A first of May with a lot of work and little employment

This is a date that must certainly be remembered, as it is celebrated on International work day, Today is a good time to reflect on whether to celebrate or fight. Surely, many people are celebrating on this day, perhaps with all their rights, but many others are working, honoring this day; all this due to the current state of the economy and the employment situation of Bolivians, where informality and low quality employment dominate their current context.

Given this scenario, surely this year there will be more people working than celebrating, they cannot afford to waste your money, in a context where income is low and insecure and expenses tend to grow, which means a continuous loss of the purchasing power of your money; Despite the fact that the central government indicates that we have one of the lowest inflation rates in the world (-0.22% as of March 2023), the reality in markets and fairs is different. Who is going to buy at their landlady with the latest data from INE Consumer Price Index (CPI)?

It must be remembered that due to the pandemic in Latin America and the Caribbean, according to studies by the ILO and ECLAC, more than 49 million jobs have been lost; in Bolivia has estimated an approximate of more than 1 million jobs due to the same phenomenon. The unemployment rate in 2020 rose to close to 9% in the region and in our country it exceeded 11%. The International Labor Organization (ILO) also reported that by 2022 in Bolivia, 80% of people work informally. 87% of these people are women and, of this percentage, 4 out of 10 carry out their activities on their own.

According to the latest data from the INE, as of February 2023, in Bolivia has an Economically Active Population of 6,741,642 people, of which 3.44% are unemployed; Of this total PEA, 32% are in the urban area and 68% in the urban area of ​​the country, of the latter, 53% are men and 47% are women. In addition, in the urban area, the unemployment rate for men is 2.25% and for women it is 2.82%; Behind the previous figures there are many phenomena that can be explained, especially the inequality in working conditions by area, by gender, age, and others, which, although they were in the process of improving, were completely wiped out after the pandemic.

After learning that only 2 of every 10 workers are part of the formal economy, who actually benefits from this latest wage increase? A quick response, to very few. A few days ago, between the government and the COB, they reached an agreement to raise the basic salary by 3% and the national minimum wage by 5%; this despite the fact that the 2022 administration had an accumulated inflation of 3.12% and an economic growth of 4%, according to the central government. According to economic science, the nominal salary (salary) should only be raised in the same proportion as inflation to maintain its purchasing power, that is, in our case, 3.12% was enough; but let’s be realistic, our inflation is “deflated” by subsidies, the exchange rate and contraband, despite this, it is estimated that the purchasing power of families has fallen by close to 50% during the last year due to the continuous rise in the prices of the family basket, including “non-legal” products.

A curious fact, product of a brief study that we did, during 2010 to 2023, in these 14 years, only in 2010 the increase in the national minimum wage (5%) was below the accumulated inflation of the country (7.18% ), the rest of the administrations, including 2023, the increases were always higher; Another piece of information, from 2010 to 2023, the SMN grew by 247%, currently it is in the top 10 in Latin America.

So, it can be seen that this “labor measure” is more a function of politics than of the economy, despite the fact that we have a sustained fiscal deficit since 2014, where high current expenses are the daily bread; This year, more than Bs 47 billion has been budgeted for payment of wages and salaries, which will rise more given these latest increases, which do not include the additional expenses that they entail.

Should we only celebrate this day or fight for more rights and equality for workers? The fight for a better job is not yet over, and even less so that it, in the shortest possible time, becomes a job. A formal job, where they earn the minimum wage, have a contract, medical coverage, social security, job stability, gender equality, others, in short, a quality job. But apparently the only one that guarantees that, in a certain way, is the private sector, which once again was left aside in the negotiation, and which will now find it more difficult to continue maintaining or generating formal and quality jobs for the country workers.

* Luis Fernando Romero Torrejón is president of the Departmental College of Economists of Tarija