The Inter-American Development Bank (IDB) is concerned that job losses in Mexico due to the COVID-19 crisis will be much worse than during other past crises and that the impact on the labor market will persist for many years.
According to Milenio, the IDB’s senior specialist in labor markets and social security, David Kaplan, explained that the loss of formal jobs in the country reached 700,000 over April. For him, everything points to April 2020 being the worst month for Mexican jobs since 1995.
“It is very possible that the informality rate will rise. And what I would highlight as a risk is that it takes many years for the unemployment rate to recover. And there is a great risk especially for young people. There are many studies that show that youngsters entering the job market at a bad time will face difficult times for years. Researchers call it the scar effect: a bad start in the job market may have decades-long effects,” he pointed out.