More precarious and unprotected: the paradoxes behind the increase in employment in Colombia

Unemployment affects 12.7% of the Colombian active population, according to the January report prepared by the National Administrative Department of Statistics (DANE). From the above it can be deduced that today there are around 22.02 million people employed and 3.1 million looking for work. In its annual reading there was a reduction of one percentage point and informality fell two points to 56.4% and still encompasses 12 million citizens. Formal data continues a positive trend and yet the outlook is not encouraging.

When making a zoom From the figures it can be concluded that the decrease in several of the indicators has translated into the addition of thousands of jobs marked by precariousness and the absence of social protection. In fact, the surprises in the measurements month after month predict a rebound in the number of unemployed in its annual reading. The unemployment rate has already gone from 10% in December to 12.7% in January in a habitual behavior and attributable, in part, to the dynamism of commercial activity at the end of the year.

The Colombian economy continues to distill modest and sometimes contradictory data after the shock of the pandemic. Mauricio Salazar, economist and professor at the Javeriana University, details that in parallel with the reduction in unemployment, there has been an increase in the number of workers who earn between zero pesos and a minimum wage (1.3 billion pesos): “In 2022 it was 44% and in 2023 it rose to 46%. They are small and probably normal changes in an economy in the process of deceleration, but it is interesting to see how that portion is expanding in salaries that are not necessarily productive.”

The National Association of Financial Institutions (ANIF) has carried out detailed monitoring of the issue and has shown, by contrasting the last quarters of 2022 and 2023, that informality, understood as the number of workers who do not contribute to health or pensions, is has remained practically unchanged in sectors such as agriculture: “It went from 86.9% to 85.1%,” explains researcher Luz Magdalena Salas, “this can be attributed, for example, to the increase in day laborers and laborers who do not receive a formal employment contract and do not comply with their social security contributions.”

This is a process of precariousness that has become more acute in commerce and industry. According to ANIF analyzes and DANE figures, business owners have generally preferred to shift the increase in the final costs of their products to their employees rather than to their customers. “We have studied the transition in the number and type of workers hired. Between 2019 and 2023 we have seen an increase in the number of workers in sole proprietorships and independent companies,” says Salas. Formalization in this type of small companies or businesses went from 20.8% to 9.6%. This makes the data on the increase in job creation apparently positive, but on closer inspection it presents several problems.

Newsletter

The analysis of current events and the best stories from Colombia, every week in your mailbox

RECEIVE THE

For the ANIF researcher, it is a method to cushion the losses in profits in the last quarters of the year. “After a quarter of losses, what many have done is stop contributing to pensions or health. Even for companies with 2 to 5 employees, we have seen that the way to respond to the drop in sales has not necessarily been to lay off their workers, but rather to keep them in more precarious conditions.” Another factor that is alarming for the professor of Economics at the University of the Andes, Andrés Álvarez, is the excessive growth of employment in the public sector.

There is already talk in some cases of a year-on-year increase of 300%: “In principle there was criticism because the Government was underexecuting last year's budget. But at the end of the year it accelerated and much of its growth in public spending was allocated to employing people in the State.” For Álvarez it is a problematic element: “It is an autonomous expense that is not sustainable in the long term. For many reasons. “The fiscal deficit cannot continue to increase.”

Mauricio Salazar adds that the Petro Government has been very aggressive when it comes to expanding the state apparatus with “bureaucracy and new ministerial agencies. The State, which is within the category of administrative and personal services, participated with one percentage point more in employment in 2023 than in 2022 and in the aggregate it stands out as one of the factors that has explained the global unemployment numbers.” The increase in the level of salaries, for its part, has remained afloat and in parallel with the rise in inflation. “In most sectors there was no real drop in hourly wages, except for commerce and real estate activities,” specifies Luz Magdalena Salas.

When breaking down the data, it is also evident that young people are the most affected with the smallest increases: “This generates concern especially in the agricultural sector, where despite the fact that employed personnel increased by a total of 1.4%, 82% are men. , a historical gap that, in any case, shows that the jobs that are being created are going disproportionately to men.” Álvarez recalls, along the same lines, that “women are increasingly entering the labor market, but as is traditional for low-paying jobs.”

The academic adds that, while waiting for February data, the loss of well-paid jobs in mining, heavy industries or the agricultural sector usually triggers “low consumption, a pessimistic perception of investors and a decrease in average income.” of all Colombians.” And Luz Magdalena Salas concludes: “We are not just talking about the size of companies or the number of jobs created, but also about how protected workers are in terms of salary, hours, distance to get to work or social benefits.” .

Subscribe here to the EL PAÍS newsletter about Colombia and here to the channel on WhatsAppand receive all the information keys on current events in the country.

_