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November 5, 2024
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Stagnation in formalization and low salaries affect the quality of employment

Stagnation in formalization and low salaries affect the quality of employment

The economic development that Colombia has experienced in recent years and the advances in productivity have been two fundamental factors so that workers in the country have better conditions when carrying out their functions. Proof of this is seen on fronts such as remote work, which is gaining ground as time goes by, or the fact that more and more companies are betting on issues such as emotional salary.

Although the fight against informality, gender gaps or youth employment are fronts in which there are still pending tasks, recent data show that the country has achieved significant improvements in terms of the creation of quality employment. However, it seems to be entering a scenario of stagnation that would put its competitiveness compared to other markets at risk.

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Luz Magdalena Salas, vice president of Anif, assured that To better understand the situation of Colombian workers, this phenomenon must be approached from two perspectives, starting with their contractual relationships. Salas highlights that in recent years fixed-term and indefinite contracts have increased, which implies that more and more people have formal employment.

“The second index measures workers’ perception of their jobs. In this case, it is observed that the workers are satisfied with their work day and have managed to improve the balance between work and their personal life. This can be explained because after the pandemic many jobs adjusted their schedules and adopted more flexible ways of working,” Salas said.

Informality.

EL TIEMPO Archive

Current risks

Although at first glance it seems that everything is fine, from the Center of Anif Economic Studies argue that, despite indefinite-term contracts and additional benefits, stagnant hourly wages and long transportation distances continue to affect the quality of work in Colombia.

“One of the most important variables is formality, as it is associated with better conditions and protections for the worker. Thus, the positive trend that is seen shows that levels of formality in the country have improved, contributing positively to the quality of employment,” says a report from the entity.

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Having said the above, they note that these factors, added to the inequality in working conditions for women and young people, indicate that the labor market It still fails to offer vacancies with optimal conditions for the country’s workers.

To better understand what is happening with job creation in Colombia, these experts propose six elements that affect both the perception and the competitiveness of the local labor market compared to its peers in Latin America. These elements include workforce training and employment characteristics.

Stagnation and gaps

As mentioned before, one of the factors that are holding back The improvements in this issue is the stagnation of formalization, since, according to Anif, “so far in 2024 there is a slight stabilization, which may indicate a stagnation in the creation of formal positions. For their part, the type of contract and extra benefits register a similar relationship in the last months of available information.”

Informality

Informality,

Simply put, at this time companies in Colombia are seeing their ability to offer formal employment and generate extra benefits for employees reduced, beyond the salary allocations established by national legislation.

“Likewise, written employment contracts have vacations and layoffs as a legal requirement, which in turn explains the growing trend in workers’ extra benefits, which includes these two items and additional bonuses. However, although That relationship has grown since 2021, it has registered a decline in recent times,” they stated.

Secondly, Anif argues that low salary increases, long travel times between home and work, and the lack of training of human capital limit access to better-paid jobs with greater benefits, which makes the country is unattractive in the matter.

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“The most important drop is observed in travel time, which indicates that Colombian workers spend more and more time on transportation to their workplace. Regarding the hourly wage, although a small recovery has been observed so far this year, when viewing the complete series a stagnation of the variable is observed, which shows that, at the national level, it has not been possible to improve the income of workers. workers compared to that year,” Anif explained.

Women and youth

Two other fronts that are working against the generation of quality employment in Colombia are the gender gaps, which continue to affect women mainly, and the unequal conditions for young people and the elderly, which in many cases end up increasing. the ranks of informality.

Informality

Informality.

Esneyder Gutiérrez / EL TIEMPO Archive

In this sense, when analyzing the quality of employment between men and womenAnif reported a gap in the evolution of both indices during the years analyzed. The average target index for men is 102.1, while for women it is 100.4, which reflects a gap of 1.7 percentage points and shows stagnation in women’s working conditions.

“The country seems to have made progress in terms of labor formality and contractual stability. However, there are still important challenges in the quality of employment. The conurbation processes in large cities and their metropolitan areas could be affecting the travel times of the workforce,” they stated.

Anif closed by warning that older Colombian workers face greater difficulties in finding jobs with good remuneration, compatibility between personal and work life, and contractual stability compared to young people. In this sense, they highlighted that it is a sector of the economy that is being wasted and that could be used better, given the aging of the Colombian population.

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