Mexico is about to approve the 40-hour workday. This would take a second step in search of a new balance between life and work, after the changes to increase vacation days were voted last year.
There are several changes that reflect a new reality. To vacations and hours, we must add the increases in minimum wages (134% since 2018) and the changes in the pension system, which will increase the income for workers at the end of their working lives.
The movements that Mexico is making go in the same direction as other Latin American countries. 15 days ago, Chile also voted to reduce the work week to 40 hours. Ecuador, which is the other country with 40-hour weeks, made the changes last year.
The Chilean reform includes nuances that may be lacking in the Mexican one. They put maximum limits on the number of overtime hours a person can work; opens the possibility of completing 40 hours in four days and contemplates exceptions for sectors that are strategic and difficult to regulate, such as mining and transportation.
Do not go to believe that the Latin American region is at the forefront. The 40-hour week is a recommendation that the International Labor Organization first formulated more than seven decades ago. In 30 of the 38 OECD partner countries, people work 40 hours or less per week. The exceptions are Germany, Colombia, Costa Rica, Ireland, Israel, the United Kingdom, Switzerland and Turkey. There they work more than 40 hours.
How will the world of work change in Mexico after this reform? One of the most interesting questions is to observe if the Mexican will continue to be the one who works the most among the members of the Organization for Economic Cooperation and Development. Here, 2,250 hours a year are worked on average, compared to the OECD average of 1,776. In Mexico there are 10.4 million people who work more than 48 hours. According to the ENOE, of the total number of workers, 14.9% work from 49 to 56 hours per week. 13.3%, more than 56 hours.
One thing to take into account is that we have two work universes, that of formality and that of informality. The vast majority of the modifications agreed upon by legislators affect only the conditions of those who work in the formal economy, around 45% of Mexican workers.
In the informal sector there are a little more than 32 million people. 55.6% of the workers in Mexico are on that productive “planet”. For those who work informally, the news of the reduction in working hours per week has to do with a country to which they do not belong. The same happens with increases in the minimum wage, increases in vacation days and the reform of the pension system.
What happens in the formal economy? As far as working conditions are concerned, Mexican workers are justly beginning to close the gap that separates them from other more developed countries. For companies, the challenge of assuming increasing costs, associated with each of these labor achievements.
How much does each advance cost? How is it paid? These higher costs are a reality that does not appear in the legislative debate. Companies will have to hire additional staff and/or pay overtime, reorganize working hours and incorporate more technology. The distance between the world of the formal economy and the informal economy will grow.
In the future, the numbers may only add up if there is a significant increase in productivity. This is one of the Achilles heels of the Mexican economy. Increasing productivity means doing more with the same resources, but Mexico has not achieved this as a country, despite being where more hours are worked per year, on average.
We work 287 more hours per year than South Koreans and 864 more hours than Germans, but we have lower labor productivity. The worst thing is that in this matter we do not advance. Productivity is lower than in 2006 and in 2022 it fell 3.3 percent. How do we explain this? Can we reverse that decline with these reforms that will bring a new balance between life and work?
