Mexico City, Mexico — A new government study details the country’s employment struggles for Mexico’s millennial group, which makes up more than half of the population and who work for some of the lowest wages in Latin America.
Reports show that of all new jobs created in the country, Mexico is one with the lowest wages among the Organización de Cooperación and Desarrollo Económicos (OECD) Latin American countries. The so-called millennials, young people between the ages of 20 and 35, now make up just over half of the Mexican population of working class, and are caught in the middle of a gray area where the educated cannot find work with livable salaries.
Told they would secure their future with a good job if they studied, graduated students are arriving in the labor market only to come up against a scarce supply of jobs for professionals. Jobs that are available, are all too often underpaid and unstable.
A survey from El Instituto Nacional de Estadística and Geografía (INEGI) shows that of the total unemployed population in Mexico, which totals more than 1.8 million, 51 percent of them, about 948 thousand, are young millennials.
Moreover, of the millennials that are employed, almost half of them are employed in the informal sector. That is, they do not have legal benefits such as social security, holiday pay, bonuses or other benefits.
According to INEGI, of the total millennials working, 11.1 percent do not exceed 2,400 pesos per month, while 29.4 percent are paid between 2,401 and 4,802 pesos. Their survey shows that 23.8 percent of millennials are earning between 4,803 pesos and 7,203 peso per month.
A further 13 percent of these young people earn up to 12,000 pesos, while only 4.4 percent of working young people are fortunate enough to earn salaries more than 12,000 peso per month. The remaining 18.3 percent said they did not receive income or did not specify if they had any.
Perhaps one of the greatest myths around millennials is that wages are not an important part of their job expectations. That experience is more valuable and that gaining new skills moves them more to stay in a job, however the Bank of Mexico sowed serious doubts.
The institution recently conducted an analysis of millennials’ behavior in the economy based on surveys of business managers at a national level. One of their first findings is that these young people do care about their salary. A lot.
In fact, it is a more relevant element than for the previous generation, the ‘X’ generation, which includes people between 35 and 51 years of age.
“Most of the sources consulted in all regions coincide in pointing out that for both generations, the interest to obtain greater economic benefits is the main factor that causes employees to leave one job for another,” said the Central Bank.
Nearly 70 percent of company managers surveyed say that higher salaries are the main cause of millennial employee loss.
According to a recent study by HSBC, 94 percent of young Mexicans plan to buy a home in the next 5 years, however, the main barrier is that 66 percent can not afford a down payment due to the country’s scare jobs and low wages.
INEGI’s study also revealed that 66 percent of the millennials that are unemployed have secondary and higher education, and half of those who are underemployed, those who can work longer but do not get the extra hours, are also young people between 20 and 34 years.
Banxico’s study also showed that these millennials are a generation more academically prepared than the predecessor generation ‘X’. About 49.2 percent of milliennials nationwide have at least a high school education, compared to only 37.5 percent of members of the ‘X’ generation.
The bank survey shows that those who are educated and lose their jobs, usually take longer to find another job of equal or better salary and benefits.
On the flip side, human resources specialist Manpower says that in 2016, four out of 10 companies in Mexico found that young people were not ready to face the professional challenges their companies offered due mostly to lack of work experience.
Other companies reported that they simply did not find what they were looking for in the way of technical or professional skills due to lack of candidates.
“It’s a serious matter that companies do not find what they are looking for from the thousands of young people out there looking for an opportunity,” said Manuel Toledo, a specialist at Andersen Tax & Legal.
“Something happens in vocational training, in what the universities teach, in the information that young people have in order to make career decisions,” Toledo explained.
According to the Mexican Institute for Competitiveness (IMCO), in Mexico there is no data for young people to make informed decisions about their educational future. In addition, the offer of cheap higher education programs has been stimulated in universities of dubious reputation that do not match the needs of the labor market.
Millennials are also loaded with another heavy financial burden. This is the generation that will have to pay for the pensions of their parents and grandparents, some of which are among the most generous in the country’s history.
“The millennial generation is being asked to take care of the pensions of a previous generation, whose benefits they will not see, and at the same time they are asked to save for their own retirement with very low wages,” Warns Villarreal of Centro de Investigación Económica and Presupuestaria (CIEP).
CIEP projections show that the so-called Generation Z, which follows millennials, will not suffer from such a complex fiscal environment, as the latter will have already covered most of the burden.
From any perspective, adds Villarreal, a good part of the millennials seems destined to cope with a complex environment in its integration to the economy and at the same time, it is expected to revolutionize workplaces, consumption trends, the way we organize politically. The millennials, it seems, will leave a deep imprint.