Guest Column
Mexico reports job boom
Mexico reports job boom
Almost 950,000 added this year as economy expands.
- By Marla Dickerson
- Los Angeles Times
MEXICO CITY · December 7 2006 - olitical strife and drug violence have overshadowed perhaps the most stunning news out of Mexico this year: The nation is creating jobs. Lots of them.
Thanks to a healthy service sector, a strong housing market, rebounding manufacturing -- and some election-year pork -- Mexico has added nearly 950,000 jobs through the first 10 months of the year, recent government figures show. It's the first time in at least a decade that the country has come even close to adding the 1 million positions needed annually just to keep pace with the growth of its working-age population.
The performance was a small victory for the
administration of just-departed President Vicente Fox, who failed miserably
in his quest to see 6 million jobs created during his tenure. The country
added 1.4 million jobs since he took office in December 2000, less than
one-quarter of his target.
But one solid year probably will do little to stem the flow of illegal
immigration to the United States, and some analysts doubt that the hot
streak can continue. More than half the jobs created this year in Mexico
were in temporary posts in sectors such as construction. Cyclical industries
such as manufacturing are expected to slow along with the U.S. economy.
Still, the surge has been a godsend to laborers, including Sergio Martinez
Beltran, a former field hand from the southern state of Chiapas who has
found steady work in the capital's booming construction sector. The laborer
makes $110 for hoisting cement bags six days a week. It's backbreaking, but
he is grateful to get a reliable paycheck to support his wife and three
children back home in the countryside.
"One job ends ... and there's another," said Martinez, 32, taking a break
from his duties on an apartment building in the upscale Polanco
neighborhood. "Our hope is in God that it can continue this way."
The strong data lend momentum to Fox's replacement, Felipe Calderon, who
vowed to be Mexico's "jobs president."
Calderon has his work cut out for him. A divided Congress will make it tough
to implement changes many analysts say are crucial to generating more jobs
and keeping more Mexicans at home. With oil prices down from their lofty
levels of the summer, Mexico's treasury might have to tighten its belt. The
underground economy of off-the-books day laborers and street vendors remains
Mexico's primary job engine.
"This isn't going to last long," said Alfredo Coutino, senior economist at
Moody's Economy.com in West Chester, Pa. But, "job creation in Mexico is
always good news."
Mexico is enjoying an economy unlike anything it has seen in years. Core
inflation and interest rates remain relatively low. The peso is stable. High
oil prices have left tax coffers flush with extra cash. The economy is
projected to expand about 4.5 percent this year, the best showing since
2000.
A welcome byproduct of that economic strength has been expanded employment
in the so-called formal sector, defined as on-the-books, salaried jobs with
benefits. The government estimates that figure by tracking the number of
workers whose bosses register them with the nation's social security system.
Services and retail have performed well this year, but one of the most
watched industries is manufacturing. Although Mexico's export factories have
been battered by stiff competition from Asia, the sector has rallied this
year, adding nearly 77,000 jobs through August, government figures show.
Mexico's construction trade is bustling as well, thanks in large part to a
campaign promise Fox was able to keep: turning 3 million working-class
Mexicans into homeowners since 2001.
Analysts say Mexico's economy is already showing signs of slowing from the
robust 5.1 percent pace of the first six months of the year.
Mexico City construction worker Jose Lopez Perez hopes the building boom
doesn't fizzle before he can finish his own house.
"Our supervisor has told us there is a lot of work next year," said Lopez,
27. "This is what I hope. ... I live with my parents right now, and I want
to leave.
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