In August, OECD Secretary General Angel Gurria said that labor reform, together with tax and other changes, could boost Mexico's GDP growth by 1 percentage point per year.
Jaime Moreno, 42, a secretary at a Mexico City high school and part of the National University Workers Union, took part in a protest against the proposed reform last week, saying it would result in a "total transformation of labor relations," with temp labor agencies contracting workers for a few months, without the health, pension and housing benefits most workers currently get.
But business groups say the reform is necessary.
"A flexible labor market, that gives legal certainty to employers and employees, is indispensable if we want our economy to grow," said Alberto Espinosa, leader of the Mexican Employers Federation.
Calderon said the new law, by providing training, probationary and part-time work, could especially help create jobs for those who currently have the hardest time entering the labor market: women and young people.
But critics say Mexico's ongoing wave of drug violence, extortion and robbery of freight shipments play a greater role than labor rules in limiting investment here.
"Businessmen don't avoid hiring people in Mexico because it's expensive," labor lawyer Arturo Alcalde notes, "because they earn so much less."
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