This week our colleague Agathe Vigne returns with some observations on the proposed labor reform currently working its way through the Mexican Congress.
October 2 is the occasion for Mexico to remember the Tlatelolco massacre that took place during the 1968 student demonstrations in the Plaza de las Tres Culturas in Mexico City. Each year on this date, Mexican students, non-government organizations and most unions meet up and use the anniversary as an opportunity to voice their political viewpoints during a well-covered march around the city.
This year, most debates concerned the labour reform that will be discussed in the Mexican Senate over the coming weeks.
To summarize the reform’s main points:
– The law condemns all kinds of discrimination and gives a specific definition of workplace harassment,
– The law gives rights to domestic workers, and facilitates maternity and paternity leaves
– The law strictly defines subcontracting. Outsourcing “can not be realized in the substantive activities that constitute the enterprise’s main object” and it “should be justified by its specialized character that adds an input to the processes of production or services” (article 15).
– Hourly payment is made legal, with a minimum set at 7 Mexican pesos per hour
– Different types of contracts have been created by the new law: 6-month contracts for employment trial, temporary contracts or contracts requiring initial training (articles 35 and 39)
The project’s main defenders have argued that the law would allow for informal-sector workers (almost half of the working population) to gain access to social safety net protections, making it easier for employers to formalize their situation. It should also allow Mexico to gain competitiveness, after the World Economic Forum ranked it 53rd out of 144 countries in its yearly report.
However, the reform has created an uproar among unions and civil society organizations. The “Frente Legislativo” (Legislative Front), an alliance of the country’s leftist political forces, seized the Congressional presidium to protest the reform and issued a list of 261 points of contention regarding the proposed text. Critics concentrated on the uncertainty of the new contract schemes and the institutionalization of Mexico becoming a “subcontracting” country with a cheap labour force.
Despite claims that the reform is needed to improve competitiveness and boost growth, some observers are questioning whether the reform will really change anything for the Mexican economy and the relationships between workers and employers. The Economic Commission for Latin America and the Caribbean (ECLAC) argues that the reform will not create new employment. Though it might help formalize some jobs, the positive impact is difficult to calculate.
On the other hand, as currently written the reform does not weaken union power or increase the transparency of union finances. Furthermore, in terms of competitiveness, and according to the World Economic Forum’s report, Mexico’s priority should be to reinforce its institutions and fight against corruption and insecurity.