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Why “Changarros” are the real life of the Mexican economy

Mexico relies heavily on micro enterprises for the number of jobs it offers.

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Why “Changarros” are the real life of the Mexican economy
Why “Changarros” are the real life of the Mexican economy

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By Antonio Sandoval

The mexican economy Due to the number of jobs they offer, this depends to a large extent on small businesses. Without this, the social pressure would simply be unbearable because there would be no way to employ millions of Mexicans.

The final results of the 2019 economic censuses, which were carried out last year by the National Institute for Statistics and Geography (INEGI) and published last week, show the relevance of the “changarrizaciĆ³n” of the economy without being a derogatory term, but on the contrary a whole tribute to the great economic pillar that it means.

Labor force
Reuters on high level

More junk, more jobs

According to INEGI, there were a total of 6,373,169 establishments (as INEGI calls them) in Mexico in 2019, and although this is not said, it actually refers to them Small businesses, colloquially known as “Changarros” because of their numbersSmall businesses (with a maximum of 10 employees) are the vast majority of companiesdominate with 94.9 percent of the total. Based on these numbers, we have a total of 6 million 48 thousand 137 junk in Mexico.

Official figures indicate that this type of facility has increased its growth rate compared to previous 2014 economic censuses, but is below that reported in the same exercise that was performed in the 2009 economic censuses a decade ago .

In the past 5 years, the average annual growth rate of companies in Mexico has been 2.4 percenthigher than the previous 1.9 percent, but lower than 10 years ago at 3.7 percent.

In other words, the opening of businesses is currently growing at a lower rate than a decade ago. This is a worrying sign that partially explains the dynamic of the economic slowdown that the Mexican economy was in before the pandemic.

A positive aspect lies in the fact that the average growth rate of Mexican businesses in the last decade, at 2.38 percent, is slightly above the annual average of GDP in the same period of 2.15 percent, one hundred. In the same decade there was an increase of 1 million 229 thousand 111 new wastesThis means an annual average of 122,000 911 units that offer jobs.

Changarro's hairdresser
Reuters on high level

Since these are jobs, we cannot ignore the large escape valve for working pressure that these facilities or tricks mean for our country’s economy.

According to INEGI, the country’s economically active population (PEA) is 57 million 328,000 364 people; Their figures also show that the companies employ a total of 36 million 38 thousand 272 Mexicans.

With the previous numbers, we can calculate that this source of employment, that of businesses, provides work for 62.86 percent of the country’s EAP. In other words, more than half of Mexicans work there, this is the relevance of this “escape valve for work pressure”, the other is partly the informal economy, For the first time in history, formal and informal facilities were also found in the censuses.

INEGI stated that 37.4 percent of the registered companies correspond to the formality and the remaining 62.6 percent to the informality, without forgetting that many units of the country that belong to the informality are not even discovered.

The high demand for jobs has led to an increase in employment in this type of company, as can be seen from the growth rates. In absolute numbers over the past decade The Changarros created a total of 8 million 310 thousand 866 new jobsat a rate of 831 thousand on an annual average.

Changarros tacos
Reuters on high level

The added value for the economy

The Changarros also create high added value for our country’s economy; according to the INEGI figures from the 2019 economic censusesThis indicator was 9 thousand 983 million 800 thousand pesos at constant 2018 pricesThis was an increase of almost 2,500 million pesos over the previous 2014 census.

The sectors that generate the greatest added value are: production with 32 percent, trade with 21.4 percent, private non-financial services 20.8, mining 9.5, electricity 2.2 percent and the remaining 14.3 through other activities generated.

The relevance of these economic units in a country like Mexico became clear in the census conducted by INEGI. Facilities are an integral part of its economic structure for the country, and over the years, his influence does not stop, on the contrary, he advances with firmness.

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