QCOSTARICA — Costa Rica reports a loss of 181 jobs per day during the first 18 months in the administration of President Rodrigo Chaves, a disappearance of 99,184 jobs in official records.
This is the greatest deterioration of the labor market in the first stage of the last four administrations, which contrasts with the administration’s promises to generate more than 205,000 new jobs by 2026.
“It is a very critical situation, almost 200 jobs per day, around 100,000 in this Government, it is something very serious. It is an issue that shows the increase in inequality in Costa Rica and that, despite increases in the Gross Domestic Product (GDP) and exports, profits are distributed in an increasingly unbalanced manner,” commented economist Daniel Vartanian.
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In November of last year, the Central Bank of Costa Rica (BCCR) raised the GDP growth expectation for 2023 to 5%, while the Economic Commission for Latin America and the Caribbean (ECLAC) estimated that the value of the country’s exports would increase by 16%.
However, these positive indicators are not reflected in an improvement in the labor market, which has accumulated a downward trend in twelve months and only an improvement in one of the measurements of the Instituto Nacional de Estadística y Censos (INEC) – National Institute of Statistics and Censuses, in its Encuesta Continua de Empleo (ECE) – Continuous Employment Survey.
In May 2022, the start of the Chaves administration, the number of employed people (those who declare they have a job) was 2,157,855, while in the last measurement, in November 2023, the number was 2,058,771.
This is the smallest number of Costa Ricans with employment in more than two years, since August 2021 when 2,047,206 employed had been reported. It took 27 measurements to fall back to similar levels.
Additionally, this is the greatest deterioration of the Costa Rican labor market in the first stage of the last four governments. During Laura Chinchilla’s management (2010-2014), an improvement of 3,904 jobs was recorded in 14 measurements (they were not carried out before), which represented a creation of 8 jobs per day.
Subsequently, the Luis Guillermo Solís administration (2014-2018) reported a drop in employment of 20,816 positions in its first 18 months: on average, 38 were lost per day. However, the Carlos Alvarado administration (2018-2022) registered an increase of 49,922 jobs in her initial 18 months, an average of 91 per day (see graph).
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It should be added that the majority of the jobs that disappeared were to women who, in themselves, face a more complicated situation in the workplace: more than 65,000 of the positions that no longer appear correspond to women, while in the case of men, there were around 34,000.
Looking for work
Vartanian highlighted that the data on employed people is more relevant than that on unemployment, as it refers to positions that existed. “If a person retires or leaves a job, another can replace him or her, but this must be reflected in maintaining the number of employed people. If not, it means that there are positions that are dying, that were eliminated,” he highlighted.
The economist emphasized that these numbers reveal the existence of growing inequality since the increasing performance of production is not reflected in more jobs. “It means that the profits of the economy are distributed in favor of the business sector, in very few, thereby increasing an inequality that was already worrying,” he said.
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The actions of the Government, which did not adopt this matter as a priority, contribute little. Only in July 2023, more than a year into its tenure, it announced the National Strategy for Employability and Human Talent (ENETH). And, even though last November authorities congratulated themselves on their progress, the figures indicate that, since its launch to the last measurement, the hemorrhage of jobs accelerated: from a loss of just over 32,000 jobs in what took place in the year after the launch of Brete (as the Government named it), fell by 60,000 in the latest measurements.
The changes on the fly did not help either, such as the announcement that the Coalición de Iniciativas de Desarrollo (CINDE) – Coalition of Development Initiatives – would be a pillar of the strategy to enhance the country’s human capital, recognized by President Rodrigo Chaves himself in August 2022, for nine months, then dynamited that alliance, eliminating all government contributions to CINDE.
Semanario Universidad requested the version of the Minister of Labor, Andrés Romero, on the panorama that causes the deterioration of the labor market, as well as if the goal of creating 205,000 jobs from 2023 to 2026 is maintained, which would imply that more than 100,000 should be created in the next three years to be able to achieve this promise generated during the presentation of the National Development Plan. At press time, no response had been received.
However, Vartanian believes that the “Ruta del trabajo” (Work Route) has not made progress, since it requires an investment that is not appreciated anywhere. “In the 1980s, it was estimated that around US$5,000 per day was required to create a job, but, instead of investing, we see social investment being cut to minimum levels. There is no labor policy for farmers, for workers,” he insisted.
Article was translated and adapted from SemanarioUniversidad.com. Read the original, in Spanish, here.
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