Which city offers more job opportunities in formal jobs, Quito or Guayaquil?

Quito and Guayaquil are the two development poles of Ecuador. They have similar populations and, together, the cities that are part of their urban conglomerate account for 38.4% of the national population, according to the latest 2022 census.

However, their geographical and political differences outline the economic development that corresponds to the dynamics of the success of their companies and operations.

in companies of the so-called urban conglomerate Quita (which includes, apart from the metropolitan district of Quito, the cantons of Mejía, Rumiñahui, Cayambe and Pedro Moncayo) work an average of 950,370 people every month with formal jobs registered with the Ecuadorian Social Security Institute (IESS).

These are the average salaries of formally employed people in each of Ecuador’s 221 cantons

This group has an average monthly salary of $941.83 (sixth place on the list of 221 cantons with the highest salaries in the country) and a rate of 313 people employed every month in a formal job per thousand inhabitants.

Their salary level is imposed by labor legislation that sets minimum wages for public servants above those prevailing in the private sector.

Furthermore, being the national capital, it concentrates a large number of employees in the public administration, defense and social security sectors, the third most important in terms of formal positions it creates, surpassed only by trade and manufacturing industry.

However, there are no positive results as the average number of employees per month fell from 1,015,122 people in 2019 to 950,370 in 2022, a decrease of 6.4%.

The companies based in the Guayaquil conglomerate (which also includes Durán, Samborondón, Daule, Nobolo and Yaguachi) On average, they employ 754,704 people per month. That is, out of every hundred formal jobs in the two main cities of the country, 56 work in Quito and 44 in Guayaquil.

Therefore, it has a lower rate of 218 employees every month in formal jobs per thousand inhabitants.

The average monthly salary of people employed in companies in Guayaquil is $778.83, which ranks it 34th in the list of 221 cantons.

Its coastal situation and proximity to the country’s main exports after oil (shrimp and bananas) mean that the agriculture, livestock, forestry and fishing sectors are the third most formal job-creating sectors and, unlike Quito, the public administration, defense and social security sectors are declining in ninth place.

A slight increase of almost 1% was recorded from 2019 to 2022 in the average number of people employed in formal work.

In which cantons of Ecuador are the best salaries and in which jobs?

In both geographic areas, a total of 1,705,074 people are formally employed, 61% of those who have a formal job registered in the IESS in Ecuador.

During the 20th century, Guayaquil and its area of ​​influence established itself as the sector that generated the most foreign exchange for the national economy. In fact, it was said to be the economic capital of the country and to be the headquarters of the major banks, but this changed after the economic crisis of 1999 and the bankruptcy of financial institutions on the coast at that time.

Of the 19 sectors into which formal jobs are classified, Guayaquil surpasses Quito in four, namely manufacturing, agriculture, animal husbandry, forestry and fishing, and two related to basic services: electricity supply and water distribution, sewage, sanitation and waste, which corresponds to the fact that they serve a larger population than that registered in the national capital.

“The vast majority of the public sector is in Quito and although it has historically been said that Guayaquil is the economic capital of the country because large industries are located here, we have to think that production also grew in the political capital and its surroundings,” says economic analyst Sebastián Cárdenas.

Quito is the hub of vehicle assembly and concentrates metallurgy, he adds. The construction sector is also stronger, employing 40,279 people per month compared to 30,573 in Guayaquil. The same is happening in the commercial sector with 12,638 more people working each month in that area than in the Main Port.

So far in the 21st century, there is a business boom in the national capital, supported by the weight achieved by the public sector during Correismo (2007-2017), indicates economic analyst and professor at the University of Espíritu Santo Paola Ycaza.

“In 2014, public consumption represented 45% of the gross domestic product (the sum of all final goods and services produced by the state or the economy), we are sure that we will reach a record at the regional level, that is a very high percentage, that was the peak during correismo, and then it decreased. This was due to an increase in salaries in the public sector and an increase in bureaucracy. “I know many people who went to live in Quito at that time and stayed there,” he says.

Public sector investments were higher than 12% of GDP in each of the years 2012, 2013 and 2014, while in neighboring countries such as Peru, Colombia and Chile they were 5%.

Another factor reducing Guayaquil’s dynamism is that informality is more entrenched in the main port, Cárdenas says. “There are certainly many more employees in the store, for example, whose contracts are not registered. An idiosyncrasy of business constitutions is informal contracting.”

Which activities offer the most jobs each month in Quito and Guayaquil?

The processing and canning of fish, crustaceans and molluscs, the cultivation of tropical fruits and marine aquaculture are the activities that generate the most formal jobs in Guayaquil.

In fourth place are private security companies, whose number of formally employed people increased from 22,032 in 2019 to 24,651 in 2022, which is an increase of 11.9%. This rebound is partly a response to insecurity, which requires more guards.

The rest of the activity is focused on the sale of food products and household items, hospital care, education and restaurants.

Building construction creates jobs for 15,521 people every month, making it the twelfth most job-demanding activity in Guayaquil. And public administration in general appears in thirteenth place.

The three main activities in Quito are the cultivation of other annual plants (roses), private protection tasks and public administration tasks in general.

Sales of restaurants, hospital care, classes, and food and household supplies continue.

Of the first three, the only ones in which the average number of employees increased from 2019 to 2022 were crops of other annual plants (14.4%), retail trade with a predominance of food, beverages and tobacco (5, 9). %), other types of financial intermediation (3.1%) and activities of doctors and dentists (8.6%).

The activity of monetary intermediation goes hand in hand with the fact that the capital of the country is the headquarters of the main banks and financial institutions.

The construction of buildings requires more staff in Quito with 17,945 people employed every month, as well as the regulation of health, educational, cultural organizations and technical advisory activities, the last two related to the dynamics created by the concentrated public sector. in the national capital.

New contracts for people over 50 would only be for the time needed to retire: This is what was established by the Lasso ministerial agreement suspended by Daniel Noboa’s government

“Construction is more dynamic in Quito, I see that there are many real estate projects in residential areas,” Ycaza points out.

Internal competition between the two cities is positive in the sense that it stimulates the economy and creates more employment opportunities. There would be a greater incentive, says Ycaza, if there was greater ease for companies and individuals to hire formally.

“At some point during the government of Guillermo Lasso, the possibility arose that there would be two regimes and that every new employee hired by the employer would start with a new, slightly more flexible work regime. The old ones could choose whether to stay with the old Labor Law (which dates back to 1938) or the new one, which would be less rigid,” says Ycaza.

What is desirable in the economy is that you have more people employed in the formal sector. “Instead of there being two jobs for every employer, the employer says that he would rather have two or three employees than one and a half because of the inflexibility and difficulty of firing people,” he adds.

The idea is that you can hire by the hour on certain days, for example when there is a higher demand in restaurants, for example, points out Ycaza: “Make it easier to hire students, people who are just starting out, it all gets complicated and by not hiring you become overused. staff who are hired.”