He reform project to the Colombian labor systempresented by the National Governmentcontinues with its adventure in the Congress of the Republic, however, questions about its content continue to be the target of strong criticism.
And it is that different sectors, especially from the private enterpriseit is ensured that this social project of the Government can endanger the creation of new jobs, as well as the job stability of millions of people. Likewise, it is ensured that this would not help to sustainably reduce informality.a form of employment in which the majority of Colombians manage to survive (rate of 55.9%, according to the latest Dane labor market report).
(You can read: How much is a day and an hour of work worth in Colombia?).
In fact, this was also deepened by David Perez-Reyna and María del Mar Rojas, andxexperts from the Faculty of Economics of the Universidad de los Andeswho assure that this project “does not address these causes and, consequently, can have a harmful effect on the economy“, adding that so that “more Colombians can have a formal job, a reform that allows an increase in the productivity of the country’s companies is better“.
Unemployment in Colombia
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They also mention that The average unemployment rate between 2000 and 2019 was 11.5%, above all large Latin American countries and the average for countries in North America, Europe and East Asia.
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Based on the study ‘Unemployment and informality in Colombia’, experts from the Universidad de los Andes assure that the point of the reform is to give employees greater bargaining power to set their salaries with companies in the formal sector. would cause available vacancies in the private sector to fall by 3.79%.
They explain that “By having less bargaining power with workers, companies tend to prioritize hiring the most productive workers, which allows them to have greater profits. (…) Some of these workers are forced to move to the informal sector, which increases the number of informal workers by 0.044%“.
A citizen income, a unemployment protection scheme and social security for the popular economy are sought.
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As a proposal, they mentioned that “If we seek to reduce unemployment and informality, a better solution could be related to an increase in productivity, either of companies or of individuals; that is, the ability to produce more with the same work“.
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And they added: “As in the market power experiment, we analyze the effects of a 1% increase in firm productivity. This change has a positive impact: overall consumption increases by 0.95%. In addition, there is a decrease in unemployment rates of 0.013 percentage points (reaching 9.78%) and informality rates of 0.22 percentage points (4.93%). When analyzing the effects of a 1% increase in worker productivity, the results are similar. Consumption increases 0.98%, the unemployment rate decreases 0.0246 percentage points and informality decreases by 0.0135“.
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