ILO: unemployment in Peru and informality far exceeds Latin American countries

Levels of participation and occupational occupation in countries of Latin America They are still lower than those registered in 2012, a sample of stagnation and insufficient creation of employment In the region, the International Labor Organization (ILO) revealed in its recent labor report 2024 of Latin America and the Caribbean.

“The panorama is still worrying: we are at the same point as 10 years ago. He economic growth slowly and structural deficiencies in the generation of employment persist, ”said Ana Virginia Moreira, regional director of the ILO.

For the Peruvian case, with figures to the third quarter of 2024, the unemployment rate – understood as those who have no job, but are actively looking for it -, records 5.3%; that is, an increase of 0.2 percentage points compared to the same period of the previous year (5.1%).

This rise can be greatly explained by the reduction of the labor participation rate (Percentage of the active population that is looking for or maintaining a job), which went from 69.9% to 69.5% in the third quarter of 2024. That is, a lower workforce in active search.

Another factor is the highest reduction in the rate of occupation (number of people who have employment), which fell from 66.3% to 65.8% for the same period.

In an interview with La República, Gerson Martínez, regional specialist in Labor Economics, Regional Office of the ILOHe argued that to improve labor market indices, a gross internal product is necessary.

“In 12 years, economic growth averages have been modest. An indispensable condition is to have sustained economic growth at rates that allow generating new formal jobs, ”he said.

The weight of informality

Informality remains one of the greatest taras for the Peruvian labor market. While the regional average reaches 47.6% (a light contraction), 72% of workers suffer from Peru, a rate fired in the region.

“The high incidence of informality of a 72% rate is not a minor issue. I would dare to say that, if we had to make a top three of priorities in terms of challenges in the labor market, informality should be there, ”he observed.

Thus, according to the ILO report, to the second quarter of 2024, Uruguay It has an informality rate of 21.5%; Chili 26.9%; It follows Brazil with 36.6%; Costa Rica37.1%; Argentina46%; Mexico, 52.5%; Colombia 54.7%, Dominican Republic55.8%; Ecuador68, .2% and the Peru with 72%.

In its reading, this scourge “not only brings precarious conditions for seven out of ten people workers in Peru, but also seriously impacts the health of public finances and the sustainability of social security. ”

“There are many people working, but few contributing to social security systems as well as tax systems,” he said.

According to Labor Minister Daniel Maurate, there are 12 million 400,000 workers mired in informality, in contrast to the 4 million 400,000 formal, in a form and with social benefits.

In that context, one of the characteristics of informality is that people in that condition have very low income.

Only in Lima, people in the underemployment Invisible, that is, those who live with income below the S/892, reached 1 million 718,500 at the end of 2024. “That is, 612,000 more than in 2019 (+8.4 percentage points) and 5,600 more than in 2023” , in the reading of the laborist Fernando Cuadros.

According to economist Diego Macera, the real income growth Of the Peruvians between 2004 and 2014 it was +35%, but in the last decade (from 2014 to 2023) it fell -7.3%.

On your way to your adhesion process to OECDPeru faces a key requirement such as the reduction of informality. The ILO specialist argues that Costa Rica was in a similar situation.

“In those years that was in the adhesion process, it began to formulate and adopted a national tripartite transit strategy to the economy formal. That was a sign of institutional change and there was political will to attack this phenomenon, ”he said.

However, this is not enough. Objectives are needed in the medium term and an employer sector and unions such as key actors in the articulation of solutions through social dialogue, he concluded.