RIO DE JANEIRO, BRAZIL – Uruguay’s labor market strengthened its recovery in 2021, reaching pre-pandemic levels of the new coronavirus, even with the prospect of wage growth for the current year, evaluated the researcher of the Center for Development Studies (CED), Ignacio Umpiérrez.
“The Uruguayan economy not only recovered all the jobs that were lost during March and April 2020 (some 108,000) but by the end of 2021, it had 9,000 jobs above pre-pandemic levels,” Umpiérrez stressed in an interview with Xinhua.
Last December, the unemployment rate dropped to 7% of the Economically Active Population, the lowest record in four years, from 7.4% in November, according to the National Statistics Institute (INE) released this week.
“The data presented by INE were very positive, in line with what previous months had been showing, which reaffirms that the recovery trend of the labor market is sustained,” said the also economist.
“Of the 50,000 jobs created in 2021, nine out of 10 jobs were in the interior. It is highly plausible that the agro-industrial, agro-exporting sectors have had a great incidence in those numbers,” he estimated.
He maintained that these sectors were particularly “very dynamic” throughout 2021 and had “a great multiplier effect on the rest of the economy, not only on the sector itself but also on the chaining of services and commerce”.
Uruguayan exports also had great dynamism in 2021, with a year-on-year increase of 43%, led by beef, cellulose, soybeans, and dairy products.
Umpiérrez considered that the construction of the second pulp mill of the Finnish company UPM, which implies a millionaire investment and related infrastructure works, could have had a high incidence in the recovery of employment, which “could have been another factor that influenced the figures”.
However, the creation of jobs was uneven across the country, with departments affected by the retraction of tourism and the closing of borders, as opposed to the positive impacts of UPM in the central zone and rice, dairy, and cattle raising in different regions.
According to the interviewee, the Uruguayan economy will grow around 3.3% in 2022 and create an average of 30,000 jobs, considering the relationship between Gross Domestic Product (GDP) growth and employment.
The government of Uruguayan President Luis Lacalle Pou has estimated that the South American country’s economy grew by 3.5% during 2021. The official data will be released next March.
“With this dynamism of employment and the economy, there begins to be an important room for improvement for wage recovery,” said the economist.
The scenario allows the country to approach the maximum employment of 2014, when the cycle of high prices of raw materials ended, according to the consideration of the interviewee.
However, the CED researcher mentioned that there are still significant challenges despite the improvement registered in the labor market.
“Not all the jobs generated are of good quality. There are almost 340,000 Uruguayans with employment problems, and the starting point before the pandemic had already deteriorated”.
“In the future, the Uruguayan economy would be much better than it was in the previous five-year period, but without reaching the great commodities boom levels,” Umpiérrez said.