Working nine ’til five?

The transition from a 48 to 40-hour work week in Mexico. 

In recent years, Mexico’s Congress has ventured into the ‘battle of the work hours’, eyeing a shrink from the standard 48-hour week to a promising 40-hour one. Spearheaded by Deputy Susana Prieto, this initiative shouts ‘change’ in the country’s labour sphere, aiming to redefine Article 123 of the United Mexican States’ Constitution for a shorter, more humane work schedule. However, like untangling headphone wires, this feat doesn’t untangle easily; the bill’s journey involves multiple stages, requiring approval from the Senate and enactment in 17 local congresses to be fully realised.

“Rather than working, in most cases, people pretend to work because productivity is the worst in the OECD.” The labour consultant for various private sector boards expanded, “there is a regressive element that is the tyranny of believing that many hours of work are a matter of getting ahead and that is a fallacy.” Mexico, Costa Rica and Colombia, despite clocking longest hours in the Organisation for Economic Cooperation and Development (“OECD”), aren’t sprinting ahead in productivity. Chile, with less grind time, showcase significantly higher weekly incomes, “in dollars the difference between what Chileans earn per week compared to Mexicans is double.” The advisor to multilateral organisations in the labour sector continued, “now, if we compare it with other European countries such as the United Kingdom, France or Sweden, the difference can even quadruple.”

Yet longer shifts don’t mean better output or economic growth; they mean more snores at the desk, “associated with higher levels of fatigue, stress, mental health problems and other illnesses, especially if we consider that we are in a context where many companies require their workers to be available all the time,” highlighted a university lecturer on labour issues. While larger companies can invest in tech and pass costs to consumers, small and medium-sized enterprises (“SME”) face challenges adapting, with “the industrial and commercial sectors” potentially bearing the brunt of these changes.

“The deepest cost is in the informal economy that is approaching the dangerous number of more than 33 million Mexicans, almost 60% of Mexicans of working age,” commented a source in the Ministry of Labour. “That is the danger in Mexico, informality where there are no minimum working conditions, no social security and a largely criminalised or narcotised economy, which is worse.”

“That is the danger in Mexico, informality where there are no minimum working conditions, no social security and a largely criminalised or narcotised economy, which is worse.”

A labour consultant for various private sector boards, Mexico

However, experiences from other countries, such as Chile, where change beckoned, reveal profound benefits. Working mothers, for instance, found they could now spend more time with their families, “women are progressively occupying spaces that were previously almost the monopoly of men.” The labour consultant in the private manufacturing sector retorted, but “there is an underlying problem here, and that is the serious mistake of the Mexican government in eliminating childcare centres.”

Deputy Susana Prieto’s proposal stands as a pivotal effort to amend the Mexican Constitution, to carve a 40-hour work week and mandatory rest days. “The next government must use the laws to force a better redistribution of company profits because Mexico is punished in this area by organisations such as the ILO and the OECD,” asserted the labour consultant. Although the ruling Morena party and its allies sought swift passage of the bill in the Plenary for subsequent Senate and Presidential approval, the constitutional reform is a long process. “So, it most likely will not be ready by 2023, but in the event that there are favourable votes in the chambers, it will surely be ready for next year in the second half of the year,” implied the advisor to multilateral organisations in the labour sector.

This method ensures engagement with opposition voices and aligns with the International Labour Organisation’s recommendation, fostering democratic decision-making. Notably, consultations with representative employer and worker organisations form an integral part of this deliberative process, acknowledging the concerns of hourly-based workers who might face income reductions. “There can be no deterioration in workers’ conditions, in their social benefits, in the commitments made to them by employers, nor does it imply a reduction in wages,” asserted the advisor with over 15 years experience. Remember Colombia? They fine-tuned hourly wages too and made provisions to adjust hourly wages, safeguarding employees from financial setbacks.

“There can be no deterioration in workers’ conditions, in their social benefits, in the commitments made to them by employers, nor does it imply a reduction in wages.”

Advisor with over 15 years experience, Colombia

The proposed transition imposes contrasting implications for workers and businesses alike; shorter hours may mean less in the wallet for punch-card tickers, but it’s rainbows for work-life balance. Yet, businesses are eyeing up higher payroll costs and an HR puzzle to solve. “There is a lot of uncertainty and different sectors have spoken out to warn of the possible loss of jobs that could be generated by the measures that are decided to be adopted,” warned the university lecturer. Estimates from AON’s 2023 Compensation Survey project an average 12.5% increase in payroll costs due to the mandated reduction and firms anticipate the need to increase staffing levels by approximately 14% to keep productivity alive.

“The Mexican Congress has reached the end of its term, so it will be the task of the new Congress that will begin on 1 September 2024.” The labour consultant for the manufacturing sector elaborated, “we will see how committed those who win re-election are to labour issues, where there is a warning for Mexico. The 40 hours of work is only the beginning.”

“We will see how committed those who win re-election are to labour issues, where there is a warning for Mexico.”

The labour consultant for the manufacturing sector, Mexico

The impending shift from a 48 to a 40-hour work week in Mexico embodies a significant legislative initiative with multifaceted implications. While the process remains underway and subject to further legislative scrutiny, the potential benefits in terms of enhanced work-life balance, increased productivity and improved overall wellbeing for workers are promising. The spotlight’s on a collaboration of lawmakers and businesses, staging a smooth transition. Ah, the saga of labour trends prioritising worker wellbeing and a hint of productivity in this modern work vaudeville!

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