This Monday, Mexico’s private sector closed ranks, insisting that now is not the time to cut the workday from 48 to 40 hours a week, as they believe. “Now is not the time to increase company costs” although they acknowledged that this change is inevitable and is part of the Mexico-US-Canada Treaty (T-MEC).
“Now is not the time (to reduce working hours in Mexico), we would deprive investment of the attractiveness, now that companies are coming (to the country), we are going to motivate them,” Francisco Cervantes, President The Business Coordinator (BCO) of the leading organization of private initiative in the country.
In this sense, he noted that Mexican workers are demanding higher wages, which is why he recalled the latest agreement to raise the overall minimum wage by 20% by 2024.
He added that the country needs competitiveness and productivity for the country to benefit from the movement of supply chains and companies to Mexico, a phenomenon known as “proximity.”
Shortening the working day, part of T-IEC
For her part, the President of the National Chamber of Processing Industries (Canasintra), Esperanza Ortega, said that these changes are inevitable as they are part of the agreements signed by Mexico in the T-MEC.
“We, industrialists, do not refuse this reduction (of the working day), we know that this is part of the T-MEK agreements, such as the issue of trade unions, the (extension of) vacations, the (increase in) wages.”
However, he felt that the implementation of this reform would mainly affect small and medium-sized companies (SMEs) as they would have to bear the costs.
The President of the Confederation of Chambers of Industry (Concamine), José Abugaber, agreed with her and stressed that this legal change may destabilize the country’s economic growth and the rise of nearshoring.
“I don’t think now is the time, I believe legislators will look into this well because there is no manpower and it is difficult at the moment,” he added.
Increased competitiveness
The President of Kanasintra estimated that to compensate for the reduction in the workforce, it is necessary to increase productivity in industries.
For this reason, he believed that this productivity “needs to increase by 10 to 20%” so that it can offset the costs that companies must absorb due to the reduction of their employees’ working hours.
At the same time, the President of the Confederation of Employers of the Mexican Republic (Coparmex), José Medina Mora, also considered that “now is not the time to increase the production costs of companies, especially the smallest ones,” as he explained that this year alone there have already been three policies that lead to increased costs companies.
This includes pension reform, an increase in the amount Mexican workers receive upon retirement, as well as legislative changes to increase vacations and the recent increase in the minimum wage by 20%.
“We have a serious problem of low labor productivity in Mexico, our productivity is only 30%,” concluded Medina Mora. EFE
Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
