News and Analysis: October 22-28

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1 - INCREASED MIGRATION SIGNALS IMPROVING JOB MARKET
2 - LABOR REFORM STAGNATES IN CONGRESS

An increase this year in migration from Mexico to the US, reported by a bi-national study led by El Colegio del Norte and the University of Southern California, indicates an improving US employment market, at least in low wage jobs.  For the past several years, the political class boasted of migration at a standstill after decades of increases, attributing the decreases to beefed up border patrols.  Migration declined from 2008 until the end of 2011, then reversed trend in the first two quarters of 2012.  Data is collected by the Border Survey of Mexican Migration, which relies on interviews with undocumented migrants, both those heading north and those returning to Mexico.  Migration dynamics often prove to be a leading economic indicator, in that migrant workers begin to respond to economic changes before they are fully realized in the economy.  In this case, the indication is that US employers are looking for cheap labor, perhaps below minimum wage in some sectors, as an anemic recovery slowly begins to take root.

2 - LABOR REFORM STAGNATES IN CONGRESS
Outgoing President Felipe Calderon’s labor reform bill is stalled in Congress and may not even reach a final vote before the December 1 inauguration of Enrique Pena Nieto.  The politics are complicated, but with three major parties in Congress, a final bill requires agreement by at least two.  Calderon’s National Action Party wants a bill that would replace daily labor contracts with hourly pay, introduce 90-day probationary periods for new hires, reduce payments to fired workers, and legalize outsourcing, thereby making unions largely ineffective.  Calderon also wants to abolish so-called “white” unions by forcing union transparency, including the right to direct and secret elections of union officials and the public registry of unions and contracts.  The centrist PRD and its affiliated independent unions, led by the National Union of Workers (UNT), support the second set of goals, while vehemently opposing the first.  The PRI, closely allied with corrupt, undemocratic unions led by the Confederation of Mexican Workers (CTM), will live with the first set of goals but opposes the second.  The lower House passed a bill several weeks ago that included only the anti-worker measures, but the bill ran into trouble in the Senate, where a PAN-PRD coalition re-inserted the union transparency measures and returned it to the lower House.   Legislators announced this week the bill will no longer be considered on a fast-track process, which would have forced a final vote by the end of October.  With both “white” and democratic unions threatening a national strike, and the political class unable to reach a consensus, it appears labor reform may be dead for this year.