Mexican Workers Struggle with Lack of Benefits

Of Mexico's 48,200,000 workers, 23,400,000 work in businesses
Photo: Cuartoscuro

CNN Mexico: Mauricio Torres

Translated by Latisha Hicks

Rey Alejandro Román has had his own business for the past five years. When he found out he was going to have a child, he utilized his savings to open an Internet cafe San Vicente Chicoloapan, a town in the state of Mexico. Since then, he has maintained his family with the money the establishment generates.

Román says that working independently has advantages in comparison to being an employee, like not having to deal with pressure from a boss or what days to work or not. However, he admits that it also entails negative aspects. Among those, is that he cannot count on benefits like social security [health insurance and pension], holiday pay or bonuses.

"Nobody gives me vacations. If I want one, I don't open for a week or two, but it's time that I'm not going to generate money. And when December comes, well what annual bonus?" He says.

Like Román, 31, more than half of Mexican workers labor without benefits according to the National Institute of Statistics and Geography (INEGI).

At the close of 2012, the country had 48,200,000 workers. Of those, 63% lacked access to social security institutions [which include government health clinics] and 54% couldn't rely on benefits or productivity bonuses, indicated the National Survey of Occupation and Employment, produced quarterly by INEGI since 2005.

This sector is composed of both those who work for themselves formally and informally, as well as close to half of those who are hired on contracts by businesses or public institutions.

Amapola Romero is an example of the second group. A dancer and student of choreography, in mid-2012 she was hired to teach music classes at a daycare facility of the Secretariat of Social Development (Sedesol) in the southern Federal District [Mexico City].

Romero, 26, receives a weekly salary to teach four groups, but parts of Sedesol don't get access to social security or other benefits.

"I believe this is wrong. Bonuses are not only helpful in purchasing equipment and things like that, but they are an incentive to work," she says.

A Constant Problem

The percentage of workers without benefits has remained constant since 2005. The people without social security, for example represent between 62% and 64% across the board.

Mortitz Cruz, an academic from the Institute of Economic Rsearch at the National Autonomous University of Mexico (UNAM), explains that the situation is that businesses are looking for ways to reduce costs, but moreover, it's that the country's level of growth doesn't permit the creation of a sufficient number of formal jobs.

On average, from 2008 to 2012, Mexico only grew 1.72% annually, according to data from Banco Mundial (BM).

Finding no space in the formal economy, one can opt for self-employment, work for fees or in the informal economy, or one can migrate abroad.

Cruz says that those who work for themselves have a variable income, so that eventualities like illness or an accident can have a serious affect.

"The instability of income, coupled with a lack of benefits, becomes a pressing issue in terms of poverty," he states.

In respect to this, Román comments that he is conscious that his business can have bad months, and therefore seeks to carefully administer the money.

"You have to learn to divide the pesos. You have your costs and you have to cover them. It could go well or badly," he says.

The Alternatives

For Román, one if the principle difficulties of not having benefits is the lack of health insurance.

In his case, when someone in the family is sick, they visit a commercial clinic or a private physician depending on the gravity of the ailment. If it is a minor problem like a cold, the consultation usually costs between 30 and 40 pesos (from $2.50 to $3.30); in addition, there is the cost of the medication. However, the figure increases if they must visit a specialist.

During the administration of Vincente Fox (2000-2006), the federal government created a system known as Seguro Popular [Popular, i.e., Peoples Insurance], with the objective of offering medical coverage to individuals that aren't beneficiaries of the Mexican Institute of Social Security (IMSS) or of the Institute of Security and Social Services for State Workers (ISSSTE).

Román knows that he has the option of affiliating with Seguro Popular, but he believes the process is complicated. He says that in his area, those interested must arrive at the clinic four hours early to obtain a card and be seen, if this doesn't happen you have to come back another time.

In contrast, Romero says that she has received adequate attention when she opted for Seguro Popular. She joined before the birth of her son, when she lived in Xalapa, Veracruz, where she received prenatal care and gave birth.

The government of Enrique Peña Nieto has set as one of its principle goals of its administration (2012-2018) to achieve universal social security coverage; however it states that to achieve this, it needs the approval of a tax reform that generates resources for the state. It is envisioned that discussion of this will commence in Congress during the second half of 2013.

The president has also promised to achieve an annual economic growth of 6%, which he claims will allow the creation of one million jobs in a year. Spanish original