A review of last year’s employment statistics resulted in Jalisco being crowned Mexico’s top job creation engine for 2017, logging 93,631 new jobs to knock the State of Mexico down a peg to number two and Mexico City to number three.
However, a closer look at the nitty gritty particulars of the state’s employment landscape reveals a more complicated picture.
Most business leaders in the state agree that chief among the industries that led to Jalisco’s employment coup are the electronics, agriculture and automative sectors. Other factors include the state’s vigorous export power, thriving tech industry, economic diversity, and the devaluation of the peso against the dollar (which attracts foreign investment).
But the rosy-hued panorama darkens a shade when salary levels are considered across the state’s economic multi-verse, something both the aforementioned members of the private sector and the government are busy reckoning with.
According to the Mexican Social Security Institute (IMSS), six out of every ten employees in the state earn 7,000 pesos a month or less. The number was presumably even lower before a raise in the minimum wage from 80 to 88 pesos a day was effected last year. However, the National Council of Social Development (Coneval) recommends a minimum wage of 92 pesos-a-day to keep workers and their families above the poverty line, and Daniel Curiel, head of the Jalisco Council of Industry Chambers, puts the minimum earnings to keep workers in the black at 150 pesos a day.
One possible reason average pay remains so low in Jalisco is that a large amount of employment is generated by foreign companies.
“Maintaining low wages is crucial to be able to compete on an international level,” said Jorge Barajas, director of CEREAL, a worker’s advocate organization based in Guadalajara. “Depending on foreign capital for employment is a dead-end street, because we’re powerless to improve its quality.”
State Governor Aristoteles Sandoval, meanwhile, considers the continued attraction of foreign investment to Jalisco essential to keeping employment on the rise. But he also stresses that employers here need to try harder to better distribute profits to all its employees.
“We’re trying to raise the awareness of companies on the importance of generating incentives, and training employees to raise salaries among their workers; if they do that, productiveness will rise and service will improve, for a greater benefit to all,” said Sandoval.
One welcome shift on Jalisco’s jobs graph concerns urban versus rural employment distribution. Most years, Guadalajara’s metropolitan area (ZMG) drinks up 90 percent of employment for the state, leaving a 10 percent nub for the rest of the state to chew on. This year, the ZMG opened its employment coffers a bit wider, bequeathing the rest of the state a 22-percent share of employment.
Further complicating Jalisco’s employment equation, already compromised by the question of wage levels, is a point made by Barajas, who stressed the importance of distinguishing between formal, informal and temporary employment.
“A good portion of the [employment] statistic is made up of jobs which already existed, but which hadn’t been formally registered with IMSS,” said Barajas. While that clearly skewed the numbers, he pointed out a silver lining.
“It’s actually positive, because now we have more formal, instead of informal, employment,” said Barajas, who further explained that official, registered employment entitles workers to medical insurance and a pension, something 50 percent of the population, being employed informally, does without in Jalisco.