The Wrong Recipe Against Unemployment - CentralAmericaData :: The Regional Business Portal

The Wrong Recipe Against Unemployment

In Costa Rica a law iniatiative pretends to force companies to have 25% of their workforce composed by young people aged between 17 and 24 years old.

Tuesday, November 7, 2017

EDITORIAL 

The problem of unemployment that affects thousands of young people in Costa Rica and the Central American countries will not be solved simply by forcing private companies to hire a certain proportion of young
employees, regardless of their qualifications and skills, or even worse, without considering whether there is an actual need for hiring or not.

A bill in Costa Rica reflects the myopia with which the public sector visualizes a problem as serious as youth unemployment one is. In their limited vision of the economic reality of the country, congressmen are proposing to solve the problem with a law that would force companies to give one free hour per day for training and make 25% of their hirings consist of employees aged between 17 and 24 years old.  

As Costa Rican industrialists point out, the solution to youth unemployment is in the implementation of a dual education model, and not in a law that will only raise production costs for the private sector, and continue to deteriorate the already delicate competitiveness of the country's economy.

See "Dual education: Yes you can"

See "Let's Try Dual Education to Combat Youth Unemployment"

"Learning at work: Dual education"

From a statement issued by the Chamber of Industry:

ICRC opposes the inappropriately named "Youth Employment Stimulus" project

  • Industriales say that the bill does not solve the problem of employment for young people. 
  • The two main concerns are: the obligation that would be imposed on companies to make 25% of their hires on the payroll be people aged between 17 and 24 years of age; and the obligation to grant one hour a day for training.

Tuesday, November 7, 2017. The Chamber of Industries of Costa Rica expressed its opposition to Bill No. 20,282, misnamed "Encouragement of Youth Employment".  His opinion was formally manifested to the Special Permanent Commission of Youth, Children and Adolescents at the Legislative Assembly, which consulted the Chamber.

Read full release (in Spanish).

More on this topic

El Salvador: Tax Incentive for Hiring Young People

February 2017

Companies that hire people aged between 18 and 29 years will be able to deduct from income tax between 3 and 5 minimum wages, depending on the number of young people they hire.

With the amendment to the Incentive Law for the Creation of First Employment for Young People in the Private Sector, adopted by the Assembly, tax exemptions are established for businesses that hire young people aged between 18 and 29.

Let's Try Dual Education to Combat Youth Unemployment

February 2016

In Central America, the youth unemployment rate is estimated at over 24%, while in Germany, where the dual education is practiced, youth unemployment is 6%.

EDITORIAL

A visit to Costa Rica by the German Education Minister has put back on the table the concept of dual education, an education method where time is shared between the traditional classroom and work as an apprentice in a trade or professional specialty, in a company.

No Drop in Unemployment in Costa Rica: 9.6%

February 2016

While the unemployment rate is maintained, the rate of non-labor participation (people outside the labor force in respect to the population who are 15 years of age or older) increased by 2 percentage points.

From a statement issued by the National Institute of Statistics and Census (INEC)

State will Pay Companies Hiring from Vulnerable Populations

September 2015

The government of Costa Rica will pay $2,700 per person to enterprises hiring in vulnerable sectors and whose staff remain in their posts for at least 12 months.

From a statement issued by the Presidency of Costa Rica:

Promoting job creation in two ways: an economic benefit to businesses that hire people and training in dual education.

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