Informal Economy in DF is Growing Dramatically
 Magnolia Velázquez - The News
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December 04, 2009
| | More than 1.05 million people in the capital city make their living by selling goods and services from their house, door-to-door, on the streets, outside formal businesses and even from their cars. (Mario Nulo/Cuartoscuro) | |
Due to high levels of unemployment in Mexico City, the informal economy has grown dramatically, the secretary of Labor and Employment said Thursday.
More than 1.05 million people in the capital city make their living by selling goods and services from their house, door-to-door, on the streets, outside formal businesses and even from their cars, according to Benito Mirón Lince.
This phenomenon, he said, spans across all economic sectors. Half of the informal economy is made up of women, or just over 400,000.
A recent report from the American Chamber of Commerce in Mexico showed that nine out of 10 Mexicans buy pirated goods, causing more than 964.69 billion pesos of losses to the economy.
Mexico City´s unemployment level is at 8.7 percent and will continue growing, Mirón said.
Nationally, unemployment grew to 6.5 percent in October, up from 6.41 percent the previous month. In October 2008, 4.11 percent of Mexicans were jobless.
Last month, the Center for Economic Studies on the Private Sector (CEESP) released a report highlighting that the informal market employs about 28 percent of the country.
The report criticized policies and laws passed in Mexico, saying they unwittingly fuel the informal economy. Higher taxes create an obstacle for many people and businesses, making illegal sales a lucrative and cheap alternative, the CEESP said, and an easier way to avoid paying taxes.
The CEESP estimated that the informal market represents 12.4 percent of the Gross Domestic Product.
Just two weeks after the report was released, Congress passed a series of tax reforms that will increase sales, income, telecommunications and cash-deposit taxes, among others.
Speaking at Thursday´s Forum for Women´s Rights and Respect in the Workplace, Mirón said that in Mexico City, 60,000 unemployment insurance pay-outs will be given out by the end of this year. The secretariat requested, and is going to receive, a 50-million peso increase to its budget amid growing unemployment.
Of the unemployment pay-outs, 55 percent will go to women, who have been the most affected, he said.
Mirón went on to say that it is common for women to be harassed at their workplaces, even before they are hired; some employers require HIV/AIDS and pregnancy tests before hiring.
Other times, some bosses ask female employees to work overtime or for sexual favors to earn higher salaries or promotions, Mirón said. On some occasions, he added, women have to "put up with" abusive bosses in order to keep their job.
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