March 25, 2020 SPECIAL COVID-19 ISSUE

MEXICO - Large Informal Sector, Medical Supply Shortages, and Lack of Nationwide Unemployment Insurance Program Pose Challenges in Fight Against COVID-19

By: Tequila Brooks, Comparative Labor and Employment Law Scholar

Mexico confirmed its first case of coronavirus on February 28 – a 35-year-old who had recently returned to Mexico City after traveling in Italy. The first case in City of Juárez, a major manufacturing center across the border from El Paso, Texas, was reported on March 1. By March 23, health officials in the State of Jalisco, home of Mexico’s “Silicon Valley” in the environs of the City of Guadalajara, had confirmed the third death from coronavirus in the country. Even before reports of the first cases of coronavirus, Mexico’s export manufacturing sector was already suffering from the economic effects of the coronavirus in China. On February 24, Benzinga reported that factories in the states of Chihuahua, Sonora, and San Luis Potosi had to modify production schedules due to delays in imports from China, impacting almost 400,000 factory workers in the state of Chihuahua alone. As factories continued to run low on supplies from China due to the coronavirus, the Mexican National Maquiladora Association created a task force to deal with the health and operational risks posed by the virus.

While federal and state agencies have been taking action to address the looming coronavirus crisis in Mexico, President Andrés Manuel López Obrador (better known by his initials AMLO) has been reluctant to order a full shutdown of Mexico’s public spaces and economy. Mexico’s social security institute (Instituto Mexicano del Seguro Social – IMSS), which provides hospital and healthcare services to insured members of Mexico’s populace, has been on the front lines treating patients with the coronavirus. Healthcare personnel employed by IMSS have been protesting in the streets about the lack of sufficient protective supplies like gloves and facemasks. Mexico’s national labor ministry (Secretaría del Trabajo y Previsión Social or STPS) issued unequivocal guidance that terminating employees for reasons related to coronavirus is unjustified and illegal. On March 20, Mexico’s national labor and health ministries published a guide for dealing with coronavirus in the workplace.

In a March 24, 2020 piece in America’s Quarterly, Hernán Gómez Bruera attributed AMLO’s reluctance to shut down Mexican society to his “Poor First” philosophy. While many middle-class Mexicans may be able to work from home, the majority of Mexican workers do not have that luxury. The ILO estimates that nearly 60% of Mexican workers have jobs in the informal sector, where they have no access to social protections. Ordering a full shutdown of the Mexican economy would leave informal sector workers with no way to provide for their families. One woman who runs a food cart in the City of Puebla was quoted in El Sol de Puebla as observing, “If the illness does not kill us, the economy will.” Workers in the formal sector of the economy would also be subjected to severe financial hardship if their workplaces shut down due to coronavirus because of the lack of a national unemployment system in the country. This includes the manufacturing sector, which poses particular safety concerns related to the coronavirus. While the government of Mexico City recently adopted an unemployment insurance program, it is the only jurisdiction in Mexico to adopt such a program – and the program explicitly extends coverage only to workers in the formal employment sector.

Tequila Brooks

Comparative Labor and Employment Law Scholar