The Hidden Cost of the Judicial Strike: Mexico City Businesses Are Drowning

While Mexico City's courts remain closed, there is an invisible economic cost that grows every day. Companies cannot collect debts, terminate contracts, or invest. The judicial paralysis is a brake on the capital's economy.

The crisis in the Mexico City Judiciary (PJCDMX) is much more than a labor dispute. While workers protest in the streets and negotiations with the government remain stalled, the capital's economy suffers a silent but devastating blow. The total paralysis of civil, commercial, and labor courts has frozen the engine that guarantees legal certainty, an essential component of any functioning economy.

For businesses in Mexico City, from the smallest workshop to the largest corporation listed on the Mexican Stock Exchange (BMV), justice is not an abstract concept. It's the tool that allows them to operate, grow, and survive. With the courts closed, that tool has disappeared.

Let's think of the judicial system as a piece of critical infrastructure, as vital as roads, ports, or the electrical grid. It's the system that ensures contracts are enforced, debts are paid, and disputes are resolved in an orderly manner. The indefinite strike in the PJCDMX is, in effect, a "blackout" of this legal infrastructure , and its economic consequences are enormous:

● Frozen Cash Flow: A company that has delivered a product or service and whose customer refuses to pay has no way to initiate a commercial lawsuit to demand payment. Billions of pesos in invoices and debts are in limbo, stifling the cash flow of companies, especially small and medium-sized ones.

● Contracts Up in the Air: Disputes over contract performance, the enforcement of guarantees, or penalties for non-compliance cannot be processed. This creates a standstill in key sectors such as construction, real estate, and professional services.

● Halted Investments: Uncertainty is investment's worst enemy. Who would sign a multimillion-dollar contract or start a new project in a city where there are no courts to resolve a potential dispute? Judicial paralysis creates a risky environment that drives away capital and hinders job creation.

● Unresolved Labor Disputes: Companies are unable to resolve disputes with employees, and workers are unable to demand their rights. This creates an environment of tension and dysfunction in the workplace.

A graph showing a downward economic trend line, with an icon of a broken gavel at the inflection point. The title could be "The Cost of Uncertainty."

The Mexican Stock Exchange (BMV) operates in a volatile environment, influenced by national and international factors. ²⁰ While the market's performance cannot be directly attributed to the local strike, the crisis in the judicial system of the nation's capital—the economic heart of Mexico—contributes to a deteriorating business climate and increasing the perception of risk among investors.

The irony of this situation is that the daily economic cost of this "legal blackout" for the city is, in all likelihood, exponentially greater than the cost of the wage increase that would resolve the conflict. With each passing day, the cost of this paralysis grows, not only in monetary terms, but also in the erosion of an intangible but invaluable asset: the trust that Mexico City is a safe and predictable place to do business.

If you own a business, how has the judicial strike affected you? Share your experience.