Informality settled in 75% of the recovery of Peruvian employment

By Jackeline Cardenas I.

Labor informality in Peru persists with 75% since the pandemic began until the third quarter of 2021, estimated the International Labor Organization (ILO).

In this regard, the ILO director for Latin America and the Caribbean, Vinicius Pinheiropointed out that in the case of Peru “The starting point to combat informality is social dialogue” and ensures that there is consensus between the different actors that are involved in the debate.

However, he argued that there are different views, “for the Government the solution comes from implementing more taxes, for employers more facilities and for workers more rights. Everyone is right, but the way to arrive at a formula that solves the problem is to develop structural policies and some adjustments in labor matters, ”he stressed.

Lastly, Pinheiro was positive about the support that the ILO can provide to Peru to accompany it on the path to formalization.

In this sense, the ratio of labor informality in our country has stagnated, considering that at the beginning of last year the then Minister of Economy, Waldo Mendoza, estimated that the informality increased from 70 to 75%, and even this could reach 80% of the working population.

regional context

According to the ILO, one of every two people employed in Latin America It operates in informality, since the partial recovery in the region came hand in hand with the growth of informal employment, which ranges between 60 and 80%.

The region would then go through a “mediocre” recovery process, since 4.5 million jobs are still missing to reach pre-pandemic figures. Of this figure, 4 million correspond to jobs for women, which reveals that gender gaps are accentuated.

“The most intense impact among women in the region is associated with the greater presence of women in economic sectors strongly affected by the crisis, such as hotels and restaurants, and in other service activities and the household sector. On the other hand, to the higher incidence of informality among women”, reads the report.

In this sense, the ILO details that the average rate of female unemployment reaches 12.4% —the same as 2020—, which makes it clear that there has been no improvement, so policies with a gender perspective are urgently needed to accelerate the creation of formal employment (see infographic) and lower the rate to 9.7% as of the ninth month of 2019.

Fall in labor income by households

At the regional level, the ILO observed a sharp contraction in household labor income throughout the region, aggravating this context due to the acceleration of inflation and translating this into a greater risk of loss of purchasing power (see infographic).

In that sense, Peru reached the highest peak of revenue losses during the second quarter of 2020 (greater than 35%), although with the passing of the months it slightly exceeded 15% since the fourth quarter of that year, and by the second quarter of 2021 it is already at 9%, with which a better status is achieved than countries such as Argentina, Brazil, Costa Rica and Mexico.

Breaking down the employment figures

The activities that provided the most jobs during 2021, at the regional level, are construction (16.7%), commerce (9.1%) and transport (6.7%), figures that contrast with 2020, in which These activities were contracted by the COVID-19.

Although, the recovery in hotels and restaurants, registered at 5.4%, does not compensate for the 17.6% job loss observed in the first year of the pandemic.

Latin America had the largest contraction in working hours in 2020 (-16.2%), doubling the global level (-8.8%). In 2021, the fall went from 8% to 6% in the third quarter.

figures

28 million people are currently looking for work.

9.6% is the regional unemployment average.