Points to work on to improve the employment situation in Colombia

The academic Dario Maldonado He says that it is necessary to look at how the policy of the labor system is constructed.

(Read also: ‘Labor market in the country works badly’: objections from the employment mission).

What would be the central work axis to improve the labor situation in the country?

The mission’s message is that the labor problem in Colombia requires a complete review of the fundamental principles that should be behind the design of the policy. The problem is not solved with one-off adjustments. We have not paid enough attention to a basic principle of how to do public policy, align the uses and sources of financing, the main message is coherence in public policy. Second, policies to support the needs of workers – protection against dismissal and training – need to be reviewed to ensure that everyone is covered, including those in the informal sector.

How would the health and pension systems be more efficient?

For health, the proposal is to continue a path that Colombia already began many years ago, to ensure that everyone has care and that is financed with general taxes. For pensions we have to continue with the pension system and care for the elderly, so that there is also a pension scheme through which some resources arrive for the sustenance of the elderly population, financed with general resources, and that everyone can receive, regardless of whether they worked or not. Protection of the unemployed or of occupational risks must be financed with contributory and associated resources to payroll.

(What’s more: Diagnosis of the Colombian labor market).

Does that imply a labor reform or from what court?

We did not do the detailed review of where they should be. We deliver the Mission so that the government, which is already working on that. But this does imply a series of reforms, it is not sitting down to look at a new law or decree but rather how this entire legal environment is built and reviewing it in detail, and it is a long road that will require time and successive reforms.

Would it be the task of the next government?

It is something that has to do with many governments. Part of the task that the Mission did was a historical review of all the reforms, and it shows that it is not the problem of a single government, but something common, and both previous governments and this one have moved in that direction, and hopefully the next one also pushed it much harder.

(Read: Authorize to require vaccination to employees of some sectors of the country).

The Economist Santiago Levy He stressed that profound changes are needed in the labor system, but not as isolated reforms. It says that half of the workers are excluded from social security.

How easy would it be to implement changes?

Colombia’s labor market problems are very deep and have structural roots. An individual action will solve the problem. You have to do a rethinking the entire social security structure, in terms of pensions, health, unemployment insurance and compensation funds. It is an ambitious agenda, so it can be approached from different starting points, but there has to be a global vision. Isolated reforms have been made, but you never see if all the pieces as a whole have coherence or not.

(Keep reading: The failures of the Government’s employment mission, according to experts).

Santiago Levy, leader of the Employment Mission.

Mission Employment.

The Mission says that the minimum in Colombia is high, how much does this affect formal hiring?

It is one of the reasons, although not the only one, that makes it very difficult to formally hire workers, because a company must pay at least a minimum wage, plus additional costs for social security. If the minimum is high, the company must be productive to pay a high salary. In Colombia, most companies do not have that level of productivity, so what they do is hire informally.

In Colombia around 50% of the distribution of workers is below the minimum, while in Chile it is only 15% and in Mexico 22%. It would be desirable for workers’ incomes to be higher, but this way we leave out half of the workers, and that half is the one with the lowest incomes.

What is the role of the business community in this transformation?

Businesses are a very important part of the entire system and can play a very relevant role by participating in a dialogue with legislators and the Government. It is a problem that the government alone, or the unions alone or the congress is not going to fix, it requires everyone to contribute, participating in dialogue and legal reforms.

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