Three million businesses and 28 million workers could be at risk if the federal government doesn’t support them through the coronavirus crisis, according to poverty-fighting nonprofit organization Oxfam México.
The nonprofit predicts that 3 million businesses classified as nonessential by the government will potentially be affected in the short term by the economic downtown caused by the coronavirus pandemic and the measures put in place to limit its spread.
According to 2019 economic data, those businesses generate an annual economic spillover of 1.2 trillion pesos (US $49.5 billion), Oxfam said.
The report also predicted that 28 million workers employed in nonessential sectors could be at risk of losing their jobs or not making enough money to support themselves. The figure accounts for approximately 47% of Mexico’s entire labor force.
Of the 28 million workers at risk, 10 million already live in poverty as a result of low incomes, 16 million don’t have access to social security benefits and 5.4 million struggle to provide enough food for themselves and their families, Oxfam said.
As the figures indicate, some of the vulnerable workers – 85% of whom live and work in urban areas – are afflicted by two or three of the predicaments.
In light of the situation, Oxfam said the government needs to provide financial support to businesses so that they can maintain their workforces and keep employees registered with the Mexican Social Security Institute. For those who live day to day and don’t have access to social security benefits, the government should pay them a basic income during the crisis to cover essentials, the organization said.
Oxfam said that supporting businesses and providing a basic income for informal sector workers would cost less than 2% of GDP but substantially reduce the impact of the coronavirus-fueled economic downturn.
Due to the high levels of poverty and inequality in Mexico, the Covid-19 pandemic is causing three simultaneous crises, it said: health, economic and social.
The health crisis continues to grow, with more than 15,000 people having tested positive for the coronavirus, while the economic crisis is predicted to cause a steep contraction in 2020.
The federal government intends to increase spending on social programs and infrastructure projects to stimulate the economy during and after the pandemic but has announced scant support for business, triggering criticism from business groups and analysts.
President López Obrador continues to insist that “it’s not like before” when such support was tainted by corruption.
Source: El Financiero (sp)
