Saturday, July 20, 2024

In a month and a half, 753,000 formal sector jobs lost due to coronavirus

The coronavirus crisis has dealt a heavy blow to employment: Mexico shed more than 750,000 jobs in a period of just one and a half months between the middle of March and the end of April.

According to data from the Mexican Social Security Institute (IMSS), 198,033 formal sector jobs were lost between March 13 and 31 and a record 555,247 disappeared in April. All told, 753,280 people lost their jobs in the seven-week period.

The loss of jobs last month was nine times greater than in April 2009 when the swine flu pandemic was in full swing and just over 60,000 people were laid off.

Almost 106,000 jobs were lost in Mexico City last month, Nuevo León shed 53,000 and 45,000 disappeared in Quintana Roo. Between 20,000 and 40,000 jobs were lost in seven states: Jalisco, México state, Guanajuato, Baja California, Veracruz, Sinaloa and Querétaro.

Data also shows that 2.2% fewer formal sector workers are registered with IMSS than a year ago, the biggest annual decline since 2009. States that are heavily dependent on tourism recorded the biggest year-over-year employment declines.

Formal sector jobs fell by 18.1% in Quintana Roo, 10.8% in Baja California Sur and 6.3% in Guerrero. Only six of Mexico’s 32 states – Tabasco, Campeche, Michoacán, Colima, Chiapas and Aguascalientes – recorded employment increases in the year to the end of April.

The construction and mining sectors have recorded the biggest job losses due to the coronavirus pandemic, IMSS data shows, but both were declared essential on Tuesday, meaning that workers who were laid off could be soon rehired.

In addition to the job losses, IMSS reported that the number of companies on its books decreased by almost 7,000 in April compared to the month before.

Analysts at Banorte said in a note that most businesses “probably suspended work or closed completely” due to the coronavirus pandemic and consequent economic downturn.

David Kaplan, a senior labor market specialist at the Inter-American Development Bank, said it is likely that there will be more job losses this month but predicted that the number won’t be as high as in April.

Jesuswaldo Martínez, a researcher at the Senate’s Belisario Domínguez Institute, said that further job losses in May are inevitable but he too predicted that they won’t be as high as those seen last month.

By the end of the year, about 1 million people registered with IMSS will have lost their jobs, he said, predicting that if GDP falls by more than 7% this year, the hit to employment will be even greater.

“The International Monetary Fund says there could be 1.5 million [job losses], including people in the informal sector,” Martínez said.

Source: El Financiero (sp) 

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