The drop fluctuates between 5% and 25% and it has not been possible to recover that drop. The country does not produce enough to provide opportunities for a growing population.
Despite the fact that 2021 closed with a economic growth of 4%, which is much higher than initially forecast, there is still a long way to go to recover the levels prior to the pandemic.
According to the Minister of Economy, Simón Cueva, between May and December of last year, 350,000 formal jobs and 77,500 affiliations to the Ecuadorian Social Security Institute (IESS).
However, the health crisis destroyed more than 700,000 suitable jobsso the improvement reaches 50% of what it was until 2019.
The latest ‘Labor Outlook’, published by the International Labor Organization (ILO), establishes that a total recovery, until reaching levels pre pandemicit will take until the end of 2024.
In other words, the economy bounced back in 2021, and is further from the bottom of the well, but still has a long way to go.
With a job, but with less income
As of December 31, 2021, 3.15 million Ecuadorians were registered with suitable employment. More than half of those workers lost between 5% and 25% of their income Due to the health crisis and So far they have not been able to recover them.
That is, although they remained in the formal sector of the economy, on average they earn $510; while his salary it reached more than $600 until 2019.
Rogelio Izurieta, 28, explained that the crisis hit their incomemore now with the now so criticized Income tax.
“Before the pandemic, I used to earn about $700, but now I get $500. Before long, I was out of $200 each month. A year is the equivalent of being taxed $2,400, or almost five salaries, for continuing to have a job,” she said.
Currently, most micro and small companies, and even a part of medium-sized companies, are still looking to stabilize and recover sales and production levels. Hiring more than in the worst time of the pandemic but with minors salariesand just to go up the crisis.
Informality does not let up
If you compare December 2019 to 2021, the number of informal Y underemployedwith income less than $400 per month increased from 4,593,676 to 5,283,982; that is, 690,000 more than before the pandemic.
This, according to the economist and researcher Yolanda Méndez, means that we have more and more workers who have low productivity and generate low levels of income.
“The wealth produced by the Ecuadorian economy, or GDP, grew 4% in the last year, but on the other hand, informal Y unemployed increased more than 15%. In addition, more and more young people are entering the labor market, ”she said.
The result is that the productive apparatus is half developed, and the GDP per capitawave wealth for Ecuadorian, it is less.
Ecuador, according to ILO projections, will be the fourth economy in Latin America with the largest drop in GDP per capita in 2022, compared to the level in 2019.
The Ecuadorian decline is -4.9%, only surpassed by -5.2% in Haiti, -7.2% in Cuba and -31.5% in Venezuela.
Without structural changes such as an effective labor and investment reform, the GDP per capita could close at $5,880.98. This means that the salary The average real that an economy like the Ecuadorian economy can support does not exceed $490.
Because, only 1% of Ecuadorian workers earn $2,000 a month or more. (JS)
