Note published in El Economista, Sector Financiero [Financial Sector] Section by María del Pilar Martínez.
Read the note in its original source
There is extensive rotation between formality and informality
Ricardo Martínez Rojas, partner at the D&M Law Firm, stated that, while not very deep, the proposed reform is necessary given that the Mexican labor market “has many ups and downs, and the first thing that was not foreseen is that salaries would be very low”.
The presidential proposal to reform our country’s pension system, while not deep, is necessary and not because the Afores (Retirement Funds Administrators) system is not good or has failed, but because, unfortunately, the Mexican labor market has had many ups and downs and the first thing that wasn’t foreseen was that salaries would be very low.
Ricardo Martínez Rojas, partner at the D&M Law Firm and Legal Vice-president in Social Security of the Confederation of Industrial Chambers of the United Mexican States [Concamin], explained that the labor market itself is very uneven, “people are switching jobs very often or they leave and work informally, that is, the Mexican workforce itself did not allow the system to become properly strengthened. There was no other choice but to lower the contribution weeks from 1,500 to 1,000, but with a transition that will begin with 750 weeks ”.
However, he said that a concern remains because the social quota disappears in the case of workers earning four UMAs [Units of Measure and update] or more when, before, all Mexican workers had the right to the approval of the social quota, but “in the case of higher salaries it decreases, and I don’t believe that this is right because, in my opinion, all Mexican people have the right to receive aid from the government, not only people with low salaries, I don’t like the fact that the social quota applies only to very small wages, I believe it is unfair to the Mexican population”.
Martínez Rojas, also a partner at the D&M Law Firm, pointed out that, on the topic of the fees charged by the Afores, in regard to commissions, “the commission in Mexico is very high, if you take into account that the average between Colombia, Chile and the United States is 0.56% and in Mexico it reaches 1%, that is, twice as much, which has an impact on the workers of almost 12% of their savings”.