VZCZCXRO8576
RR RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL
RUEHQU RUEHRD RUEHRS RUEHTM RUEHVC
DE RUEHME #0467/01 0512041
ZNR UUUUU ZZH
R 202041Z FEB 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 5173
RUEHC/DEPT OF LABOR WASHINGTON DC
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS SECTION 01 OF 03 MEXICO 000467 
 
SIPDIS 
 
DEPT FOR DRL/AWH AND ILSCR, WHA/MEX, USDOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV SOCI PINR MX
SUBJECT: MEXICO FACES GRIM EMPLOYMENT OUTLOOK FOR 2009 
 
REF: MEXICO 0045 
 
¶1.  Summary: Although the year is just two months old, 
government officials, leading private sector figures and 
academics are predicting a grim employment outlook for Mexico 
in 2009.  According to the GOMQ,s National Statistics 
Institute (INEGI), by the end of 2008 official unemployment 
rate for MexicoQ,s formal economy was 4.32 percent; its 
highest level since 2000. Undoubtedly a good part of the 
reason for MexicoQ,s inability to generate jobs can be 
attributed to the worldwide economic slowdown.  This external 
fact is small comfort to MexicoQ,s job seekers and many 
Mexicans are looking to their government for some type of 
relief.  This figure however, is misleading since official 
figures make little distinction between fully employed 
persons, underemployed person or persons actively looking for 
work; all are counted as being employed.  Once these factors 
are taken into account the real unemployment rate could be 
three or four times as high as the official figures.   During 
his 2006 presidential campaign, then candidate, Felipe 
Calderon promised that if elected he would be the 
Q&Employment President.Q8  Partly in keeping with this 
promise President Calderon recently announced a new set of 
measures to help offset the impact of the global financial 
and economic crisis and stimulate the economy (Reftel) called 
"The National Accord in Favor of the Families' Economy and 
Employment".  As this new initiative was only announced on 
January 7, it is still too early to say how successsful it 
will be.  For now however, the countryQ,s poor job outlook 
for 2009 is a cause of serious concern for a broad spectrum 
of Mexican society.  End Summary. 
 
 
GOVERNEMNT FIGURES ACKNOWLEDGE BLEAK JOB OUTLOOK FOR 2009 
--------------------------------------------- ------------ 
 
¶2.  The global economic slowdown has hit Mexico and as a 
consequence the prospects for employment in 2009 are not 
good.  The Mexican governmentQ,s National Statistics Agency 
(INEGI) recently announced that signs of worryingly higher 
job loss were clearly visible by the close of 2008 when it 
placed MexicoQ,s official unemployment rate among 
economically active population (defined as workers age 12 and 
over) at 4.32 percent.  This figure however, is misleading 
since official figures make little distinction between fully 
employed persons, underemployed person or persons actively 
looking for work; all are counted as being employed. 
Moreover, based on recent OECD figures, at least 43-45 
percent of all Mexicans who are currently Q&employedQ8 work 
on the informal economy.  Once these factors are taken into 
account the real unemployment rate could be three or four 
times as high as the official figures. According to the INEGI 
announcement this was the highest unemployment rate the 
agency has reported since the year 2000.  INEGIQ,s harsh 
figures were supported by the Mexican Social Security 
Institute (IMSS) which reported that in the last two months 
of 2008 some 386,000 jobs were lost on MexicoQ,s formal 
economy.  IMSS authorities indicated that at least 193,000 of 
these jobs were in the countryQ,s manufacturing sector. 
 
¶3.  The grim employment outlook for 2009 was also indirectly 
acknowledged by two GOM cabinet level officials.  The first 
was Treasury Secretary Agustin Carstens who, while attending 
an event commemorating the 25th anniversary of the National 
Federation of Bank Employees Unions (FENASIB), stated that 
Mexico would not be exempt from the worst global economic 
crisis in a Q¢ury.Q8  Carstens opined that industrial 
production, consumer consumption, investment and employment 
would all be negatively affected in the first half of 2009. 
 
¶4.  The other cabinet member to speak about the hard times 
now facing Mexico with regards to employment and job creation 
was Secretary of Labor Javier Lozano.  While at the same 
FENASIB meeting as Agustin Carstens, Labor Secretary Lozano 
at first tried to put the best spin possible on MexicoQ,s 
employment situation.  According to Lozano, the Labor 
Secretariat (STPS) National Employment Service (SNE), a 
federally administered jobs bank began 2009 with 23,000 more 
registered job offers than job applicants.  However, he then 
had to acknowledge that within the first 20 days of January 
the SNE received 91,000 requests for job placement or other 
assistance and that by mid-2009 it expected to provide 
assistance to another 250,000 job seekers.  Days later the 
 
MEXICO 00000467  002 OF 003 
 
 
SNE itself provided a bit more detail on the growing numbers 
of job seekers by indicating that the states showing much 
higher than normal levels of unemployment were Chihuahua, 
Baja California, Tamualipas, Sonora and Coahuila. 
 
¶5. In an effort to address this situation President Calderon 
announced on January 7 a new set of measures to help offset 
the impact of the global financial and economic crisis and 
stimulate the economy (Reftel): "The National Accord in Favor 
of Families, the Economy and Employment. The proposal focuses 
on job creation, avoiding layoffs, pension protection, 
lowering electricity rates, helping small businesses compete, 
freezing gasoline and gas prices and boosting investment in 
infrastructure. In announcing the program Calderon 
acknowledged that Mexico faced a period of great difficulty 
and rising unemployment but stated that the fundamentals of 
the country were solid. 
 
 
PRIVATE SECTOR ALSO PREDICTS SIGNIFICIANT JOB LOSS 
--------------------------------------------- ----- 
 
¶6.  The harsh employment scene acknowledged by the above 
mentioned GOM cabinet officials was also commented on by 
leading figures in MexicoQ,s private sector.  At the end of 
January Ricardo Gonzalez Sada, the president of COPARMEX, one 
of MexicoQ,s largest employers associations, predicted that 
the businesses that formed the membership of his organization 
expected to lose over 150,000 jobs.  With this level of job 
loss the COPARMEX president said it would be difficult for 
member businesses to maintain their productive plant. 
Gonzalez SadaQ,s job loss predictions were echoed on a 
smaller scale by Luis Mahbub Sarquis, the president of 
CONCANACO, the Mexican confederation of chambers of commerce. 
 Mahbub Sarquis opined that MexicoQ,s services and tourism 
industries could expect to lose at least 30,000 jobs over the 
course of 2009. 
 
¶7.  For his part, Gonzalez Sada partly attributed anticipated 
job losses to a drop in sales as a result of reductions in 
consumer spending.  However, he also very pointedly 
criticized the GOM for not doing enough to support the 
private sector.  Gonzalez Sada urged the GOM to do more to 
create proper incentives for growth as a means of saving 
jobs.  He suggested that the government could start doing 
this by reducing both business and payroll taxes.  Ismael 
Plascenia, the President of the Confederation of Industrial 
Chambers of Commerce urged the GOM to quickly move forward 
with public works infrastructure projects as a way to 
stimulate economic growth and job creation. 
 
¶8.  Several major national daily newspapers quoted executives 
from large employment agencies as saying that the country was 
currently seeing a jobs Q&boomQ8.  Unfortunately, the boom 
was in the number of people seeking jobs and not in the 
number of jobs private sector companies were seeking to fill. 
 The director of public relations for Manpower Mexico said 
that nationally, thus far this year, her firm was seeing an 
increase in the number of job seekers of between 20-30 
percent over what it saw last year.  Another employment firm, 
Bumeran.com, reported that its on-line registrations for job 
seekers has seen a 35 percent increase over what it saw in 
the early part of 2009 over the figures on record for 2008. 
 
 
 
ACADEMIA WEIGHTS IN 
------------------- 
 
¶9.  Researchers at two of MexicoQ,s most prominent 
universities concur with the grim general assessment of the 
countryQ,s job outlook for 2009.   The National Autonomous 
University of Mexico (UNAM), a public institution and the 
Technological Institute of Monterrey (ITESM), a private 
university, have both predicted significant job losses for 
Mexico during the current year.  The more pessimistic 
forecast was made by researchers at UNAM.  During a recent 
press conference a professor at the UNAMQ,s Institute for 
Economic Studies predicted that Mexico could lose up to 
500,000 jobs this year if the country did not enact more 
expansive fiscal and monetary policies and face a 4 percent 
drop in its gross domestic product. 
 
 
MEXICO 00000467  003 OF 003 
 
 
¶10.  Academics at the ITESM were not as downbeat as those at 
the UNAM.  The ITESM researchers predicted that Mexico would 
only lose around 250,000 jobs and that its gross domestic 
product would decline by about 1.5 percent.  However the 
ITESM researchers did note that during the six year 
presidential administration that began in 2000 Mexico 
generated an average of about 165,000 per year.  Since the 
start of the Calderon Administration nearly two full years 
ago Mexico has only generated 83,000 jobs per year; a figure 
significantly less than the one million jobs a year that the 
ITESM calculated the country needs to keep pace with its 
population and to maintain a stable economy capable of 
meeting the MexicoQ,s social requirements 
 
COMMENT 
------- 
 
¶11.  During his 2006 presidential campaign then candidate 
Felipe Calderon promised that he would be the Q&Employment 
President.Q8 Thus far however, President Calderon has not 
been able to make good on this promise.  His January 7 
proposal to promote job creation and avoid layoffs appears to 
be a sincere attempt aimed at stabilizing the countryQ,s 
employment situation.  That said, it is still too early to 
say how successful the new program will be and critics of the 
Calderon administration have described the initiative as a 
mere Q&band-aidQ8 in the face of the global economic 
slowdown.  There is clearly genuine concern across a broad 
spectrum of Mexican society over the grim prospects for jobs 
in 2009 that could ultimately convert itself into a self 
fulfilling prophesy. 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
BASSETT