Economic Growth and Industrial Policy in Mexico
Cuauhtémoc Calderón and Isaac Sánchez
SLOW GROWTH, (UN) EMPLOYMENT AND INSUFFICIENT GROWTH IN MANUFACTURING ( ...continuation )

On the other hand, as a result of slow growth in production, the jobs generated each year from 1982 to 2010 have been insufficient to meet demand. In spite of constant discussion in favor of creating more jobs, the results show that no government during the period under study has been able to meet this basic economic need. Table 1 shows that jobs have been lost each year, rather than been created. Such has been the case for the private sector in 1982, 1986, 1995, 2001, 2003, 2008 and 2009 and for the public sector in 1992, 1993, 2001, 2002, 2003 and 2005.

On average annually, 274,106 jobs were created from 1982 to 1987 in the private sector and 152,793 jobs in the public sector. From 1987 to 1993 job creation in the private sector increased but reduced drastically in the public sector. From 1994 to 2000, the average number of jobs in the private sector was 419,859 and 47,702 in the public sector. For the period 2000-2008, employment mainly stagnated, an average of 144,823 jobs being generated each year in the private sector, 22,084 in the public sector, and 166,907 in the formal sector as a whole. The question is this: what will happen to all the Mexicans who join the economically active population annually? Many are highly likely to join the migration lines to the United States. Others form part of the informal economy, the underemployed, and of course turn to delinquency, or remain alone or in organized or casual groups.

Table 1 also shows how the job supply in the public sector has gradually been reduced, which can be interpreted in different ways. On the one hand, this may be the result of greater efficiency. On the other hand, this means that the informal economy does not have a compensation mechanism to generate the necessary jobs in a private sector which is losing momentum. Thus the population turns directly to the informal economy or to migration. 15

In 2009, as a result of the financial crisis which began in the u.s.a., more than 433,000 jobs were lost in the private sector, the majority in the manufacturing and services sectors. None of these jobs were recovered quickly. In fact, in 2010 only 323,000 jobs were created. If to this, the number of people reaching working age is added, the result is an estimated deficit in the job market of over a million people.

Employment in Mexico is highly volatile and growth of output is insufficient to meet the needs of people joining the job market each year. The consequence of this stagnation is that the job market is deteriorating, which is associated with a lack of growth in the manufacturing sector, among other factors. 16

The increasing precariousness of employment, especially in the last ten years, is shown in Table 3. While in 2000, the population employed in the informal sector and under-employed (precarious employment) was more than 13 million people, for 2010 the estimate is a little more than 19 million people, of which 518,448 were underemployed in the manufacturing sector. Underemployment in this sector dropped from 20.9% of the total in 2000 to 13.1% in 2010. The figures show a process beyond stagnation in terms of employment, a critical phase of unemployment, underemployment and informality. 17

15 According to Conapo’s five year migration data, 1,865,312 migrants went to the u.s.a. to work from 1987 to 1992; 1,952,459 from 1992 to 1997 and 2,474,222 from 1997 to 2002. While in 2001 there were 24 million Mexicans in the u.s.a., in 2010, there were 32.2 million.

16 According to imss, there were 15 million formal workers registered in July 2011, only a third of those employed in this country benefitting from the social services offered by this institution. The little employment generated is of poor quality and does not contribute to strengthening the domestic market to bring about virtuous cycles of accumulation.

17 According to inegi, there were 13,385,674 Mexicans employed in the informal sector in the second quarter of 2011. According to Murayama (2012) inegi has underestimated informality and believes that informal employment reached 26 million people in 2010, 59% of the occupied population.