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CADE Executives will analyze the employment situation, this is the panorama in the capital

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CADE Executives will analyze the employment situation
CADE Executives will analyze the employment situation

CADE Executives will analyze the employment situation: During the second day of this event (Wednesday, November 9) block will be addressed “Jobs at risk: Problems and challenges facing private investment in the current context to generate decent employment”, in which they will participate Oscar Caipo president of Confiep; Paola del Carpio Ponce coordinator of Research Network for Development Studies, and John Stoessel General Manager of Casa Andina Hotels, as well as Luis Villanueva president of the Association for Labor (APT) and general secretary of the Federation of Civil Construction Workers of Peru (FTCCP).

What is the employment situation to date? The latest report of INEI on Situation of the Labor Market in Metropolitan Lima shows that in the moving quarter July-August-September 2022 the population with adequate employment (those who receive labor income equal to or greater than the minimum wage and work equal to or more than 40 hours a week) totaled 2,919,700 peoplewhich represented an increase of 17.4% (433,400 people) compared to the same moving quarter of 2021 (2,169,000).

READ MORE: MEF sees very difficult to reform the pension system if informality is not reduced

Nevertheless, still fails to reach pre-pandemic levels -mobile quarter July-August-September 2019-, when the population with adequate employment it reached 3,177,000 people.

Regarding underemployment, it is observed that in the quarter of analysis about 2.06 million people from Lima are in this condition, which represents an increase of 17.9% compared to the same period in 2019, when there was 1,750,400 underemployed people from Lima.

Regarding salary, the INEI report details that in the quarter of analysis, the average monthly income from the work of the main activity in Metropolitan Lima stood at S/ 1,745.1which represented an increase of 8.5% (S/ 136.7) compared to the same moving quarter of 2021 (S/ 1,608.40).

In addition, the average income is already slightly above what was registered in pre-pandemic levels, when said indicator was located at S/ 1,743. It is worth mentioning that in the country since March of this year the minimum salary is located at S/ 1,025.

READ MORE: Burneo: if the economy does not grow at 5%, it will not be possible to incorporate young people into the labor market

Another point to consider when talking about the employment situation is the labor informality, where the workers are not on the company payroll, so they do not have labor benefits such as CTS, bonuses and vacations.

A) Yes, labor informality in Peru reached 76.8% of Peruvians in 2021-the highest in 11 years-, with which 9,446,300 Peruvians found themselves in this condition. In the urban area, labor informality is located at 71.4% and in the rural area, at 95.3%.

Informality would remain in 2022

Precisely, on labor informality, the former Minister of Labor, Jorge Gonzalez Izquierdo pointed to AsiaGlobalBank that could remain at that high rate (76.8%) by the end of 2022 or would report a slight increase.

And it is that, as he said, this is due to the fact that The Peruvian economy is experiencing slow and insufficient growth to generate enough adequately productive jobs.

According to INEI data,the peruvian economy grew 1.68% in august, the second lowest rate of the year after July (1.41%).

“Although adequate employment is recovering -because it has not yet returned to the pre-pandemic levels of 2019-, it will not achieve that recovery to significantly reduce labor informality by December of this year compared to December 2021”he pointed.

In this sense, he considered that in order to reduce informality the economy must grow at a rate equal to or greater than a rate of 5% per yearinsofar as it must be developed, either by initiative of the private sector or the public sector, education and training programs for the labor force -mainly for young people- so that they can enter formal positions.

Problems from the start

For his part, the former head of the Cabinet of Advisors of the Ministerial Labor Office, German Loraconsidered that in order to improve the employment situation, issue regulations that make hiring workers more attractive and reduce the complex system that currently exists today.

In dialogue with management detailed that the regulations that have been issued in recent years have overloaded the employment relationship, Therefore, a more dynamic relationship should be chosen, precisely what is not being targeted.

“Hiring processes are rigorous. There is complexity at the beginning of the employment relationship, to hire a worker, and there is much complexity in the employment relationship itself, in the fact that there are many benefits, many licenses, a lot of Sunafil, (standards of) health and safety in the worked. In addition, there is much difficulty in the exit of the workers, so in the entire labor circuit, entry-licence-exit, we have a complexity and that makes the employer companies not want to commit to an employment relationship”, held.

Under this scenario, Lora estimated that by 2023 an encouraging outlook regarding labor issues would not be observed.

Data

  • The Minister of Economy and Finance (MEF), Kurt Burneo, pointed out that if the Peruvian economy does not grow at a rate of 5% per year, it will not be possible to absorb the 300,000 young people who annually join the labor market.
  • The Government has considered creating a new 6-month subsidy to promote the hiring of young people between 18 and 29 years of age.
  • The Central Reserve Bank (BCR) estimates that the Peruvian economy will grow 3% this 2022, however, if the Quellaveco mining project is paralyzed – due to a dispute over the water license – said estimate would fall to 2.7%.

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