The best and worst states to work in Mexico in 2023

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Sinaloa and Chiapas are the states that are located in 2023 at the two extremes of the x-ray of the country’s federal entities with respect to the conditions they offer to their workforce; they have remained in the same position for the last three years.

According to the new edition of the State Competitiveness Index (ICE) of the Mexican Institute for Competitiveness (IMCO), Sinaloa remained at the forefront this year as the state with the best conditions for employment, a position it has held since 2021. Therefore, at the bottom of the table is Chiapas, a site it has had since 2001.

Through the ICE “Labor Market” sub-index, the IMCO measures “the efficiency of the main production factor: human capital. Specifically, characteristics that are essential for the adequate performance of workers and employers are considered since this is decisive to establish conditions for growth and development in each of the federal entities. Those states in which workers are more and better trained, and wages are more competitive, are more attractive for talent and investment.

Under this measurement, the list of states with the most competitive labor market is complemented by Nuevo León, Baja California Sur, Jalisco and Sonora. Meanwhile, after two years among the best states to work for, Mexico City fell from position four to seven.

For their part, in addition to Chiapas, the least attractive entities for employment are Guerrero, Oaxaca, Guanajuato, Tlaxcala and Puebla.

The elements analyzed to determine the competitiveness of the labor market are six:

Average income of full-time workers

Level of wage inequality

Percentage of people with perceptions below the well-being line

Proportion of the labor force with working days longer than the legal limit of 48 weekly hours

Population with higher education

Population with access to job training

At a general level, highlighted the IMCO, the states advanced in the average salaries they offer. The national average in this line is 8,707 pesos per month, which implies an improvement of a little more than 500 pesos compared to what was reported in the ICE 2022.

However, the disparity throughout the country in this line is notorious. Baja California Sur is the entity with the best level of salaries, with an average of 12,934 pesos per month, 2.5 times more than the average perception observed in Chiapas, the last place in the ranking, with 5,209 pesos per month.

Another indicator in which progress was registered, although more marginal, was in the proportion of workers with shifts of more than 48 hours a week, which went from 26.4 to 26.3% at the national level in the annual comparison. The entity with the worst performance in this aspect is Guanajuato (36%); the best evaluated, Jalisco (16%).

Nearshoring, opportunity for the labor market

When presenting the results of ICE 2023, IMCO emphasized the opportunity offered by nearshoring to boost the economic growth of the states, but warned that this requires not only infrastructure, but also human capital prepared to take on these new challenges.

“Nearshoring, that is, the relocation of production chains by transnational companies, is linked to competitiveness. The states of the center and north of the country have better conditions to attract investments related to this phenomenon, which is explained by their deployment in logistics and energy infrastructure, a population with better access to education and health, and better integration of the manufacturing industry with the outside world”, detailed the institution.

One of the key elements in having the right workforce for that challenge has to do with access to both higher education and ongoing job training. In the first aspect, at the national level, one in four people over the age of 25 have professional or technical training. Mexico City is the entity with the highest proportion of population in this condition (41%); at the other extreme is Guerrero (14%).

As for job training, the picture is less encouraging. At the national level, only 3.1% of workers have access to this type of training, a reduction of 1.2 points compared to what was reported in 2022. In fact, only four of the 32 federal entities reported that more than 5% of workers has this benefit. The best evaluated state in this line is Campeche (10%); the worst performer, Zacatecas (1%).

This scenario, highlighted the IMCO, poses a series of public policy challenges, since “trained talent is required for the labor market to adapt to the upcoming challenges.”

Source: El Economista