Labor Market: How Many Years Will the Recovery Take?

Due to the economic crisis it is estimated that by the end of 2020 Panama will have 400 thousand new unemployed and the unemployment rate will climb to 25%, assuming that the country generates between 45 thousand to 50 thousand jobs annually, it will take about eight years for the recovery to take place.

Thursday, December 10, 2020

The outbreak of covid-19 caused a serious economic crisis in the country, since due to the spread of the disease the authorities have decreed severe home quarantines, mobility restrictions and have limited some productive activities.

Official reports state that because of the health emergency, Panamanian economic activity reached its lowest point in May 2020, the month in which an annual fall of 31% was registered.

According to the latest official data available, in August 2019 the unemployment rate at the national level rose to 7%, but due to the drop in production, the authorities predict that the level of unemployment will climb to 25% by the end of 2020.

The increase from 7% to 25% in the level of unemployment, is equivalent to 400 thousand new unemployed in the country, according to estimates by the Ministry of Labor Development (Mitradel).

Under normal conditions the Panamanian economy generates between 45,000 and 50,000 jobs each year. If these levels of job creation are maintained, it would take 8 years for employment to return to pre-crisis levels.

Check out the "System for monitoring the markets and economic situation in the countries of Central America", developed by CentralAmericaData.

Rene Quevedo, labor consultant, told Laestrella.com.pa that "... within the loss of jobs, young people and women are definitely the most affected population. 51% of all jobs at risk or already lost due to the crisis belong to young people under 30."

Quevedo added that "... initially the impact of covid-19 was in seven economic sectors: commerce, industry, logistics, tourism, hotels and restaurants, services, and then construction was added, among other additions, according to data from the Comptroller General's Office."

According to forecasts by the International Monetary Fund that were released in October 2020, it is expected that the Panamanian economy will fall 6% in 2020 and grow 4% in 2021.

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More on this topic

From Wage-Earning Employment to Project-based Work

March 2021

The labor market reports a structural change, as fewer and fewer people are being paid a fixed salary for their work, while at the same time the number of employees earning per project is increasing.

Although the trend has been reported globally for several years, the pandemic accelerated this process, as the economic crisis generated by the Covid-19 outbreak destroyed thousands of formal jobs.

Costa Rica: Unemployment Ended 2020 on a Downward Trend

February 2021

As a result of the crisis caused by the covid-19 outbreak, during the second quarter of 2020 the unemployment rate at national level rose to 24%, for the period from July to September it decreased to 22% and in the last three months of the year it fell to 20%.

Regarding the unemployed population, for the IV Quarter of 2020 it was estimated at 488 thousand people, of these 240 thousand are men and 248 thousand women, the unemployed population increased by 178 thousand people on a year-on-year basis, 97 thousand men and 81 thousand women, informed the National Institute of Statistics and Census (INEC).

Costa Rica: Unemployment Rate Remains at 22%

December 2020

In the current scenario of economic crisis, during the mobile quarter from August to October 2020 the unemployment rate at the national level was 21.9%, a proportion similar to the 22% reported from July to September.

The National Institute of Statistics and Censuses (INEC) reported that for the August, September and October 2020 moving quarter, the population of 15 years old and older with an incidence of labor due to the effect of Covid-19 was 1.13 million people (28.3%). The incidence of labor in the labor force was estimated at 981,000 people (40.8%). A total of 474,000 employed people (25.2%) have some incidence of the pandemic in the workplace. Of the unemployed, 507,000 people (96.3%) were affected in their search for employment. Finally, the labor incidence caused by the emergency affected about 154 thousand people (9.6%) outside the workforce.

Unemployment Begins to Decline in Costa Rica

November 2020

In the current scenario of economic crisis, during the third quarter of the year the unemployment rate nationwide stood at 22%, a proportion that is lower than the 24.4% reported for the mobile quarter from May to July.

According to the report released by the National Institute of Statistics and Censuses (INEC), 42% of the people who were unemployed during the third quarter of 2020 said that they had less than three months to look for work.

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