We are at a critical juncture. A social crisis unleashed in October 2019 unresolved, in suspense. An institutionality that has proved incapable of channeling the demands of the population. A self-absorbed and wandering political and business elite. A citizenry that refuses to be deciphered or registered: “neither left nor right” seems to say, but with concrete demands and urgencies, zigzagging political behavior and exhaustive decisions, the rejection of the constitutional proposal is a symptom of that. Crime and drug trafficking, immigration, the Mapuche conflict and the environmental crisis. At the international level, the Russia-Ukraine conflict, the continuous increase in the price of oil, raw materials and food, as well as the closure of the borders of China, Chile’s main commercial client, both at the export and import levels, are some of the factors that have strongly affected our economy.
The disruption of the pandemic and its hangover set a framework of global economic slowdown. In Chile, inflation levels are unprecedented in the last 30 years. The interest rate has increased steadily, as has the Development Unit, which has had a strong impact on the costs of mortgage loans and the possibility of access to one’s own home. At the end of 2022, real wages completed 14 months of decline, falling back to levels of 4 years ago and are expected to continue to fall. At the same time, according to the Central Bank, total household debt increased, standing at 48.2% of the Gross Domestic Product, due to the increase in bank loans.
Regarding the labour market, the employment rate at the national level, especially in 2020, was strongly affected. Indeed, in the May-July quarter this showed a historic decrease that reached 45%, 12.9 points less than the same quarter of 2019. Until the end of 2020 and the beginning of 2021, the country’s employment rate rose steadily, reaching 51.6% in December-February 2021. Subsequently, after a setback in the first months of 2021, there is a slow but steady increase, which in the September-November quarter of 2022 is expressed with an occupancy rate of 55.1%, the highest in almost three years, but still lower than those registered prior to the pandemic, which exceeded 58%. Even so, the increase in layoffs “for company needs” is viewed with concern, which, compared to 2021, have increased by 30%.
Those regions that, since the beginning of the pandemic, remained permanently above the average national occupancy rate have been Aysén, Magallanes, Santiago and Antofagasta. Tarapacá, which in this period was generally above the national average, between March and July was a couple of points below. The same Atacama in the January-March 2020 quarter. All other regions, for most of the 2020-2022 period, remained below the national average occupancy. The most critical situations were observed in 2020 in La Araucanía, with an occupancy rate of 38.4% in the May-July quarter; Ñuble, with a rate of 41.1% in the April-June quarter; and Valparaíso, with an occupancy of 41.7% in June-August.
On the other hand, regions whose productive behavior is traditionally marked by seasonality, specifically in the agricultural sector, such as O’Higgins (blue in the graph below) and Maule (green in the following graph), whose employment rates increase in summer and fall in the central months, particularly during 2020, matched their behavior with respect to the curve of the average national occupation (gray in the graph below), that for the pandemic had an unusual decline, returning to show its typical difference during 2021, although with levels evidently lower than those of previous years.
Specifically in the region of O’Higgins, since the June-August 2020 quarter there has been some recovery in the figures of the employment rate, which has increased during the last two years, although in 2022 this recovery was less accelerated than in 2021, the same as for 2023 compared to 2022. This behaviour, taking into account the stationary nature of the regional economy and taking into account the contextual elements set out at the outset, suggest that the recovery in regional employment will be gradual, slower and more gradual than in the periods.OS 2020-2021 and 2021-2022, although with better figures and, hopefully, with greater stability.
Most likely, the factors that will contribute to the evolution of the employment rate during the year 2023 will be the extension throughout the first semester of the IFE Labor and the Protect Subsidy, which is estimated to contribute to the creation of about 600 thousand formal jobs nationwide. The regularization of international trade since the end of the restrictions imposed by the pandemic is another element that can positively affect the local and regional economy, which is highly integrated into global export circuits.
The increase to $410,000 gross of the minimum monthly income, starting in January 2023, although at first it may cause a distortion in the labor market, this will be absorbed quickly, as happens in each adjustment of the minimum wage, allowing a wage arrangement to weather in part, perhaps minimal and in some cases insufficient, The increases in the cost of living to about one million people who receive this remuneration nationwide.
Other initiatives, such as the labor projects that the Executive will promote this year, namely: branch collective bargaining, the promotion of wage equity and the qualification of occupational diseases, in addition to the reduction of the working day to 40 hours per week, currently under discussion in Parliament, may be problematic for the most conservative faction. reactionary and retrograde of the business community, as well as for micro, small and medium-sized enterprises, due to their particularities and fragility, with which, policies that hope to modernize the country’s labor relations, as well as improve the productivity of companies and the living conditions of individuals and their families, could become a threat to recovery if they are not carried out with the necessary political tact, gradually and consensually.
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The content expressed in this opinion column is the sole responsibility of its author, and does not necessarily reflect the editorial line or position of El Mostrador.
