Sept. 21 (Bloomberg) -- Mexican President-elect Enrique Pena Nieto urged Congress to pass a labor bill that would ease the hiring and firing of workers, throwing his support behind a measure that his party has blocked in the past.
The bill, which supporters say will boost employment, was presented by outgoing President Felipe Calderon on Sept. 1 and is due for a lower house vote by the end of the month. The initiative would “modernize” Mexico’s workforce, according to an e-mailed statement by Pena Nieto’s transition team. Pena Nieto also said he’d present legislation allowing state and municipal governments to play a larger role in tax collection.
Pena Nieto of the Institutional Revolutionary Party, or PRI, takes office on Dec. 1. He ran his campaign on a ticket of economic overhauls, including labor measures that his party has prevented from advancing during Calderon’s term. Pena Nieto’s support gives the bill a greater chance of passing, said Jose Antonio Crespo of the Center for Economic Research and Teaching.
“It would increase employment and help regulate the vast informal economy,” said Crespo, a political scientist at the Mexico City-based university, said. “Many employers would have less fear of hiring someone knowing that if the worker doesn’t do well he can be fired. This bill has been stalled for about 30 years.”
Mexican law makes it difficult for companies to fire workers and to hire them part-time or on a trial basis, which can lead firms to delay hiring decisions.
Thousands of protesters marched in Mexico City today against the labor bill, saying that it would erode worker rights to the benefit of employers. The Democratic Revolution Party, the third largest party in the lower house, has said it wouldn’t support the legislation for the same reason.
Clauses to improve union transparency may not remain in the final draft of the bill, as many unions with ties to the PRI are lobbying against it, Crespo said.
Mexico’s gross domestic product has expanded an average 1.9 percent a year under Calderon, about half the pace of Brazil. Mexico’s growth rate has overtaken that of Latin America’s largest economy in the past two years.
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