Informal traders earn more than professionals in Mexico

The agency noted that 38 percent of the informal economy is located in the retail trade / Image: stock photo
The agency noted that 38 percent of the informal economy is located in the retail trade / Image: stock photo

A person in the informal market can earn more than 15 thousand pesos a month, with the sale of bottles of water, confectionery or snacks in the vicinity of the National Palace, little more than a professional graduated from the area of ​​Biological Sciences in Mexico.

And it is that this career has the highest salaries in the country, with an average of 13 thousand 812 pesos per month, according to the study «Trends in Professional Employment», of the Ministry of Labor and Social Security (STPS).

They are followed by the area of ​​Architecture, Urbanism, and Design, with 13 thousand 549 pesos, and in the opposite pole, Humanities are observed, with 10 thousand 365 pesos and Arts, with nine thousand 768 pesos, according to the Labor Observatory, with data to the fourth quarter of 2018.

The president of the National Alliance of Small Merchants (ANPEC), Cuauhtémoc Rivera, said that the informal economy has an upward trend, even during the first five months of the entry of the new federal government.

In an interview with Notimex, he explained that public trade has gone from being an activity of survival to a criterion of governability, because what would these people do if they removed these jobs when there are no job opportunities and those that exist are true underemployment.

This situation worries because it puts in check the occupational health of people and, above all, public safety because it is illegal to sell contraband products, food, and drinks, pirates or without sanitary registration, and behind are the organized crime gangs.

Despite the recent increase of 16.21 percent to the national minimum wage and 100 percent on the northern border, he indicated that working conditions in Mexico have led 52 percent of its inhabitants to work in the informal market.

This is because it is a commercial activity that brings large economic profits to criminal gangs since informal vendors do not pay taxes and do not comply with any regulation. That black market gains huge profits because an informal seller earns an average of 500 pesos a day when it is located in the best consumption points, and a formal worker earns only 100 pesos.

You can even spend hours at the helm of a private transporter such as Uber to pay the car rental and be able to have an income of eight thousand pesos each month; there are also small merchants who get between eight thousand and nine thousand pesos after spending hours behind the counter of a store.

Informality in numbers

The National Survey of Occupation and Employment (ENOE) of the last quarter of 2018, conducted by the National Institute of Statistics and Geography (INEGI), revealed that informality is a persistent issue due to dismissals of personnel and underemployment (very poorly paid occupations).

The informal economy represented 30 percent of the Gross Domestic Product (GDP) during the first quarter of the new government, which shows a setback in labor that threatens to rise. Mexico is also the country where most work is done every year, with 2,220 hours, and the worst pay, according to the Organization for Economic Cooperation and Development (OECD).

According to Cuauhtémoc Rivera, leader of the small merchants, the informal market has grown for 30 years and went from offering movies and pirate music to the sale of clothing, footwear, bags, perfumes and even bottled water, confectionery and a variety of stolen snacks, adulterated and without sanitary regulation.

"This merchandise makes the engine to grow informality in an excessive way and poverty sustains it," remarked the businessman, who explained that many of these products enter through different borders and others are from cargo theft in the whole country.

It is estimated that there is a record of at least five thousand 583 investigation folders for the complaints of transporters since 2018 and so far in 2019. "The authorities know perfectly where the gaps are where any amount of contraband merchandise goes".

Data from the National Chamber of the Transformation Industry (Canacintra) indicate that Mexico ranks fourth in piracy and contraband crimes, but it is number one on a continental level. These crimes generate an economic loss of 43 billion pesos a year for the country.

Informality is subject to combat

For the interviewee, the government needs to review the fiscal policy, because there is "huge government strabismus" from the previous administration and even in the current one, believing that the informal market has an exit with only increasing taxes.

He recalled that in the government of Enrique Peña Nieto (2012-2018) it was decided to follow this path and apply greater rigor for those in formal employment and leave hands-free those who are not and do not have respect for intellectual property.

"If you seek to combat corruption, informality is subject to combat because it splashes across society," said Rivera, who said that it can not accommodate a tax rule that would further squeeze the pockets of Mexican families, entrepreneurs, and merchants who work formally and pay taxes.

"The black market pirates are served with the big spoon, with total impunity."

by Agency

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Concanaco seeks to reduce informal commerce because it reduces productivity

La Concanaco asked the Federal Government for an effective strategy to reduce the informal economy, which generates 60 percent of the country's jobs and represents almost 23 percent of the national gross domestic product, because it slows down productive investment, affects established companies and causes a serious tax evasion.

The president of the Confederation of National Chambers of Commerce, Services and Tourism (Concanaco Servytur), José Manuel López Campos, said that organized crime has become one of the main suppliers of products for those who carry out informal business activities.

He considered it essential that the government of President Andrés Manuel López Obrador define a clear strategy to end the illicit economy that hurts all economic activities as a whole.

According to figures from the National Institute of Statistics and Geography (INEGI), of every 100 pesos of the country's GDP, 77 pesos are generated by 43 percent of the formally occupied people, while 23 pesos come from almost 60 percent of the informal employees.

Based on its composition, the agency noted that 38 percent of the informal economy is located in the retail trade, 27 percent in the manufacturing industry, 13 percent in transportation services, mail and storage, and 22 percent in different areas

The business leader explained that the enormous structure of the informal economy is clearly seen in the way that street vendors offer the same products on certain dates.

"However, street trading is only the most visible face of the informal economy, but in reality it is the tip of the iceberg of a very complex problem, which must be addressed with effective strategies," he said.

The leader of the Concanaco Servytur argued that the smuggling of products that harm the national economy and that is tolerated by bad authorities of the three levels of government must be stopped.

"You should not lift your finger from the sore of the informal economy, he stressed, because it prevents our nation can grow to the levels we need, between 4 or 5 percent a year, to generate jobs and levels of remuneration that the country needs".

Mexico, he said, has become the fourteenth economy in the world and not only do we need that to be sustainable over time but to improve significantly.

Therefore, setbacks should be avoided, because the country would lose the progress made in terms of social security, health, although it takes a lot to reach welfare levels and reduce the social inequalities to which we all aspire.