Unemployment drops but most new jobs are informal

In the last six months, more than 100,000 jobs have been added to the economy, which means a recovery in the labor field, where the unemployment rate went from 11.3% in October 2021 to 9.9% in April 2022.

Jobs were lost in agriculture, in the information and communication sector, administrative activities, and in the health segment.

There were higher levels of expansion in construction, with 14,222 (13% increase); industry, with another 14,004 (13%), and service activities, with 13,054 (12%) additional positions.

Transportation and logistics gained 12,915 or 12%; commerce recorded some 11,616 (10%) positions, and the Government had an upward variation of 11,294 (10%).

However, most of the new jobs are in the informal sector. When self-employed workers and employers are counted in construction, 98% of labor expansion is categorized as informal employment.

The same happens in the industry, where of the 14,000 new jobs, 10,084 were self-employed, and 3,648 new employers. In domestic service, which achieved 4,428 new jobs, 100% informality is observed.

Informal workers are considered to be employees of a private company without a work contract, independent workers, employers whose companies have less than five employees, people who provide domestic services, and family workers. In summary, the country has added 60 thousand additional workers to the informal sector in less than a year.

In October 2021 there were 677,875 informal jobs, while for April 2022 the figure stood at 737,922. This implies that informality is monopolizing 48.2% of the non-agricultural employed population of the country.

Of the total number of people with informal employment, 59.2% worked on their own account, 26.4% had a salaried job, 8.1% was a domestic service employee, 3.3% a family worker, and 3% an employer.

Most of the informal workers do not contribute to the Social Security Fund, which demonstrates part of the precariousness of their condition, as they are not making the contributions to the worker-employer quota that they need for the moment they retire.

In Latin America and the Caribbean, nearly 140 million workers work in the informal sector and have been strongly impacted by covid-19.

Guy Ryder , director of the International Labor Organization (ILO), warns that there can be no true recovery from the pandemic without a broad recovery in the labor market. “And, to be sustainable, the recovery must be based on the principles of decent work, including health and safety, equality, social protection, and social dialogue.”