Although the labor market in Colombia is withstanding the blows of the slowdown and is currently at better levels than those projected at the beginning of the year, this is a front of the economy that is no stranger to the slowdown and has resisted so much, is already beginning to show signs of weakness that in the future could trigger a higher unemployment rate in specific sectors of the population.
The data observed between June and August, where women and young people were the hardest hit by unemployment, are proof that the slow growth of the Gross Domestic Product is leading to companies, large and small, not generating all the employment they is being sued and Because of this, some indicators such as labor informality remain strong.
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Confusing results
A recent report by Bancolombia Investigations maintains that during August the labor market had a mixed dynamic, with a slight pessimistic bias, in which although the country remains below 10%, when reviewing the seasonally adjusted data a different panorama is seen and with clear deterioration.
“The unemployment rate remained stable nationally, while It rose at the urban level, when compared to July. In the first case, there was a proportional strengthening of both the level of employment and labor participation, while in the cities the increase in the General Participation Rate was greater,” they began counting.
Unemployment in Colombia
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That said, a first conclusion for them is that employment remained resilient, to the extent that the capacity of the productive sector to generate employment managed to absorb, to a large extent, the greater labor participation and avoid a more significant deterioration in the employment rate. unemployment.
“At the national level, the unemployment rate (SA series) remained the same as in July, at a level of 10.0%. This data continues to be the lowest unemployment rate since September of last year and confirms a relative resilience that contrasts with the recent GDP growth that, although it has recovered, is still below potential,” they noted.
That said, they warn that in general terms, the reading of this result is negative, to the extent that it shows a reduction in employment that would be a consequence of the need to cut spending that the National Government should advance in the second half of the year. and could give signs of lower growth in this macrosector in the very short term.
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In simpler words, these experts maintain that unemployment was located at these levels, since the number of people who went out to look for work in August was not as high as expected and was on par with the job offer presented by the productive sector. However, it makes it clear that these jobs were largely generated by the State, which will not be possible in the future.
Finally, they make it clear that “the entertainment sector was once again the protagonist of the good dynamics in the total number of employees. This activity was the one that generated the majority of new jobs compared to August 2023, such that it was the leader in increasing the number of employees, along with the sectors of commerce, accommodation and food, agriculture, logistics and public services. that managed to counteract the drop in employment in construction, public sector, health and education, and real estate.”
Urgent reactivation
Another point of view on these results was that of José Manuel Restrepo, rector of the EIA University and former Minister of Finance, who indicated that what is happening in terms of employment in Colombia is what had to be expected, given the modest growth that the economy has shown and that there is still no reactivation plan.
Unemployment
Abel Cardenas. EL TIEMPO Archive
“It is a bad employment outcome. As expected, when a country grows little, it generates uncertainty in its policy with the productive sector, and suffers from insecurity, sooner rather than later employment is affected and with it the income of families,” he explained.
Based on this, he insisted that “the concrete reactivation plan is urgent, which, as promised several weeks ago, should have been delivered to the country more than a week ago,” while at the same time he launched barbs at the National Government, asking “ “How much longer do we have to wait for something really effective to be done at this time” and insisted that if you play with employment, other indicators such as poverty are put at risk.
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Positively, the unemployment gap with women is reducing (female employment is being created), but that of young people is increasing and the increase in unemployment in the Caribbean and Chocó region is worrying. Good for Medellín and Bucaramanga where local growth bets are giving employment results,” said Restrepo Abondano.
The former Minister of Finance went much further and described it as “very worrying.” that from June 2023 to today, the seasonally adjusted unemployment rate grew from 8.8% to 10.2%” and relied on this data to say that “employment figures are deteriorating month by month. Seeing these data, a bad idea is to promote the labor reform that is being discussed in Congress and that has been reported to generate less formal employment and less productivity.”
Unemployment in Colombia.
Private file
Beyond the dynamics that are observed month after month, it is worth highlighting that one point on which economists and analysis centers agree is that the unemployment rate will remain in double digits until 2026, in the best of cases. , since the economic dynamics will only improve until the second half of next year and this always takes time to translate into job creation.
Meanwhile, unions and various social and political sectors insist that it is necessary to launch a reactivation plan as soon as possible, which the Government said would be ready two weeks ago, but which apparently It would not be fully announced until mid-October, so we will have to be more patient.
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