such an activity in the prior month

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1 Informal and Formal Employment by Sex in Mexico María Elena Cardero and Guadalupe Espinosa Preliminary findings Universidad Nacional Autónoma de México, UNAM In Mexico, there are different sources of information on employment, the most well known are those emanating from the Mexican Social Security Institute (IMSS), the National Institute for Statistical and Geographical Information s (INEGI) National Accounts System and the National Employment Surveys (ENE by its Spanish initials), produced by INEGI. Since 2005, the National Occupation and Employment Survey (ENOE by its Spanish initial), which is broader than the ENE and also produced by the INEGI, has also become an important source. Studies on informal employment can be found in the ENE and the ENOE. The ENOE is the source that provides the greatest information for analyzing employment in Mexico since it surveys people in their homes, thereby obtaining greater accuracy regarding the diversity of work characteristics and circumstances, for example, what population participates in the labor market and in what conditions and what population seeks to participate without success. Additionally, information can be obtained about those that do not carry out economic activities because they are students, retired or for other reasons. An important advantage of the ENOE is that besides the amount of employment categories that it includes, the information is broken down based on different demographic characteristics such as sex, age, marital status, number of children, etc. Since these characteristics are associated with work they enrich the analysis of its dynamic. According to the ENOE the economically active population (PEA by its Spanish initials) in was 45 million people, and the employed population 2 reached 43.9 millions. Of these 43.9 million people, 61% work in the tertiary sector of the economy (in which almost 20% are in commerce), 25% in the secondary sector (with 16% in manufacturing and 8% in construction) and 13% in the primary sector. 1 Defined as: people that during the period referenced carried out an economic activity or actively sought out such an activity in the prior month 2 Defined as, people that during the week referenced carried out some economic activity in whichever of the following situations: working at least one hour or one day to produce goods/services in independent or subordinate circumstances, with or without retribution 1

2 Total employed population by sector of activity, 2000 to Second term Years Total sector of economic activity Primary Agriculture, farming, forestry, hunting and fishing Secundary Mining and electricity Manufacturing industry Construction Terciary Commerce Restaurants and lodging services communications, mail and storagetransportes, Profesional financial and corporative services Social Services Diverse Services Governement and international organizations Non specified Fuente: ENE y ENOE, INEGI Of this employed population, 61% are involved in salaried activities and the remaining 39% are divided among those that are self-employed (22%), receive honoraria or commissions (5%), are employers (5%) or are not paid (6%). 2

3 Employed population by job position 2000 to 2008 thousands of persons salaried and subordinated workers year Employed Population/2 salaried/3 with non salaried income/4 Employer/5 self employed workers/6 workers without income/7 non specified workers People that during the period referenced carried out an economic activity or actively sought out such an activ 2. People that during the week referenced carried out some economic activity in whichever of the following situations: working at least one hour or one day to produce goods/services in independent or subordinate circumstances, with or without retribution 3. Paid subordinate workers that earn an income, salary or day s wage for their work 4. People that work as subordinates but earn commissions, honoraria, payment for piecework and tips 5. Refers to an independent worker that employs a person in exchange for economic remuneration or in specie 6.Paid workers of their own will that can occupy workers (family members or not) without paying them 7.People that do not receive any type of payment for their work though they can earn some type of retribution 8. Personas que no estando ocupadas en la semana anterior buscaron activamente incoporarse a alguna actividad económica en algún momento del último mes Fuente INEGI, ENOE II Informe de Gobierno2008 Employment by unit shows that of the 43 million employed people in 2008, 50% work in companies and businesses, 14% in public or private institutions and 35% in their homes, which is where INEGI places those that work in the informal sector, paid domestic workers and agricultural workers. According to the ENOE, the total employed population during 2008, without including the agricultural and farming sector, was 36.9 million people, of which 48% work in small businesses. 3 3 in non agricultural and farming economic units dedicated to industry, commerce, and services that does not pass the following limits: 1-15 workers in the industry 1-5 workers in trade, and 1-5 workers in services 3

4 México: Mexico: Employed population by area and size of economic unit miles de personas small business Establishments año total/1 agricult ural and non farming area/2 agricultu ral/3 total/4 witout establism ent with establishm ent total small0 /5 mediu m 6 large/7 Governm ent other/8 non specifie d people that during the week referenced carried out some type of economic activity and if they performed in the agricultural and farming area or non agricultural and farming, considering the classification of companies, businesses and institutions 2. Covers agriculture, ranching, forestry and fishing 3. Activities of secondary sectors of production 4. Non-agricultural and farming units dedicated to industry, commerce and services that do not surpass the following limits, 1 to 15 workers in industry, 1 to 5 workers in commerce, 1 to 5 workers in services. 5. De 16 a 50 trabajadores en la industria, de 6 a 15 en el comercio, y de 6 a 50 en los servicios 6. From 16 to 50 workers in industry, 6 to 15 in commerce and 6 to 50 in servicese 51 a 250 trabajadores en la industria,de 16 a Units that have 251 or more workers in any sector of activity 8.Covers paid domestic workers, trnasborder, and the size of the establishment not specified Source: INEGI, ENOE II Government Report 2008 In terms of income, close to 56% of the employed population works for three minimum wages or less and 3.6 million people do not receive any income. 4

5 Employed population by income level thousands of persons more than 1 to 2 minimum wages more than 2 to 3 minimun wages by level of income more than 3 to 5 mínimum wages more than 5 mínimum wages año total Up to 1 minimu m wage do not receibe income n/e Fuente INEGI, ENOE The population which earns up to one minimum wage has decreased, as well as the population that is in the border between more than one and up to two minimum wages, and to a smaller degree the population that does not receive income. On the other hand, the number of people that receive two or more wages as well as those that are in the subsequent wage brackets has increased Unemployment The demographic dynamic and the national economy s loss of international competition has greatly effected the unemployment that has accumulated in the last ten or fifteen years. This unemployment is structural, meaning that it occurs in an economy with low levels of accumulation, labor productivity and growth. The rate of unemployment in November and December 2008 was 4.47 and 4.32 percent respectively and the number of unemployed as of December was 1.9 million. Today, there are probably more than 20 million Mexicans that, without unemployment insurance, work from their home, in street stands, in established locales and in formal businesses under informal conditions in which they do not receive social security or legal work benefits. Unemployment rate and product growth

6 U = 2.9 y = U = 18.5 y = U y Note: U = Macroeconomic rate of unemployment = (PEA PO)/PEA; PO = Employed Population that the National Accounts System reports; y = half rate of GNP growth. Because there are no official data on open unemployment prior to 1985, this is an estimate of the evolution of unemployment. Source: Loria E, and A Sánchez. Employment in Mexico. (2007) Notebook 3. - Informal sector and informal employment In 1972, for the first time the International Labour Organization (ILO) used the term informal sector (or unstructured sector) with the objective of highlighting one of the most important problems of its time; the reproduction of a large number of poor workers that produced goods and services and whose activities were not recognized, registered or protected by public authorities. 4 The importance and magnitude of the economic activities, to which we colloquially refer to as the informal sector, is evident when we review the ILO s own numbers, which show that in 1999 the population employed in these activities fluctuated between 30 and 80%; 5 48% of the non-agricultural employment in Northern Africa, 72% in Sub- Saharan Africa, 65% in Asia. 6 In Latin America between 1990 and 2003, employment in the non-agricultural informal sector rose from 42.8% to 46.7% (Tokman, 2006). 7 For Mexico, this information indicates that 62% of the employed population works in the informal sector. 8 4 ILO: Employment, incomes and equality: A strategy for increasing productive employment in Kenya (Geneva, 1972). 5 I M. Tomei:A different perspective: Industrial Relations and the Informal Sector in ILO, World Labour Report 1997, (in press). 6 Informe global con arreglo al seguimiento de la Declaración de la OIT relativa a los principios y derechos fundamentales en el trabajo CONFERENCIA INTERNACIONAL DEL TRABAJO 92. A reunión 2004 Informe I (B). OIT 7Tokman, Víctor, Labor insertion, labor markets and social protection. CEPAL/GTZ, The calculation took into consideration self-employment, small businesses and paid domestic work. 8 ILO: Women and men in the informal economy: A statistical picture, Employment sector (Geneva, 2002). 6

7 In the Report of the VII International Labour Conference, the session on Decent Work and the Informal Economy, 9 set forth the following, in order to push for greater conceptual and definitional clarity. The term informal economy is used to indicate the conceptual whole of informality covering both production relationships and employment relationships. While the term informal economy embodies the sum of all the parts The report also indicates that the informal economy is characterized by a tremendous heterogeneity and suggests that in the area of work there are very important forces that are expanding the size and changing the characteristics of the informal economy, in addition to maintaining links with the formal economy. These forces consist of an interaction of multiple social, economic, institutional and cultural factors almost none of which are neutral in terms of gender and because of this the existence of the informal sector cannot be attributed to a single cause. 10 The debates on the origins of the informal sector, based on the report from Kenya, have been focused on three orientations which have been defined as dualist, structuralist and formalist. In a more simplified way, the first orientation assumes that these activities will disappear to the degree in which modern work opportunities are created that absorb labor surplus that is generated as a result of a slow rate of economic growth or an accelerated rate of population growth. The second orientation considers that the informal sector should be seen as subordinate economic units (small businesses) and workers that function to reduce materials and labor costs, thereby increasing the competition among large capitalist businesses. In this orientation, the different modes of production do not only co-exist but they are closely linked and interdependent. The third orientation sustains that the informal sector is a mechanism for small business people to avoid the costs and time that is lost in the paperwork of formal registration and considers that this sector will subsist and increase to the degree that these procedures remain highly complex and costly. 11 Since the 80s, any definition that is adopted is associated with the informality of employment relations: subcontracting, maquila, industrial work from home, etc. The informal economy has become permanent but according to Portes and others (1989) now, as a figure of subordinate and dependent capitalist development. In addition, owing to its own dynamic, these activities maintain a strong link with employment in the formal sector of the economy and mutually reinforce each other. Employment in the informal sector tends to increase during periods of economic crisis, though in recent years, economic and political stability has produced 9 ILO: Report of the VII International Labour Conference th. Session: Decent work and the informal economy. (Sixth item on the agenda) 10 Ibidem p Various authors. Taken from Chen, M., Vanek, J., and Carr, M.: Mainstreaming Informal Employment and Gender in Poverty Reduction: A Handbook for Policy-makers and other Stakeholders. Commonwealth Secretariat/IDRC

8 instability in employment and income, which along with other factors, represents a serious challenge to labor policy. The results of diverse investigations have indicated that the lack of economic opportunities for the working-age population, is one of the most serious problems in our day and they assure that the creation of employment is the most effective means to eradicate poverty. However, this has not been considered in public policy actions that countries have carried out in their efforts to reduce poverty. Using as a point of departure the emphasis that the ILO s new orientation gives to the concept of social protection, our research will not seek to question or redefine the coverage of the informal sector or the informal economy. Our objective is to study the informal economy based on what is considered a key element in the quality of employment, namely the availability of labor protection, social security and health insurance at work. Below this concept and in the framework of the classification found in the National Occupation and Employment Survey (ENOE), we will study the nature and dynamic of informal work based on the situation of employed workers, in the different units of production: legally constituted companies and corporations; unincorporated companies or businesses; private and public institutions, as well as paid domestic work and subsistence agriculture. Our work is not only oriented at characterizing informal employment per se, but at seeing in which of these informal circumstances employment is more closely linked to the risks of poverty and with gender breaches. 3.1 The information Even though we will use relevant statistics for this research, our principle source will be the INEGI s National Occupation and Employment Survey. Based on Hussmanns definition, the ENOE identifies the work that occurs within the informal sector with the following definition: all market-oriented economic activities that operate using household resources but without becoming constituted as units with an identifiable and independent situation from these households. The operative criteria to determine the non-independent situation of the production units with regards to the household is the absence of conventional accounting practices, able to be documented in a balance sheet. The absence of these practices indicates that there is no distinction between the household patrimony and that of the business s nor a distinction between the expenses of the business and those of the household (for example electricity and telephone expenses, use of vehicles, etc.). As can be observed, this definition is constructed primarily based on household resources and the dependent relationship that exists between the production units and the patrimony of the households that carry out these activities, emphasizing the situation or way in which the units or establishments are organized where activities are carried out. Our research, relates more directly with the situation of 8

9 the workers who carry out informal work and do not have social security, therefore we will combine people s position at work with different ways of organization of the production units. Since our premise in order to identify the people that make up the whole of informal employment is that their work does not provide social and health protections, it is possible, though not probable, that some of the workers classified by the ENOE in the informal sector have protection by these institutions and were not part of our informal employment total. It is also possible, and highly probable, that those located in the formal sector by the ENOE are considered informal, according to our research criteria. Given the characteristics of the labor market in Mexico, the expansion of the criteria to include having social and health protection or not, implies that the number of people considered informal workers increases significantly. We consider that the use of non-protection as the central premise for identifying informal work allows us to explore more broadly the difficulties that people face in participating in the labor market in conditions that guarantee the fulfillment of one of the fundamental rights of workers. However, it is clear to us that this distinction by itself does not provide a fair vision of the inequality, poverty and vulnerability that many employed in these activities may suffer, and above all, the relevance that gender roles play in these circumstances. Because of this, in each one of the categories that we identify as informal employment, we will apply the necessary criteria to help us establish the levels of informal employment that are more linked to situations of poverty and vulnerability and identify the gender breaches that have made women s participation more difficult. 3.2 Analyzing informal work using information from the ENOE In order to understand the whole population that we will be analyzing, it is necessary to contrast the information on the employed population that the ENOE reports as employed in the informal sector with the information on the employed population that does not have social security or health insurance, the latter which will be the subject of our work and identified from this point forward by the initials SAIS, which stands for without access to social security schemes and health insurance in the Spanish. Employed population SAIS vs. employed population in the informal sector defined by the ENOE, by sex 2000, 2005 and Employed population TOTAL In informal sector defined by the ENOE , , , ,218 (26.9%) ,457 (28.1%) ,471(27.5%) 9

10 Without access to health insurance Employed population MEN In informal sector defined by the ENOE Without access to health insurance Employed population WOMEN In informal sector defined by the ENOE Without access to health insurance ,361 (64.5%) ,928 (64.0%) ,846 (63.4%) , , , ,580 (26.2%) 7.101,094 (27.5%) 7.358,158 (26.9%) ,723 (65.7%) ,405 (64.5%) ,778 (63.6%) , , , ,638 (26.1%) 4.364,363 (29.2%) 4.704,313 (28.6%) 8.085,638 (62.1%) 9.437,523 (63.2%) ,068 (63%) Source: ENOE. The numbers of SAIS people in this table are slightly less than those that we will use in the following tables since in those tables we have added non-specified employed. The dynamic of the employed population has been of growth during the three periods, going from 38.1 million people in 2000 to 43.9 million in Using the criteria for informality used by the ENOE, approximately one-fourth (27.5%) of the employed population would be in the informal sector by However, with the criteria of no social security or health coverage used in our research, this number rises to 64% during the three periods. In other words, approximately two-thirds of the employed population is not on any social security scheme and do not have health insurance and therefore are considered informal employees according to our research. In terms of informal employment, the proportion of men decreased by 1% in the periods analyzed, going from 65.7% in 2000 to 63.6% in Among women, the proportion is less than that for men and it remains stable at close to 63.0%. 3.3 Where is informal employment concentrated in Mexico? In Mexico, the diversification of production has resulted in informal work relationships with registered or formal corporate enterprises. In the following table the distribution of formal and informal employment is shown by different economic categories. Table 8.2 Employed population according to type of economic category and employment condition 2000, 2005 and 2008 Type of economic unit (how it is organized) Formal Informal Formal Informal Formal Informal Total employed 13,498,866 24,545,635 14,421,792 26,370,022 15,800,044 28,066,652 Legally constituted companies and corporations 7,467,737 1,456,365 7,729,973 1,753,446 8,581,665 1,585,820 Unincorporated businesses 1,841,954 8,567,201 1,602,161 9,258,768 1,836,032 10,101,650 10

11 Private 337, , , , , ,823 Public 3,670, ,002 4,356, ,684 4,590, ,582 Situations of special character and NS 11, ,248 5, ,179 9, ,202 Informal employment in formal companies 11,093,193 (45.1%) 11,788,171(44.7%) 12,659,875 (45.1%) Homes: informal sector ENOE + paid domestic work + subsistence agriculture 169,617 13,314, ,359 14,327, ,180 15,076,575 Source: ENE, ENOE. SAIS= without access to social security schemes and health insurance The greatest part of informal employment (54%) in 2008 can be found concentrated primarily among people employed in market economic activities which the ENOE defines as informal sector, in other words, those that operate from household resources and whose financial income/balance is not distinguishable from the household patrimony to which those that are employed in paid domestic work and subsistence agriculture are added. An important part of informal employment can be found in the economic categories identified as formal by the ENOE. For the three years shown, the percentage of those employments linked to the formal sector remains about 45 percent. From this point forward, when we refer to the formal sector we refer specifically to workers that participate in all economic activities carried out by legally constituted companies and corporations, public and private institutions, unincorporated businesses, but which report income to tax authorities, in addition to paid domestic work and agricultural or animal husbandry oriented towards the market 12.and which have social security and or health insurance as a result of these activities. When we refer to informal employment, this refers to the population that we have defined as SAIS, who regardless of the economic structure in which they work, by not having any social security or health insurance provided by their work. 3.7 What is the size of the units in which informal employment is located? In employment as a whole, the sector of activity has some relationship with the size of the establishment. For example, manufacturing industry predominates in medium and large establishments while retail and services predominates in small business establishments. With the objective of presenting an integrated table for the three years studied, we will group together these economic units into primary sector (agriculture, ranching, forestry and fishing), secondary sector (mining, electricity, manufacturing and construction) and tertiary sector (retail, restaurants and lodging, transportation, communications, mail, storage, professional, financial 12 INEGI: ENOE glossary 11

12 and corporate services, social and diverse services and government and international organizations). Table 8.3 Employed population by sector, size of the economic establishment and sex according to participation in the formal sector and informal employment, 2000, 2005 and 2008 Sector and size of the economic establishment Formal Informal Formal Informal Formal Informal Primary 352,637 6,325, ,521 5,739, ,478 5,451,085 1 person 13,026 1,437,491 13,913 1,583,505 13,724 1,378,267 From 2 to 5 people 43,553 3,837,383 57,247 3,408,799 50,538 3,280,543 From 6 to 15 people 42, ,172 53, ,539 51, , and more 251, , , , , ,909 NS 1,975 24,995 3,913 27,046 10,025 47,382 Secondary 5,014,241 5,787,965 4,537,159 5,868,631 4,908,998 6,272,001 1 person 1,021 1,425,765 9,309 1,405, ,534,434 From 2 to 5 people 145,449 2,892, ,557 3,018, ,483 3,274,255 From 6 to 15 people 284, , , , , , and more 4,567, ,654 3,897, ,761 4,202, ,863 NS 15,367 27, ,854 75, , ,795 Tertiary 8,128,132 12,425,730 9,558,316 14,519,671 10,575,147 16,018,958 1 person 77,501 4,151,757 67,126 4,913,692 34,374 5,511,229 From 2 to 5 people 548,383 5,598, ,878 6,920, ,827 7,630,073 From 6 to 15 people 706, ,343 1,556,547 1,261,509 1,668,667 1,346, and more 6,781,826 1,832,272 6,921,390 1,298,851 7,700,534 1,358,082 NS 14,255 24, , , , ,709 Source: ENOE During the three years studied and in the three sectors, formal employment is concentrated in establishments that have 16 or more workers, however, in the agricultural and farming sector, the number of these units was greatly reduced by 2008 and thereby the working population, though it increases slightly in the establishments with 2 to 5 and 6 to 15 workers. In the case of informal employment, the employees in the three sectors are concentrated in establishments that have two to five workers. In the primary sector there was a reduction of approximately one million workers during the three years. In the secondary and tertiary sectors the increase in these units is significant, particularly in the tertiary sector where the working population increased by 3.5 millions. 3.8 In what sectors is informal employment concentrated? We consider it important to break down the three sectors of activity in order to determine what activities within them have been niches for informal employment. Table 8.4 Employed population by activity, according to employment condition 2000, 2005 and

13 Activity Formal Informal Formal Informal Formal Informal TOTAL 13,498,866 24,545,635 14,421,792 26,370,022 15,800,044 28,066,652 Agriculture, ranching, forestry, hunting and fishing 352,637 6,325,372(25.8) 320,521 5,739,301(21.8) 307,478 5,451,085(19.4) Mining and electricity 249,037 55, ,194 62, ,514 44,928 Manufacturing industry 4,249,388 3,193,044 3,635,841 3,209,270 3,832,826 3,317,525 Construction 515,816 2,539, ,124 2,596, ,658 2,909,548 Trade 1,799,112 4,877,967(20) 2,181,347 5,839,502(22.1) 2,329,768 6,273,942(22.4) Restaurants and lodging services 520,670 1,308,169(5) 652,827 1,785,489(6.7) 731,812 2,104,923(7.5) Transportation, mail and storage 769,776 1,082, ,729 1,234, ,145 1,258,553 Professional, financial and corporate services 757, ,929 1,076,214 1,145,179 1,395,742 1,326,309 Social services 2,226, ,679 2,668, ,267 2,784, ,045 Diverse services 754,494 3,046,149(12.4) 567,604 3,573,573(13.5) 565,328 3,926,964(13.9) Government and international organizations 1,299, ,893 1,628, ,963 1,841, ,222 Not specified 3,856 6,568 5, ,419 8, ,608 Source: Formal employment is concentrated primarily in the manufacturing industry (31.2%), in social services (16.5%) and in commerce (13.3%). In the manufacturing sector there was a significant decrease in formal employment between 2000 and 2005 in the amount of almost 6%, while the proportion during the three years studied rose slightly for social services and trade. The greatest part of informal employment up to 2000 was concentrated in agricultural, ranching, forestry, hunting and fishing activities, however the decrease in the participation in these activities is very significant in the three years studied, going from 25.8% in 2000 to 19.4% in In 2005 the predominant activity was commerce, which concentrated 22.1% of informal employment, a percentage that remained more or less the same in Diverse services were in third place in terms of niches for informal employment during the three years studied (12.4%, 13.5% and 13.9%). 3.9 Informal employment and income In the previous sections we mentioned that the majority of the employed population obtains income up to three minimum wages, however, the differences between informal and formal sector work are important. 13

14 Table 8.5 Employed population by level of income, according to employment condition 2000, 2005 and 2008 Wage Formal Informal Formal Informal Formal Informal TOTAL 13,498,866 24,545,635 14,421,792 26,370,022 15,800,044 28,066,652 Up to 1 minimum wage 323,252 (2.3) 5,671,739(23) 281,015(1.9) 5,781,921(21.9) 203,424(1.3) 5,084,693(18.1) More than 1 and up to 2 minimum wages 3,629,264(26.9) 7,187,127(29.3) 2,691,760(18.7) 6,576,823(24.9) 2,335,319(14.8) 6,638,953(23.7) More than 2 and up to 3 minimum wages 3,785,428(28.1) 3,175,177(13) 3,923,003(27.2) 3,898,165(14.8) 4,554,083(28.8) 5,625,258(20) More than 3 and up to 5 minimum wages 3,094,369(22.9) 2,200,657(9) 4,144,153(28.7) 3,219,695(12.2) 4,433,826(28) 3,207,256(11.4) More than 5 minimum wages 2,295,153(17) 1,705,116(7) 2,641,838(18.3) 1,599,260(6.1) 3,085,507(19.5) 2,017,447(7.2) Does not receive income 399 3,849,042(15.7) 21,242(0.1) 3,828,175(14.5) 13,933 3,632,419(12.9) Not specified 371,001(2.7) 756,777(3) 718,781(4.5) 1,465,983(5.5) 1,173,952(7.4) 1,860,626(6.6) The percentage of those that receive up to one minimum wage in the formal sector barely reaches 2% in the three years studied while informal employment registers a percentage of 23%, 22% and 18% in 2000, 2005 and 2008 respectively. The wages in the formal sector are found primarily between two and three minimum wages, and even up to five minimum wages in 2005, while in informal employment they are located primarily between more than one and up to two minimum wages. A relevant aspect of these differences is in reference to unpaid work since in the formal sector, its incidence is practically insignificant while in the informal sector it constitutes 15.7%, 14.5% and 12.9% respectively for the three years studied. These numbers confirm what has been systematically observed in studies on labor informality in regards to unpaid family work as being one of the pillars of the economy What is the job position of workers in informal employment? Both formal and informal employment concentrates its greatest proportions among paid subordinate workers. Table 8.6 Employed population by job position according to employment condition 2000, 2005 and 2008 Job position Formal Informal (sais) Formal Informal (sais) Formal Informal (sais) TOTAL 13,498,866 24,545,635 14,421,792 26,370,022 15,800,044 28,066,652 14

15 Paid subordinate workers 13,410,275 10,884,648(44.3) 14,229,503 12,000,769(45.5) 15,748,358 13,157,052(46.7) Employers 49,382 1,599,871(6.5) 93,522 1,815,020(6.9) 18,218* 2,150,851(7.7) Self-employed workers 36,091 8,881,869(36.2) 79,580 9,535,586(36.1) 20,572* 9,846,955(35) Workers without pay ,171,098(13) 19,187 3,018,647(11.5) 12,896* 2,911,794(10.4) Not specified 3,118 8, *The sample in these categories was insufficient for statistical validity In the case of the formal sector, practically 99% of the workers can be found in paid subordinate positions while the proportion that identify as employers in this sector do not surpass 1% in the three years studied. In the case of informal employment, the proportion of paid subordinate employees grew from 44.3% to 46.7% between 2000 and Different from the formal sector, among informal workers, the proportion of employers rose from 6.5% in 2000 to 7.7% in In the formal sector, self-employed workers is registered at below 1%, however in informal employment this category concentrates 36.2%, 36.1% and 35% respectively for the three years studied Where do informal sector employees carry out their work? The physical space where the formal sector carries out its work, in general, is in establishments exclusively constructed or adapted for these specific activities, contrary to informal employment which is carried out in very diverse circumstances and places. This degree of detailed information was gathered in the ENOE only after 2005 and therefore the following table only analyzes the 2005 and 2008 periods. Table 8.7 Employed population by type of establishment where the work is carried out according to employment condition, 2005 and 2008 Physical space Formal Informal Formal Informal TOTAL 14,421,792 26,370,022 15,800,044 28,066,652 Private sector business 7,764, ,767, ,562, ,586, Institution or organization 4,758, , ,108, , Establishment and office 376, , , , Office 176, , , , Storefront 786, ,503, , ,192, In the field, open sky, on a ship, pool, sea 4, , , ,102.8 Ambulant from house to house or in the street 3, ,817 2, ,837 Improvised stand , , In vehicle without motor 2, , , Workers without pay are people that work in a family unit and do not receive pay for their work contribution to the family income (2.9 million people). Workers that do not receive income include the above and also include workers in subsistence agriculture and farming activities because they do not receive monetary payment and since the minimum wages are in pesos this means that they do not receive monetary income, that their relation to the work is independent. (3.6 million workers) 15

16 In motorized vehicle 33, , , ,036, At home without special installation 7,705 1,676, ,857,564 At home with special installation 5, ,360 1, ,442 At employers house or wherever it is required 123, ,757, , ,910, Agricultural and farming activities 279,163 5,495, ,638 5,260,916 Paid domestic work 87, ,666, , ,900, Semi-fixed stand 6, , , , Fixed stand 2,351-81, ,964.5 Worker outside of the country 0 180, ,254 Other place , , ,728.5 NS 2,275-15, ,455 *The sample in this category was insufficient for statistical validity. In both periods, more than 50 percent of formal employment was concentrated in private sector businesses (53.8% and 54.2%), followed by employment carried out in institutions or organizations (33% and 32.3%) and in storefronts (5.5% and 6.2%). For the most part, work in the formal sector, was not carried out in improvised places or from home but rather in storefronts, businesses or institutions. The small percentage of the formal sector in agriculture and farming activity decreased from 2% in 2005 to 1.8% in 2008 and 0.6% of formal employment is in paid domestic work, in other words, domestic employees that have social security and health insurance through their work. Informal employment distribution is more heterogeneous, but in the two years studied the greatest percentage (24.7% and 25.6%) is concentrated in storefronts, followed by agricultural and farming activities which decreased from 20.8% in 2005 to 18.7% in 2008, and finally by work that is carried out in the employer s home or where it is required (14.3% and 13.9%). The proportion that carries out work in their own home and paid domestic work is also relevant. In conclusion, when we apply the condition of availability of a social security scheme or health insurance, informal employment increased in 2008 from 27.5%, calculated with the criteria for informality used by the ENOE, to 63.4%. There are also marked differences in the type of organization and size of economic units which are the niches for informal employment; sectors of the economy such as agriculture, services and commerce tend to attract informal employment that is expelled from the formal sectors. In terms of wages, informal employment earns less than in the formal sector and the phenomenon of unpaid work is exclusively in informal employment, since it does not exist in the formality of work. It is clear that in the formal sector the labor force is basically comprised of paid subordinate workers and a small percentage of employers as well as some who are self-employed. On the contrary, the majority of informal employees are those who are self-employed and a substantial percentage do not receive pay. 16

17 The place of work for the formal sector are basically private sector businesses, institutions or organizations, while informal employment is distributed in a broad range of places that are concentrated in the so-called storefronts, agriculture and farming activities, the homes of people that require it and in workers homes. The differences that we observe in this first look at the dynamic of informal employment in Mexico support the hypothesis that the difficulties that face these activities are related to a series of resources, both physical and economic and familial of which not all people have at their disposal, particularly women. Both being poor and being a woman may contribute to the type and quality of the work which one may have access to, an aspect that we will analyze in the following chapters of this research. In the area that is called economic work, which is what we are addressing in this research, women s access shows important characteristics in general terms: women dominate in those sectors of the work force that are occupied in offices, sales or domestic service, while men, in general, are occupied in industry, construction and transportation. More women are occupied in teaching, caretaking services, subsistence agriculture, etc. Men and women may carry out the same activities; however salary levels are inclined in favor of men. 4.1 Female and male employment in Mexico In the entire Mexican population there are 4 million more women than men. The total employed population in the eight year period studied grew by 5.8 million, of which 3.4 million represent female employment and 2.4 million male employment. Table 8.6 Economically active population, employed population and unemployed population Years Total population Population 14 years of age and older Economically active population Employed population MEN Unemployed population Total population Population 14 years of age and older Economically active population Employed population Unemployed population WOMEN Total population Population 14 years of age and older Economically active population

18 Employed population Unemployed population Source: ENE and ENOE years selected Female employment grew by 18% in 1970 to 37.5% in The increase of female participation in paid activities responds to the combination of a variety of factors among which the primary one is the need to contribute resources to the home in the context of low growth in formal employment and the fall of wages nationally with the subsequent decrease in family income. In addition, women s greater access to education, the decrease in fertility rates and, to a lesser degree, the modification of social perceptions in relation to the roles of women and men, can also be factored in. Various studies have documented that the decrease in real salaries, the increase in the levels of male unemployment and the high levels of inflation have pressured women to move into the labor market in search of a strategy for generating income. The rate of female employment growth has been practically double that of men s. In the period from 1991 to 1995, the rate of employment growth for women was at 3.19%, in contrast to 1.61% for men. For the period the difference was 3.46% and 1.82% respectively and finally, for the period both decreased considerably to 2.29% for women and 0.5% for men. Employed population by sex Thousands of people Población ocupada por sexo, (miles de personas) 40,000 38,045 38,066 38,940 39,222 40,561 40,792 42,198 42,907 43,867 30,000 27,402 25,014 25,055 25,423 25,714 26,138 25,853 26,598 26,841 20,000 16,465 10,000 13,030 13,011 13,517 13,508 14,423 14,939 15,600 16, Total Hombres Mujeres Employment opportunities for women have diversified slowly, however the concentration of women in certain sectors and activities can still be observed, while in others it is almost totally absent. 18

19 When reviewing the ENE and ENOE for men and women, we can gather different information. Firstly, we can see employment in the three largest sectors of activity: primary, secondary and tertiary. Employed population by sector of activity and sex 2000, 2005 and 2008 Población ocupada por sector de actividad y sexo, 2000, 2005 y ,000 26,594 25,000 24,078 20,554 20,000 15,000 10,000 5,000 6,678 6,060 5,783 5,759 5,332 5,093 10,802 11,181 10,406 7,923 8,255 7,600 2,879 2,927 2,806 13,829 12,765 12,749 11,302 11,329 9,252 0 Primario (total) Primario (hombres) Primario (mujeres) Secundario (total) Secundario (hombres) Secundario (mujeres) Terciario (total) Terciario (hombres) Terciario (mujeres) Employment in the primary sector has fallen for men and women by close to one million jobs in the last eight years. In the secondary sector between 2000 and 2005, employment also decreased, but increased in 2008 for both men and women and particularly for men in construction. The most important increase was in the tertiary sector, more than six million jobs, almost half of which were for women, who increased their participation in commerce, restaurants and all services. Of the more than 16 million employed women, more than 12 million work in the tertiary sector (78%) which also grew during the years studied from 71% in 2000 to 75% in 2005, with commerce being the primary activity within this sector, followed by services and manufacturing. Table 10.2 Employed population by economic sector activity In thousands of people Years Men Women Total Primary Agriculture, ranching, forestry, hunting and fishing Secondary

20 Mining and electricity Manufacturing industry Construction Tertiary Commerce Restaurants and lodging services Transportation, communications, mail and storage Professional, financial and corporate services Social services Diverse services Government and international organizations Not specified Source: ENE and ENOE various years The largest increase in employment was in the tertiary sector, for women in commerce (1.2 million jobs), restaurants and lodging and services and for men in the same sectors only to a lesser degree. Men and women work primarily as paid subordinate workers, though women earn lower salaries and are less likely to be employers. 14 Women have generated almost one million additional jobs in self-employment, while men in this category have seen a slight decrease. Table 8.3 Population 14 years of age and older by sex and job position 2000, 2005, 2008 Job position and sex Employed Employed Employed Total 38,044,501 40,791,814 43,866,696 Paid subordinate workers 24,294,923 26,230,272 28,905,410 Employers 1,649,253 1,908,542 2,169,069 Self-employed workers 8,917,960 9,615,166 9,867,527 Unpaid workers 3,171,098 3,037,834 2,924,690 Not specified 11, Men 25,014,055 25,853,079 27,401,679 Paid subordinate workers 15,876,798 16,589,591 18,179,444 Employers 1,392,247 1,603,135 1,766,330 Self-employed workers 6,201,975 6,249,386 6,133,174 Unpaid workers 1,533,234 1,410,967 1,322,731 Not specified 9, The numbers for non-salaried income are only available for 2005 onward which is why they are not in the table. 20

21 Women 13,030,446 14,938,735 16,465,017 Paid subordinate workers 8,418,125 9,640,681 10,725,966 Employers 257, , ,739 Self-employed workers 2,715,985 3,365,780 3,734,353 Unpaid workers 1,637,864 1,626,867 1,601,959 Source: INEGI. National Occupation and Employment Surveys 2000, 2005 and 2008, second trimester. Data base Close to two thirds of employed women are paid subordinate employees, 22% of them are self-employed and they comprise more than half of the unpaid workers, though the total number shows a decrease. Of the total female employed population, the proportion of women without pay, 12.6%, 10.9% and 9.7%, is double that for men 6.1%, 5.5%, and 4.8% respectively. Employed male population by job position, 2000, 2005 and 2008 Población ocupada masculina por posición en la ocupación, 2000, 2005 y 2008 (miles de personas) 20,000 16,561 15,000 14,957 14,108 10,000 6,202 6,249 6,133 5,000 1,769 1,632 1,618 1,392 1,603 1,766 1,533 1,411 1,323 0 Asalariados Con percepciones no salariales Empleadores Trabajadores por cuenta propia Trabajadores no remunerados Employed female population by job position, 2000, 2005 and 2008 Población ocupada femenina por posición en la ocupación, 2000, 2005 y 2008 (miles de personas) 12,000 10,000 8,945 10,230 8,000 7,792 6,000 4,000 2,716 3,366 3,734 2, Asalariados Con percepciones no salariales Empleadores Trabajadores por cuenta propia ,638 1,627 1,602 Trabajadores no remunerados 21

22 In terms of the type of economic unit in which the majority of people work, 51% of jobs are carried out in companies of which more than half are unincorporated 15 and 35% of the population work in homes as informal workers. INEGI also defines the paid domestic workers as part of the informal sector as well as subsistence agricultural workers, to which we must add 340,000 non specified workers. Employed population by type of economic unit Thousands of people empresas y negocios instituciones sector de los hogares/4 año total total/1 legally unicorpo constituted rated corporation business/ s 3 total Privat e Públic total informal sector/5 paid domesti c workers subsist ence agricult ure n/e H M H M H M Market-oriented private sector economic units whose purpose is profit 2. Private sector economic units that operate below some market modality, including multinational corporations 3.includes already established family or individual businesses as well as market-oriented agriculture and farming activities. 4. This refers to incorporated economic units in the informal sector in addition to paid domestic work and subsistence agriculture. 5. These are market economic activities that operate based on household resources without becoming businesses that are identifiable and independent from homes Fuente ENE y ENOE varios años There were 15.3 million employees, 8.7 million men and 6.6 million women, in the household sector in Of the 16.5 million total employees in 2008, 29% were women in the household sector and 27% were men. Women comprise almost all paid domestic workers at 1.7 million, a number greater than the total for subsistence agriculture. Almost 70% of all jobs are carried out in small businesses, in which the number of employees increased from 14 million to 18 million from 2000 to 2008, and more 15 Defined as private sector units of a formal character that do not operate below a scheme that allows for the sharing of economic risks It includes already established family or individual businesses as well as market-oriented agriculture and farming activities. 22