Another worrying fact that reveals how hit the labor market is from the pandemic delivered the Microdata Center of the Faculty of Economics and Business of the University of Chile. While June’s unemployment rate reached 14.1%, and is 1.5 percentage points (pp) lower than that seen in March 2020, the numbers for busys catch the eye.
According to the Occupation and Unemployment Survey (EOD) in Greater Santiago, the occupied experienced a drop of 16.9% in twelve months, a figure only comparable to that of 1982 (16.1%).
Analysis according to economic activity reflects a collapse of employment in Construction (47.7%) and Personal and household services (43.2%), followed by falls in Commerce (15.8%), Community and social services (10.7%), Government and financial services (9.7%) and Transport services and others (8.9%), by contrast, employment in manufacturing industries shows a 5.0% increase, although it fell from the previous quarter (5.4%).
The occupancy rate was 46.7%, which means a drop of 11.1 pp in a year. The gender breakdown indicates that the female occupancy rate is comparable to that of 2004, while the male occupancy rate falls to its lowest level in 20 years.
Not only that: the EOD accounted for 2 million 612 thousand inactive people, of whom 400 thousand did not seek employment due to the pandemic, even though they were available for work. By recalculating – considering these people – the Microdata Centre concluded that the labour participation rate would rise to 61.3%, while the unemployment rate would reach 23.8%.
In the group of those employed, 30.6% are temporary or absent inactive workers and 38.4% are covered by the Employment Protection Act, therefore they receive income from the Cessation Insurance.
Other facts
According to the Analysis of the Microdata Center, from a historical perspective the current unemployment rate is above the average of the last 20 years (9.5%) and the last 10 years (7.6%). In addition, it is 1.5 percentage points (pp) lower than that observed in March 2020, and 5.7 pp on June 2019.
The increase in unemployment in twelve months is due to the 16.9% drop in total employment and the contraction of 11.4% in the labour force. In this scenario, the number of people who are subtracted from the labour market increased, thus decreasing the participation rate from 63.1 to 54.3% in twelve months.
Also, those unemployed in Greater Santiago increased 47.6% in one year. The gender breakdown shows that the male unemployment rate is 15.8%, or 7.8 pp more than a year ago, while the female unemployment rate is 11.6% representing a 2.5 pp hike. The sectors most affected by cessation are Construction (28.8%), Manufacturing Industry (14.8%) Trade (13.6%).
As regards wages, the survey states that the labour market situation mainly affects the self-employed, whose income averages $352,538, a decrease of 11.9% in twelve months.
