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.
In Panama, the first debate was approved in the first debate of the legislative project that intends to gradually reintegrate the employees to their companies, the same that have already restarted their activities and that in 2020 suspended labor contracts due to the crisis caused by the covid-19 outbreak.
The bill legalizing the gradual reintegration of suspended contract workers to their companies, which will be in force until the end of the year, has been pending in the National Assembly since February 8, after being submitted to the Presidency by the Minister of Labor, Doris Zapata.
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.
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.
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.
By the fourth quarter of 2020, 21% of companies in the country expect to reduce their payrolls, a proportion that is higher than the 14% registered in the third quarter of this year, a rise that is explained by the economic crisis generated by the covid-19.
Panamanian employers report negative hiring expectations for the October-December period. Three percent of the employers expect to increase their workforce, however, 21 percent expect to reduce it, while 68 percent remain unchanged, resulting in a Net Employment Trend of -18%.
Focusing the skills of employees according to new opportunities and approving laws that allow for more flexible labor agreements are some of the proposals being discussed in Guatemala for companies to face the new labor reality.
Following the economic crisis that caused the outbreak of covid-19, the recovery and generation of jobs is one of the issues that occupies much of the attention of the government in Guatemala.
Faced with the sudden change that the new normal generated in companies, employees are challenged to increase their skills to work remotely, adapt to more flexible contracts and refine their technological skills and cognitive qualities.
Telecommuting has become an everyday occurrence among companies in the region, which have had to adjust to the restrictions imposed by governments due to the outbreak of covid-19.
In this scenario of economic crisis, the Ministry of Labor has extended for the fourth time and for 30 more days, the provision that allows companies in the country to suspend the contracts of their employees.
Executive Decree No. 100 of July 1, 2020 authorized a further extension of the temporary suspension of the effects of employment contracts, which will apply automatically for a period of 30 calendar days in companies whose operations have not been reactivated according to the plans for a gradual return to economic activity, reported the Labor Ministry.
During the first three months of this year, 34,968 work contracts were registered in Panama, 40% less than the figure reported for the same period in 2019.
Although the drop in hiring had been observed since previous months, in March this year the situation worsened, when a 65% year-on-year drop in the number of contracts signed was reported, largely explained by the health and economic crisis resulting from the covid-19 outbreak.
After a home quarantine was decreed in El Salvador, the government intends to prohibit the dismissal of employees who do not attend work.
In the context of the crisis generated by the spread of covid-19, a proposal is being discussed that establishes that the employees of companies that are not allowed to continue their activities should be sent home with their salaries and benefits, and that they cannot be subject to dismissal, salary discounts or suspension of contract, nor be forced to take their vacation in advance.
By the second quarter of 2020, 9% of companies in the country expect to increase their payrolls, which is less than the 10% recorded in the same period in 2018.
Panamanian employers report moderate hiring plans for the second quarter of 2020, with 9% of employers expecting an increase in their workforce, 10% anticipating a decrease and 76% remaining unchanged, resulting in a Net Employment Trend of -1%, reported Manpower.
After the first quarter of 2020 in Guatemala, 10% of companies reported that they planned to increase their payrolls, for the second quarter this proportion rose to 15%.
Employers in Costa Rica report cautiously optimistic hiring plans for the second quarter of 2020. Fifteen percent of employers are contemplating an increase in their payrolls, 6% anticipate a decrease and 78% will remain unchanged, so the Net Employment Trend is +9%, reported Manpower.
After 12% of companies in Guatemala reported in the first quarter of 2020 that they planned to increase their payrolls, by the second quarter this proportion had risen by only 1%.
Employers in Guatemala report positive hiring plans for the second quarter of 2020. 13% of employers have contemplated an increase in their payrolls, 2% expect a decrease and 83% will remain unchanged, reported Manpower.
During January of this year 30,270 work contracts were registered in the country, 11% less than the figure reported in the same period in 2019.
The reports of the General Comptroller of the Republic detail that between the first month of 2019 and the same period of 2020, the types of defined contracts registered at the headquarters of the Ministry of Labor decreased from 8,730 to 7,094.
Last year, 216,198 work contracts were registered in the country, 16% less than the figure reported in 2018.
Reports from the Ministry of Labor and Labor Development detail that between 2018 and 2019, the types of indefinite contracts registered a decrease, falling from 70,000 to 54,000.
The ministerial reports explain that fixed-term contracts also registered a decrease for the periods in question, falling from 112,824 to 101,443, and in the case of fixed-term contracts they fell from 74,505 and 60,564, respectively.