The growth of the economy in 2021 exceeded expectations, but this result of 10.6% in GDP has not managed to be reflected to the same extent in the labor market recovery. Although unemployment in 2021 stood at 13.7%, one of the findings provided by the National Administrative Department of Statistics (Dane) is that there is a gap of 8.1 percentage points between the rate of recovery of the economy, and the jobs.
(Read: The country’s challenges after consolidating an economic growth of 10.6%).
The Dane establishes a basis for comparison with the data that existed before the pandemic and for this a value of 100% is determined for the year 2019. However, as explained by the director of the entity, Juan Daniel Oviedo, “while the product evolution index stands at 102.8 in 2021, the employment index stands at 94.6%, the gap compared to 2019 between the product and employment is 8.1 percentage points”, he explained.
Hence, several experts have drawn attention to this lag “We could not expect the labor market to recover on autopilot with GDP growth, because there were changes in the labor market with the pandemic, such as companies that were closed, new ones that were created, some learned to produce with fewer people, and it changed the balance of the labor market”, indicated Roberto Angulo, founding partner of Inclusion SAS.
According to Angulo, “there is a need for a public policy agenda, for productive and labor inclusion that makes the labor market stick to the growth rate. We are capable of growing with another balance, but it will depend on the public policies that complement it”. Angulo pointed out that among them the youth labor market matchingand care system actions to take burdens off women and for those who fell into inactivity to return to work.
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On the other hand, Beethoven Herrera, professor emeritus at the U. Nacional and U. Externado, assured that although the GDP has improved, especially due to the dynamics of the commercial sector, a good part of this reactivation, as in the case of the days without VAT “has gone to the consumption of imported goods, which generate employment, but not local industry.” Herrera also highlighted that virtual commerce, which has also gained strength in the last two years, does not generate jobs, but consumption.
“The other thing is that the companies had to face the closures, if the economy reopens, the production stocks are sold, but the people are not necessarily reintegrated. That is why GDP grows, but not employment”, assured Herrera, who said that there may also be a significant number of jobs that may have been recovered informally.
(Keep reading: ‘GDP figure is satisfactory for real estate activities’).
Likewise, Stefano Farné, director of the Externado University Labor Market Observatory, assured that “this is something that is not post-pandemic, but now it is more evident. Since April 2019 we see that employment is falling, but the economy is growing. We see that it is a labor market problem.”
Farné assured that as a result of the pandemic many jobs had to be virtualized, and people have been replaced by machinery or digital processes. And in addition, there are people who are withdrawing from the labor market. For several years the inactive have been growing.
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