Although it has already completed part of the procedure required by law and everything was left in the hands of the Senate, the labor reform continues to give something to talk about, since although the Government and the unions defend it and assure that it is necessary to dignify the work of millions of Colombians, As the days go by, new alerts about its effects become known.
Recently the turn was for the Anif and Dapper Center for Economic Studieswho in two different reports maintain that said project is disconnected from the economic reality of the country and, if it becomes a reality, it will end up seriously impacting three sectors of the economy, of which one is in negative territory and the other two are showing signs recovery.
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Likewise, they put on the table that compensation costs would increase, on average, by 11.48% and learning contracts by 83.5% for companies and the number of employees who would have to have a contract would skyrocket. indefinite and with it the personnel expenses for companies.
Sectors in red
A first vision in these reports was that of Dapper, which focused on which are the lines of the economy on which most of the negative effects of the reform would fall, highlighting that they are commerce, industry and the accommodation sector, whether due to the change in work dynamics or the increase in surcharges.
Informality,
To say this they base themselves on the report “Which sector is the most affected?: Sectoral cost analysis of the labor reform”, which evaluates the implications of the proposed modifications to the Substantive Labor Code, including changes in term contracts. permanent and apprenticeship, severance pay and surcharges for Sunday work, in which it is clear that these activities depend largely on fixed-term contracts, Sunday shifts and face a high rate of dismissals.
José Linares, co-founder of Dapper, highlighted that the biggest challenge lies in the indirect effects on the labor market and the incentives that this proposal generates, making it clear that there is a tangible risk of discouraging formalization and negatively affecting productivity, particularly in sectors such as services and commerce.
“Although the Gustavo Petro government initiative seeks to strengthen labor stability, it could generate substantial increases in operating costs for companies. One of the most significant aspects of the reform is the modification of fixed-term contracts, with which approximately 650,000 workers would meet the conditions to transition to an indefinite contract under the new regulatory proposal, where the health, education, manufacturing sectors They are the ones that house the most eligible workers,” he highlighted.
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Another aspect that Linares highlighted as important and that should be looked at carefully is the Sunday surcharge, explaining that with the progressive increase it would go from 75% of daytime hours to 100%, doubling its value. Simply put, the cost of a Sunday work for 438,060 formal workers would increase by $35.17 billion. to $44,060 million in 2027, representing an increase of 25.17%.
“The introduction of the agricultural contract seeks to increase formality in a sector that is historically informal. Our study reveals that 7 out of every 10 workers in the agricultural sector meet the conditions to have an agricultural contract. This implementation is difficult, since 35% of workers in the sector report having more than one employer, so assigning employer-employee responsibility would be more complex,” he said.
Labor reform.
THE TIME
Disconnected reform
On the other hand, for Anif, the labor reform ignores that Colombia faces serious structural problems in its labor market, with an average unemployment rate of 11% between 2010-2023 and informality that affects 56% of workers. Although here it is worth remembering that according to the Ministry of Labor, the project does not seek to reduce informality or generate more employment in the country.
These analysts noted that, beyond the inequalities and figures of this scenario, it must be made clear that the poor functioning of the labor market disproportionately affects women and young people, who face greater barriers to accessing formal jobs.
“This is reflected in their unemployment levels. For example, between 2010 and 2023, the gender gap in unemployment was on average 3.6 percentage points and so far this year (January-September 2024) the gap has increased 1 point compared to that average. Meanwhile, the unemployment rate for men has been 8.4%, that of women has reached 13.2%, bringing the gap to 4.6 percentage points,” they noted.
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That said, they mentioned that the reform is intended to improve the working conditions of formal workers through greater benefits, but that it imposes additional costs and measures that do not address the major structural challenges of the labor market.
“The proposals, as they are in the bill today, They could even aggravate these problems. Although it is important to implement improvements in the quality of work for formal workers, we cannot ignore the large percentage of the population that would not be covered by these changes and that could even be harmed,” they stated.
Manufacturing production
Courtesy
For Anif, the most important thing at this moment is to ensure that a greater proportion of the population has access to formal employment, “a critical aspect that this reform does not adequately address” and he recommends paying attention to the alerts that have emerged, both from the unions , as well as from study centers and citizens in general.
For now, the expectation regarding what could happen with this project focuses on what will happen in the Senate next semester, since we have until the middle of the year to define whether it passes or not, with the background that a time and Currently, relations between the Legislative and the Executive are not going through their best moment.
