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'Labour market reforms will create 400,000 jobs in Mexico'

Posted on Oct 02, 12:36PM | IANS

Mexico's economy could end up with "400,000 additional jobs on top of the ones we are currently creating" if the Senate approves the labor market reforms passed over the weekend by the lower house of Congress, Labor Secretary Rosalinda Velez said.

The labor law overhaul that passed in the lower house of Congress early Saturday would regulate outsourcing and make it easier to hire and fire workers.

Passage of the bill in the lower house, a move that came about two months before President Felipe Calderon leaves office, is a "historic event", Velez said in a press conference.

The legislation retained about 80 percent of the content of the bill proposed by the president, the labor secretary said.

The bill would lead to fewer workers being employed in the informal sector and create 400,000 jobs on top of the 650,000 already created in Mexico this year, Velez said.

The fact that the legislation does not include measures for greater transparency in union operations does not mean that this area is "untouchable", the labor secretary said in response to a question from reporters.

Institutional Revolutionary Party, or PRI, lawmakers changed some provisions of the original bill aimed at making unions more transparent, with the final draft leaving them free to choose their leaders under the election format of their choice: either secret ballot or a show of hands.

The lawmakers also scrapped another provision that would have made union finances subject to external audits.

The text of the original bill had stated that all unions refusing to provide information - to the workers who ask for it - about the use of union dues could lose those funds entirely.

The legislation passed by the lower house still has the potential to make unions more democratic in Mexico since "we are not openly leaving the secret or public vote unilaterally to union leaders", Velez said.

The goal of the bill in the end is "the promotion of quality jobs" and "incorporating workers into formal employment," the labor secretary said.

The controversial labor law overhaul was the first order of business for the Congress that emerged from Mexico's July 1 general elections.

Some 28.87 percent of Mexico's labor force, or nearly 14 million people, is employed in the informal sector, the National Institute of Statistics and Geography, or INEGI, said in a report released last month.

Mexico's official unemployment rate is 5.39 percent, the highest level in the past 11 months.

The INEGI considers a person to be employed if they are older than 14 and work at least six hours a week in any occupation.