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The pandemic leaves 83% of workers in Ecuador unemployed or in precarious conditions

2020-08-26T21:52:35.037Z


The labor market of the South American country deteriorates due to the economic slowdown due to the lack of incentives from the State to the productive sector


An owner of a typical food establishment in Quito, Ecuador.José Jácome / EFE

The figures that measure the magnitude of the covid-19 pandemic in Ecuador not only speak of the more than 109,000 infected and more than 6,360 deaths in five months, but of one million unemployed and 5.3 million workers with working conditions precarious. The production stoppage that faced the country's economy for more than two months and that is still making slow progress with a half-baked recovery process that began at the end of May has resulted in a significant erosion of the labor market. 83% of the workforce is unemployed or precarious. According to official statistics, only 17% of the economically active population has a job that meets the minimum legal requirements.

In December of last year, Ecuador had 311,000 unemployed out of a total of eight million citizens of age and with a vocation to work. Adequate workers, thus categorized by the Ecuadorian Institute of Statistics and Censuses when the salary and working hours respect what is required by law, then exceeded 3.1 million. Half a year and a pandemic later, burnout is so evident that it is not clouded even by the difficulty of collecting statistics or the change in methodology.

From face-to-face surveys with 227 questions, to phone calls of only 81. Comparisons "should be taken as references," recommends the authority, which does not blur the jump to 13.3% in unemployment, which, for 13 years, has remained around 5% of the economically active population of Ecuador.

“The survey carried out by the INEC is underestimating the effect of the coronavirus on the popular strata because, unfortunately, it was only done by phone, which generates a bias against the poorest neighborhoods because working-class families spend more time outside from home and they are more difficult to survey and it is where there is less telephone penetration ”, explains Byron Villacís, former director of the Institute of Statistics and who worked there for five years. That is, according to Villacís, the real situation is worse than the one reflected in the figures because, in addition, they have left out the measurement of informality that, before the coronavirus, already affected almost half of the workers (46.7%, as of December 2019). "That bad result" does not reflect the real impact, concludes the analyst, because "when families lose their jobs or their working conditions deteriorate, they take refuge in informality and this leads to a deterioration in health coverage, social security , decent work and social protection in general ”.

This conclusion contrasts, however, with the figures published by the Ministry of Labor. According to the government portfolio, in the period of pandemic and economic stoppage, 507,000 jobs have been destroyed according to the termination certificates registered by employers, but, at the same time, 242,000 new employment contracts have been signed. Mainly, for agriculture, livestock, forestry and fishing activities (46,078), for commerce (31,817) or for manufacturing industries (25,113). As "saved jobs", Labor counts almost 43,000 current contracts in which companies have chosen to reduce the working day - and the salary proportionally - to the employee.

“If we look at the drop in sales, they were $ 3 billion in March, $ 7 billion in April, May 6 billion and June 4 billion ... It's almost, almost $ 20 billion less in sales during the pandemic. Obviously, that entails a reaction on the part of the companies and is due to the charges and the costs, ”sums up Caterina Costa, president of the Guayaquil Chamber of Industries and the Ecuadorian Business Committee at the national level. The businesswoman relates the job decline to a flow and liquidity problem that has caused the closure of companies. "We already had bad labor statistics and hence our insistence on making regulatory reforms since the oil boom," he recalls, citing that before the pandemic only four out of 10 people had a job with adequate conditions and "now there are only two out of 10 ".

The macroeconomic situation in Ecuador limited the government's ability to maneuver and deliver incentives to the productive sector, acknowledges Costa. A space was opened in the labor legislation so that companies could reduce the working hours for their employees and the option of signing temporary contracts in new businesses was even expanded, which was previously restricted only to specific sectors such as seasonal agricultural workers. "Everything that serves to sustain companies will help to regain employment," says Caterina Costa, aware, however, that "lost sales will not be restored in the short term", that the total economic reactivation " it will take a while ”and“ that it will be difficult for jobs to recover ”.

Source: elparis

All business articles on 2020-08-26

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