Baja California Is the State with Best Working Conditions
By Wendy Fry
According to the publication ‘El Economista’ State Occupation Quality and Competition Index, Baja California placed first for the entire Mexican Republic with 89.1 points out of 100 possible for working conditions across the state.
The state also leads the nation in job creation during the pandemic. Baja California Secretary Mario Escobedo of the Secretaría de Economía Sustentable y Turismo (SEST) said that “even with the economic effects of a global pandemic, US$3.16 billion in private investment capital has been recorded and to date we have been able to generate 45,065 new jobs, making the state a national leader in this critical area.”
“Thanks to the positive scenario offered by Baja California, our state continues to lead in two of our main priorities, investment and job creation,” Escobedo added.
Working conditions in Mexico were under scrutiny as the U.S.- Mexico-Canada trade deal came into force this year, putting pressure on the country to strengthen labor rights. More than 900 workplace deaths nationwide were recorded annually from 2016 to 2019 by IMSS – Mexico’s social security and worker healthcare body.
Nationally, workplace accidents and deaths have also become a greater concern during the COVID-19 pandemic as companies slash budgets and struggle to implement costly measures that will prevent the spread of the coronavirus in warehouses and industrial jobs.
But whereas the national labor ministry struggles with effectiveness and data collection, Baja California has an extremely active state labor secretary who promotes workers’ rights by broadcasting audios about labor law and rights in urban centers of the state.
The tapes are also broadcast in agricultural zones in Triquis, Mixtec and Zapotec languages. Labor Secretary Sergio Moctezuma Martínez López conducts surprise visits of maquiladoras, often streaming the inspections live on Facebook. His department collects anonymous tips from workers via social media and investigates them. In April, he shut down 64 factories, sending approximately 18,000 maquiladora workers home with full pay for 30 days.
“We are clear about the instruction of Governor Jaime Bonilla Valdez, in labor matters, to protect the rights of the most vulnerable people, and that all Baja Californians are aware of them and that they are respected,” he said.
Escobedo agreed saying “no company is above the health of workers. So, this effort [to get production going again] is not misunderstood, what we want is to reactivate without putting anyone at risk.
The states at the higher levels of the State Occupation Quality and Competition Index showed greater strength in the labor market, showing how their economic revival plans and support programs gave positive results and how the epidemiological traffic light evolved for the reopening of nonessential activities.
Baja California placed first in the State Occupation Quality and Competition Index because it showed evidence in the eight additional occupancy and unemployment rates during the third quarter of this year, after COVID-19’s national lockdown ended, according to Escobedo. Some states began reopening their economy in June, while Baja California was implementing protocols and helping essential manufacturers continue operating.
The entity achieved first place in partial occupation, 6.92% of the economically active population (PEA), the lowest rate in the country; and second place in unemployment at 2.75%; third place in underemployment at 7.59%; fifth in informal sector occupation at 20.09% of those employed; and was the fourth largest state with the highest percentage of wage earners, 75.10% of those employed.
While comparing thirdquarter rates in 2020 versus 2019, Baja California declined in unemployment, general pressure, critical conditions of occupation, and job informality, as well as increasing wage earners. The state was the highest generator of formal jobs (as registered by IMSS) in the period between January and October of this year.
While these actions have been good for the economy, they have come at a cost for the public health emergency. Baja California was one of two states in Mexico to return to the “red light” maximum risk level earlier this month, and its rate of death from COVID-19 is among the highest in the nation.
State leaders said Baja California’s geographical location next to the border was a greater factor in the increased spread of COVID-19 than its economic recovery.
The coronavirus has dramatically increased global demand for medical equipment. In Baja California, the medical device sector was already growing before the pandemic. While other industries have been paralyzed, the medical equipment sector has positioned Baja California as ideal for new ventures.
Two North American companies, Medline and Centerpiece, which produce sterilization equipment and other medical products, announced investments of close to US$200 million in Baja California this year. The industry in Baja has been growing by between 9 percent and 10 percent annually over the past five years, with investments of up to US$800 million per year.
Due to its proximity to California and Los Angeles, the world’s leading consumer city, and increased demand for specialized technology labor, such as electronics and medical devices, Baja California’s available industrial space is becoming almost nonexistent, Escobedo said.
Interestingly, Baja California is one of the states where goods are manufactured that people bought more frequently during the pandemic, because they had to stay at home, such as televisions, electronic devices and products from the medical sector.
Specialists say that Tijuana also serves to triangulate the delivery of goods to U.S. consumers at lower costs. The logistics sector has seen dramatic growth in the city of Tijuana, but not to meet domestic demand, but to fulfill orders in the U.S.
These fulfillment centers on the border, mainly to meet demand in the United States, are a new component that has greatly boosted absorption of available industrial real estate. This is one of the reasons why industrial properties in Tijuana report their lowest available space rate by hovering around 2% of total inventory, when its annual average ranks between 3.5% and 3.8%.
According to Commercial Real Estate Reports from CBRE, Cushman & Wakefield and others, from January to September of 2020, Tijuana’s industrial warehouses recorded a gross demand of 3.5 million square feet and 1 million 850,000 feet of net absorption; thus, making the on-hand or available inventory at about 1.6 million square feet. All of this is good news from industrial developers that invest in Baja California, business experts said.
Despite the current health limitations, medical tourism activity has strengthened in Baja California and investments of more than $869 million dollars in the health and wellness sector were made this year alone, highlighted Escobedo, Secretary of Sustainable Economy and Tourism (SEST) of the State of Baja California.
The head of the Secretaria de Economia Sustentable y Turismo (SEST) recognized the importance of medical tourism for the region and the country by welcoming other tourism ministers, mayors, entrepreneurs and academics at the opening of the XL Ordinary Session of the Association of Tourism Secretaries A.C. (ASETUR).
Escobedo emphasized that the potential of the State allowed for 27.9 million visitors in 2019, generating an economic benefit of US$119 billion pesos or US$5.9 billion. Escobedo also said tourist activity has been severely affected by the pandemic, so it is necessary to adapt to new ways of experiencing and traveling around the world.
“This session was designed to pose challenges, but also strengths and areas of opportunity to further consolidate tourism as an engine of our economy, employment and well-being,” he said.
He explained that players in this sector have a great opportunity to build the necessary tourism development model for Baja California, Mexico’s northern border region, and for the country. Escobedo also mentioned particular factors that are strengths of the region, such as its geographical location, thousands of kilometers of coastlines, various natural and cultural attractions, desert and sea landscapes, varied climates, services and infrastructure, the Baja-Med gastronomy and, above all, the state’s hospitality and warmth.