International Business : No Work for the Weary : Mexico’s Economy Inches Forward but Jobless Ranks Grow

MEXICO CITY —  It’s been 27 years since Anastasio de Jesus kissed his wife goodbye, cast a wistful glance at his hardscrabble farming village and set out for Mexico City, seeking his dreams in the main Zocalo square, behind a painted sign reading “Mason.”

Toiling at day jobs, he eventually sent for his wife and gradually achieved his ambitions. A handsome brood of nine children. A city apartment. And a farmhouse with four bedrooms--six if you count the cattle feed rooms. “I sweep them out to make guest quarters,” he says proudly.

These days, De Jesus still waits patiently in the Zocalo. But he is lucky to work half the month--earning perhaps $80.

“The moment will soon come when we won’t be here,” said De Jesus, 49, one in a line of about 50 men sitting dejectedly behind signs reading “Plumber,” “Mason” and “Electrician.”

“We’re going broke. There’s no work.”

In big-picture terms, Mexico appears to be turning the corner. Exports are booming, foreign investors have been returning in fits and starts, and the economy is starting to inch forward. But what looks like a recovery from afar still looks like despair from up close.

Last week, headlines blared the unexpected news: Monthly unemployment, after falling for five months, surged upward to 6.4%--the highest January figure since the government began conducting the survey in 1987.

The government’s unemployment numbers give little idea of the economic earthquake that has shaken Mexico. Official figures exclude those who work as little as an hour a week at odd jobs. Real unemployment is considered to be closer to 15% to 20%--or even higher. In a startling February poll, nearly one in three Mexico City residents reported they or a family member had lost their jobs in the last six months, according to the MORI opinion firm.

Equally grim: Eighteen percent said a child in the family had been forced to go to work recently because of the economic crisis.

“This is an unprecedented situation. We have never known these levels of unemployment in Mexico,” said Maria Xelhuantzi Lopez, a labor expert at the Autonomous National University of Mexico.

President Ernesto Zedillo dismissed the latest jobless figure, pointing out that January unemployment is always high, as temporary Christmas workers are laid off.

But, addressing a union convention, he acknowledged growing concern over unemployment. “At this moment, our priority is the protection and creation of jobs, without ignoring the fight against inflation,” he said.

The unemployment crisis is an offspring of the government’s sharp devaluation of the peso in December 1994, as Mexico came to the brink of financial default.

The devaluation sent prices of imports skyrocketing. As inflation surged, interest rates jumped. The one-two punch knocked out many consumers, who suddenly couldn’t afford red meat or daily bus tickets--never mind masons.

As factories and stores shut their doors, an estimated 1 million of Mexico’s 35 million workers lost their jobs.

Clearly nervous about the potential for social unrest, Zedillo’s government has announced an emergency jobs program that will temporarily employ 700,000 people this year planting trees, paving roads and digging ditches.

A 30% jump in exports last year, spurred by the cheap peso, has also led to some new jobs. But many exporters are believed to be large, machinery-intensive companies that have absorbed few new workers.

What makes the current crisis particularly severe is that Mexico had already been downsizing. As the country’s protected economy opened in recent years, businesses shed employees in order to compete internationally.

So when the crisis hit, many workers were worse off than in 1982, the last time a wave of recession smashed onto Mexican shores.

“The crash in the early 1980s came after decades of sustained growth,” said Harley Shaiken, a labor specialist at UC Berkeley. “The current crisis is built on over a decade of economic stagnation or decline.”

The crisis hasn’t walloped only those who have lost jobs. For years, the government encouraged small wage increases to contain inflation and encourage foreign investment. Then came the crisis. Today, Mexican salaries buy less than half what they did 20 years ago, economists say.

“We haven’t reached the point of a social explosion. But we’re near the limit,” labor expert Lopez said.

Two major union organizations called on the government this month to boost workers’ incomes. Currently the minimum wage is less than $3 a day. In desperation, more and more people have turned to the streets to make money.

De Jesus points to growing numbers of beggars circulating through the Zocalo. Vendors selling chewing gum, cigarettes, newspapers and other goods increasingly crowd city streets.

Then there is the rash of car thefts, break-ins and muggings that have terrorized Mexicans in recent months.

“The crisis makes people rob,” De Jesus said. “There’s no work.”

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About That Recovery . . .

For a while, Mexico’s official unemployment rate was falling, supporting other evidence that the country’s deep recession had bottomed out. But January’s rate soared to a nine-year high. Economists say the government’s numbers seriously understate the problem and that the actual unemployment rate approaches 20%. The figures (not seasonally adjusted) since just before the Dec. 19, 1994, peso devaluation:

Jan. 1996: 6.4%

Source: Mexico National Institute of Geographical and Informational Statistics