Due to labor reform, 55% of transport companies would cut payroll

The labor reform has been in the eye of the hurricane since its filing in Congress of the Republic a month ago, for which businessmen from all sectors have taken out their calculators and calculate their possible impact.

(See: Why calculating the fiscal cost of reforms is a ‘tough nut to crack’):

The idea is how to survive its effects in the event of a possible structural change in payroll, all this in a macroeconomic panorama weakened by inflation, high interest rates and the devaluation of the peso.

In the case of cargo carriers, Colfecar, one of the organizations that unites them, carried out a study on the effects of this reform and among the conclusions they found that the pessimism of companies increased with this reform from 7% to 72% between 2022 and 2023.

On the question of what the financial situation of their company will be like at the end of this year compared to the previous year, 20% of the companies answered that it was much worse, while in 2022 (when they made another report on the subject) nobody answered in this category.

In addition, 58% of the companies assured that it will be worse than a year ago, a figure that was barely 7% in 2022. It should be noted that no company will expect to close the year much better than a year ago, while in 2022, 15% expected it.

(See: What the labor reform changes for firms and workers).

Faced with a pessimistic outlook, companies are planning structural changes in the composition of their staff for this year, a big change from their prospects in 2022.

For example, in the previous year only 11% of the companies would reduce their staff, 56% would keep them the same and 33% would increase it; this year, close to 55% of companies plan to reduce their payroll and the rest (45%) will keep it the same.

For 2024, Colfecar asked its affiliates, in the hypothetical case that the reform is approved by Congress, what the economic situation of their company will be, to which 36% of the companies responded. parcel and courier services that will be much worse and 55% worse.

In the case of bulk cargo companies the relationship is 19% and 58% respectively. In addition, in the case of payroll, 36% of the former will reduce their staff and 56% of the latter will also do so.

“In sectors such as transportation and logistics, a large part of the work is carried out after 6:00 p.m., for this reason, labor costs would increase”, acknowledges the union in the report.

(See: OECD countries support pension and labor reforms, says the Government).

Among the factors that will influence this impact, they point out the automatic reduction of the working day from 48 to 42 hours, “without allowing companies to have room for maneuver and an orderly transition to be able to schedule their operations”.

In addition, the increase in Sunday and holiday surcharges, the extension of the night surcharge and the increase for workers who earn less than two Minimum Wages, according to the CPI, would affect this.

This increase would represent, according to Colfecar, a significant weight in expenses, due to the fact that the weight of the payroll in the majority of the parcel transport companies and Messaging weighs between 51% and 75% in its cost structure.

They also point out that according to Fenalco, what is suggested in the labor reform would increase labor costs by 30% compared to 2022 and the sectors most affected would be commerce and companies dedicated to transport services, hotels, bars and restaurants.

(See: Labor reform would also impact amusement parks).

In estimates of Colfecar, This would mean for their companies that cost overruns rise to 25% for 45% of businessmen, up to 50% for 36% of businessmen, and up to 100% for 19% of businessmen.

PAULA GALEANO BALAGUERA
Journalist Portfolio
Twitter: @Paula1GB