Although many South and Central American markets pose challenges for global employers, such as limited skills availability, low productivity and more complex regulations, Chile has experience significant improvement due to a substantial labor reform in recent years.
In the wake of natural disasters like hurricanes many markets experience changes to the labor force, Puerto Rico is unfortunately no exception. A result of a fundamental shift in workforce dynamics, due to a multitude of both general and technical infrastructure in need of rebuilding, global employers are shifting resources into other markets. This rebalances the existing workforce skills, making skills available that are aligned with the workforce space.
Mexico remains an attractive global market for investment due to proximity to North American markets such as the United States which allows for logistical benefits as well as cost savings on skills. However, a higher than the regional average employment tax figure may be cause for closer evaluation of the market especially in certain sectors that could be subject to additional taxation or import tariffs.
Size of the bubble reflects the Relative Availability of each market, while the color reflects Relative Regulation
Average wage, though a great tool comparison, is predominantly driven by the ratio of highly skilled jobs to lower skilled jobs. Markets with a higher volume of highly skilled jobs will average higher wages than markets with a high volume of low skilled jobs. Therefore, not all markets with lowest wage are the lowest for rates for a given skill.
Manufacturing wages are a leading indicator of rising costs as they typically rise before the wages of professional skills. Manufacturing wages are particularly sensitive to inflation and statutory burdens. Therefore, though the cost of manufacturing skills may be much lower than more highly skilled jobs, they are generally the first to reflect the rising cost of wages in a particular market. Due to increased digitization and automation some markets are showing higher wage increases than others. In particular, those driven by other industry production such as automotive and pharmaceutical. With reference to the automotive industry in the Americas region, the United States, Mexico and Brazil display these higher manufacturing wages. With regard to the pharmaceuticals industry, the United States is impacted by these higher manufacturing wages driven in part by the higher concentration of pharmaceutical manufacturers in higher cost metropolitan areas. Puerto Rico has experienced rising wages in Manufacturing driven by the direct impact of increased pharmaceutical production following last year hurricanes.
Employment tax is a basic statutory burden that employers need to add to wages when calculating the cost of skills in a workforce market. It is typically the first metric of consideration beyond the wages themselves. Wages largest component of total labor cost. However, taxes are the best indicator for total cost. They are also more representative of the labor cost per market than insurance as insurance appears more standardized, while taxes are unique to each market.
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