In recent months, the increase in the supply of workers is greater than the demand, having an impact on the unemployment rate.
The rate of employment It advanced again in October, reaching 58.6%. This implies that there are 1,713,000 people employed in Uruguay. However, the number of people offering their jobs grew to a greater extent, which is measured through the activity rate. This led to an increase in the unemployment rate, which went from 8.3 to 8.6% in October. He National Institute of Statistics (INE) estimates that this would imply that there are almost 161,000 people looking for work without finding it.
The Uruguayan labor market has shown signs of improvement in recent months, after a start to the year with some stagnation. But the increase in labor supply (people who offer their work in the market) has been greater than demand (that is, jobs generated). This generates a higher unemployment rate. The dynamics have not had major differences between Montevideo and the rest of the territory.
By taking the moving quarters, the rate of employment It rose 1.6 points between October of this year compared to the same month last year, while unemployment went from 8.0 to 8.4%. Taking the INE’s monthly point estimate of the number of people, there are 51,100 more employed people than a year ago, while the number of unemployed increases by almost 20,000.
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Quality of work and youth employment
It is possible that the labor market is reaching a certain period of stabilization, taking into account the impact that the effect of Argentina and the completion of the works of UPM 2 and its associated projects (despite the fact that housing construction is dynamic). He real salary is rising and that can support consumption, although it remains to be seen to what extent.
From a more structural analysis, the recent increase in employment would be focusing more on the informal employment, which would not be the most desirable. Informality had fallen to around 20% in the immediate post-pandemic years, but now it rose to 22.5% (data from October). This would reflect more employment in certain sectors that usually move informally, and that had been left out of the market due to the mobility restrictions caused by the pandemic.
On the other hand, it must be remembered that unemployment in Uruguay is particularly concentrated on younger workers. Precisely, when the labor market is analyzed by age group, unemployment in young people between 25 and 29 years old is greater than 12%, while for adults (35 to 54 years old) it averages 4.5%.
This would reflect restrictions of various types in the generation of youth employment, including first work experiences. In recent years, the government has attempted to respond to this problem with measures such as Youth Employment Lawbut it has not had enough impact.
Other countries, case of Germany, incorporate powerful mechanisms for youth labor insertion, such as dual training programs, which involve the hiring of young workers with tutoring and internships, while they continue their studies. This results in a much more open and dynamic youth labor market. Experiences of this type are being promoted at different levels, with specialized baccalaureates and the involvement of companies and business chambers.
Source: Ambito
