Sunday, April 17, 2005

Something to talk about other than the desafuero in Mexico....

Finally.

First, it seems that legislators are talking about the proposals to reform Mexican labor law again. Proposals have been floating around for the last decade.

"Official" unions, or those affiliated with the PRI, have resisted reforms that might give more space to "unofficial" or "democratic" unions. I put "democratic" in quotes because all unofficial unions are not, by definition, democratic, though most claim to be.

"Unofficial" unions want reforms that will give them more room to organize workers, but fear that a full-fledged reform will reduce protections for workers and unionism, in general.

This is a well-founded fear. Employers have been trying to get formal labor reforms to relax restrictions on lay-offs and restructure union rules.

These differences have led to a stand-off. Everyone wants reform for different reasons, and fears the types of reforms that the other political actors want.

Second, the proposed privatization of public sector pensions is back in the news.

Since the early 1990s, there has been discussion of privatizing public sector worker pensions, but union opposition has blocked reform proposals. (I have a book manuscript that discusses this, if you're interested....) In any event, the Fox administration has drafted a new proposal and has been shopping it around to the unions, which happen to have their own problems. I believe the ISSSTE reform won't go anywhere given the distractions of the desafuero and the jockeying that will begin soon for candidacy for the 2006 presidential elections.

Interesting facts mentioned in the article:

The IMSS privatization is costing the federal government 35% more than expected so far, and costs are expected to rise throughout the next decade.

The average replacement rate so far for the private system is about 45%. To receive the minimum pension (which is 1 minimum wage), middle-class workers (making 5 times the minimum wage) will need to have real returns on their accounts of at least 8% for 25 years of contributions. Real returns have been much, much lower so far.

Not a shining example for privatization, I'm afraid.

posted by Michelle @ 11:24 AM,

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