2021 Summary: Unemployment ‘Peaks’ Near One Million; but 300,000 are reactivated

The highest number of job losses is recorded in 2021, reaching almost one million in April, according to data from the Ministry of Labor.

With thirteen months of pandemic there are 811,887 settlement certificates. Of these, 484,397 are due to agreements between the parties, 84,229 due to the conclusion of the work period, 71,333 due to the termination of the probationary period and 64,154 minutes due to the untimely dismissal.

Other causes record less than 30,000 settlement records, such as force majeure or unforeseeable circumstances and eviction.

Meanwhile, that same month a slight recovery in employment, with 416,992 new contracts. Its distribution: 87,205 from the agricultural, livestock and fishing sector; 71,432 from wholesale and retail trade; 52,448 from manufacturing industry and 37,782 from construction.

Four months later, in August 2021, the Ecuadorian Social Security Institute (IESS) reveals new affiliations: 206,300 between July 2020 and July 2021. This means a 6% increase in affiliates in the last year, driven by unpaid household affiliates, dependent workers and volunteers.

The IESS assures that the figure is close to compensating the disaffiliations lost in the first three months of the pandemic, when 240,000 disaffiliations were reported.

In quantity and in percentage, the affiliations of unpaid household workers (semi-contributory) are the ones with the highest growth. There are an additional 121,107, representing an increase of 56.7% in the last year.

Now there are also 47,312 more workers with a dependency relationship who are affiliated with Social Security (an increase of 2%) and 30,462 additional voluntary affiliates. And 12,908 new members without a dependency relationship.

For its part, the National Institute of Statistics and Censuses (INEC), when publishing the Survey of Employment, Underemployment and Unemployment, indicates that adequate employment in Ecuador shows a significant rebound in October.

The number of workers who have a suitable job, that is, who earn at least the basic salary and work at least 40 hours a week, It goes from 2′339.425 to 2′684.258. This means that 344,833 people have joined workers with suitable jobs in one year.

You can also notice a drop in unemployment. They went from 477,372 in October 2020, which represented 5.8% of the economically active population (EAP), to 384,204 in October 2021, that is, 4.6% of the EAP. The INEC indicates that the economically active population in Ecuador reaches 8.4 million in October 2021.

The greatest reduction in unemployment is registered in the urban area, which goes from 7.6% to 5.7%.

In that same month, President Guillermo Lasso sent the draft Opportunities Creation Law to the National Assembly, with which he intended, among other things, to carry out a tax reform and create at least two million jobs. But the Legislative Administration Council (CAL) resolves to return it to him.

Lasso decides to send the projects separately. It begins with the Law of Economic Development and Fiscal Sustainability, which is already in force, and by 2022 it is ready to promote a social dialogue on labor reform with new hiring modalities. (I)