The recession that hit economic activity in the first quarter is having a profound impact on real income, activity, and employment. Since last December, 275,000 salary accounts have been unsubscribed, indicating a significant decline in economic stability. The construction industry has been hit the hardest, with 57,382 registered jobs lost in just five months. This has also had a significant impact on the informal sector.
The public sector has also seen a significant reduction in employment, with 11,534 positions lost in just four months. According to the Ministry of Labor, Employment, and Social Security of the Nation, an additional 62,920 jobs were lost from January until February. Analysts predict that unemployment could reach around 9% by the end of the year.
The recovery of employment is expected to be slow, with little chance of strong growth this year. Sectors like industry and commerce have seen significant reductions in activity and employment. On the other hand, sectors like mining and agriculture are showing growth but do not generate as much employment as before.
Economists predict that unemployment may deepen in the coming months and reach around 10% by the end of the year. The quality of employment is also a concern as there is a potential shift from formal to informal employment due to this crisis. Structural reforms are seen as necessary to address this increase in informal employment over the past decade.
The ongoing employment crisis is prompting a debate on labor reforms that aim to generate genuine employment opportunities for people while addressing underlying issues such as low wages and job security for workers. While some believe that reforms are necessary to create sustainable jobs in formal sectors such as manufacturing and services, others argue that these measures may not be sufficient or effective if they do not address fundamental problems with economic policies such as corruption or lack of infrastructure development.
