Mexico's Informal Economy: One Reason for Country's Slow Economic Growth Hector Tajonar - Proceso
go to original August 7, 2013

MEXICO CITY - Little is said about it, despite its being one of the main causes for Mexico's social backwardness and low economic growth. It also reflects the prevailing culture of illegality and the perverse relationship between society and government, made up of a mixture of distrust and citizen dependency before the authority, together with a combination of paternalism, government inefficiency and corruption. It's about the informal economy, an obvious reality that for many years has been hidden and even encouraged, and which has become an obstacle to productivity and, hence, to development and the country's overall competitiveness.

Last December 11, the INEGI [National Institute of Statistics and Geography] revealed figures that had been kept secret for a long time: 59 percent of Mexican workers work in the informal economy, i.e., illegally, and so they have no social security [health, pension benefits], training, job security or other guarantees granted by the Federal Labor Law. A law that everyone, starting with the government itself, violated before and after its 'reform'.

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