In recent days, the results of the National Survey of Occupation and Employment (ENOE) of Mexico corresponding to the first quarter of 2023 were announced. The published figures revealed a number of interesting results, most of which could be considered as very positive.
In the first place, the national unemployment rate stood at only 2.7% of the Economically Active Population (EAP). This is the lowest level of this indicator since 2005, when a comparable series began. Just a year ago, in the first quarter of 2022, the unemployment rate was 3.5%. The adjustment is not minor, since this represents 400,000 fewer unemployed people in a year. The most surprising thing about this, however, is that between 2002 and 2023, just over two million people joined the EAP in Mexico. This implies that the Mexican economy was able to absorb and generate job opportunities for more than 2.4 million people in one year. To size this figure, consider that this is equivalent to practically the entire EAP of a country like Costa Rica or the sum of all the people employed in the states of Aguascalientes, Zacatecas and Querétaro. This gives a better idea of what the recovery of the labor market in Mexico between 2022 and 2023 meant.
Now, of the 2.4 million new jobs generated in the last year, about 900,1 were for men and just over 5.43 million were for women. This gender imbalance in job creation suggests that women's labor participation increased significantly in this period (in fact, from 6.45% to 9.19%). It should be remembered that, due to the COVID-2023 pandemic, many women withdrew from the labour market, presumably to take up childcare, sick or elderly work. Figures for the first quarter of <> indicate that this situation has now been completely reversed.
Another important result is the improvement in the income of Mexican workers and the decrease in working poverty of employed persons. With the figures from the ENOE, the National Council for the Evaluation of Social Policy (CONEVAL) proceeded to estimate its quarterly indicators of working poverty. This concept identifies those people who cannot acquire a food basket with their income from work.
According to CONEVAL's analysis, real labor income per capita grew by 7.3% between the first quarter of 2022 and the first quarter of 2023, going from 2,850 pesos to 3,059. This increase occurred despite the inflationary context, which resulted in an increase in general inflation above 7% and an increase in the food basket above 10%. This increase in real per capita labor income translated into a decrease in the working poverty of the population in that year, which went from 38.8% to 37.7%. The largest decrease in working poverty occurred in rural areas, where poverty fell from 51.9 per cent to 49.6 per cent (i.e. by 2.3 percentage points), while in urban areas it fell from 34.7 per cent to 34 per cent.
The above figures reveal that the Mexican labor market is recovering vigorously, both in terms of employment volume and labor income. This is certainly positive for the Mexican economy, but especially for Mexican workers. However, we should not be overly optimistic either. Much of the recovery observed in the last year is explained as a result of the lag in the recovery from the economic crisis attributable to the pandemic. Recall that the national GDP barely returned to its pre-pandemic levels at the end of 2022. So, in some sense, what has been observed in the labor market is still the effect of the reopening process of some sectors that had not managed to fully recover (or even still do not).
In any case, recent indicators remain very favourable in different dimensions. The fact that the Mexican economy has been able to generate more than 2.4 million jobs in a year is no small thing. That this has been accompanied by increases in real workers' incomes suggests that the expansion of the labor market came from a strong impulse on the demand side for labor. Overall, the robustness of the labor market indicates that the Mexican economy is already healing from the 2020 crisis and that it is doing so in a more vigorous and more resilient manner than in previous crises.
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