President Gustavo Petro, both when he was in the campaign and since he came to power, he has recognized it as key for the country to the popular economy.
However, according to Antonio Osorio, the president of the National Confederation of Microentrepreneurs and Popular Economy (Conamic), the entity in charge of observing the behavior of the popular economy in Colombia, the sector has had to overcome the effects of the economic slowdown and the decreasing, but still high inflation, taking into account that more than 7,600,000 people subsist in what The union leader considers the intermediate sector between labor informality and full formality.
(Further: After two years of ups and downs in Colombia, the number of microbusinesses fell again).
In dialogue with Portafolio, Osorio spoke about the challenges for microbusinesses in the popular economy, in addition to what the labor reform project may mean for this sector in terms of employability and business growth.
How is the popular economy going so far this year?
The popular economy has done very poorly, since facing all the economic issues that formality requires is very difficult. Furthermore, when the economy slows down, people stop consuming many things in the popular economy, such as a coffee, an empanada, or a cigarette.
The sector has also been affected by an economy that is not working and we feel weak.
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popular economy
Alexis Múnera
How has employment been formalized in the popular economy?
The issue of labor formalization in the popular economy is very complicated. Before the pandemic, there were 5,446,000 businesses and those businesses generated 7,600,000 jobs. There are microbusinesses that have from one to five workers, more or less, but for formal employment, as defined, only between 9% and 10% would meet these requirements. Thus, we can say that there are 6,000,000 informal workers in the popular economy sector.
For example, for a business that sells empanadas to have two formal workers, it would have to hire them with a minimum salary of $1,132,000 plus their benefits, and that would be 58% more expensive than paying them daily, so it doesn’t work for us.
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What are daily contracts like in the popular economy?
Workers will always be hired for the day in this sector. How long is the day? Between 20,000 and 30,000 pesos depending on the business. Depending on the level of sales that that business has, a greater or lesser daily value of payment will also be sent to the employee, without taking into account whether the benefits are in that value, because it is assumed that they are not having any type of benefits.
In these cases, the competition is the State itself, because these workers are generally affiliated with Sisbén and have many benefits, so leaving that would generate more economic concern for them.
A job that employees of the popular economy have is like an additional income to support themselves, because they support themselves with everything that the State gives them in subsidies. For those who do not receive subsidies, their earned income is the minimum they live on per day.
The popular economy has been one of the main flags of the Government. Have you really seen progress or opportunities for improvement?
The only thing that the Petro government has done is see that there is an intermediate sector of the economy between formality and informality, which is the popular economy. Let’s say that this is the reality and what they have done is highlight these 5,400,000 businesses.
The impact of a program carried out by iNNpulsa or carried out by Colombia Productiva would be felt in a group of 500 microenterprises in a universe of 5,000,000, and that would be minimal.
Informality must be seen as a big problem and must be supported with cooperatives and associations to carry out mass programs that reach companies and can change roles, from informality to formality, generating greater income for businesses and workers.
As long as micro companies do not go from selling daily goods to a higher level, it will not be possible for formality to reach these sectors.
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Has there been work with the private sector, especially with large or medium-sized companies, to enhance formality, benefits and working conditions?
Large and medium-sized companies, in their contracting processes, require data on benefits and formality from their suppliers. Therefore, it is very difficult for a company that is in the popular economy to establish a direct link with a large company because it does not have this information.
As for what large companies do, we can talk about the programs they have on social development issues with their foundations, where they do work for cooperatives and very specific associations, the same as the Government. They make programs that are more oriented to the line where the company develops.
What problems do microbusinesses in the popular economy have?
One of the problems that the popular economy has is that it is very local. One will never think about how an empanada stand is going to sell its products for another department; or even in another neighborhood, then to that extent the issue of economic development in these entities will never grow and they will always do the same: then, it will never grow and it will never disappear.
Rather, we are the economic basis of the development of a country, where the work done in the popular economy is the basis for creating new micro and small companies that in the future will be suppliers of services and products to large and medium-sized companies. companies.
It would be an interesting job and the Government and private companies have to be articulated in programs that have a greater impact.
Antonio Osorio, president of the National Confederation of Microentrepreneurs and Popular Economy
Courtesy
What could be the effects of the labor reform on the popular economy?
An empanadas stand with two workers who earn a minimum wage, before the reform, has an additional extra cost that is the minimum wage and 58% more that is to pay the employee for vacations with everything required by law.
This labor reform is not to promote formalization, but to promote existing jobs. So since you’re not promoting new development, all you’re doing is consolidating existing jobs. The only thing that is generating is a larger gap between formality and informality, generating an increase in informality.
JUAN MARTÍN MURILLO HERRERA
Portfolio Journalist
