there is no counter-cyclical policy of government transfers for this population group, which typically has low levels of savings and lacks any alternative income sources, a big rise in poverty levels is expected in the coming months, without an outlook for recovery in the near future.
The ETOE shows 12.5 million people lost their earned income in the course of April, and that pandemic-related activity suspensions meant that all but about 300,000 of those were unable or unwilling to look for work and were thus immediately erased from the ranks of the economically active population (PEA), meaning that their loss of jobs had no effect on the jobless rate for the month.
Social security data shows that 838,300 formal sector workers on payroll have lost their jobs so far this year, with almost 500,000 of those corresponding to April, and 338,300 to May. The vast majority of the 12.5 million who lost their jobs were not the usual payroll employees of IMSS data but people from other quarters such as public sector employees, and possibly more troubling for the economy’s future, many self-employed and owners of small businesses who may not be able to open up again because of a lack of liquidity in a process that entails a destruction of assets that will take a long time to overcome. Given the specific characteristics of the current economic crisis, the informal economy could not absorb the newly jobless, as it has in past recessions and slowdowns.
Now read on...
Register to sample a report