During pandemic, Peru and Argentina were Latin American countries with highest loss of working hours

RIO DE JANEIRO, BRAZIL – Argentina was the second country in Latin America in terms of lost working hours during the Covid-19 pandemic, with 21%, and was only surpassed by Peru, in the context of a fall in the Gross Domestic Product and as a result of “a poorly managed quarantine”, according to Fundación Libertad y Progreso (LyP).

“Argentina lost 4 percentage points of working hours more than the average of the Latin American region and tripled the average loss of working hours worldwide, 8.8%”, said Natalia Motyl, economist of the entity.

On the other hand, the recovery of employment that takes place in 2021 is driven in the country by informal work, to the point that Argentina also, in this case, is the second in the region for its proportion of unregistered workers.

LyP relied on data from the International Labor Organization (ILO) to point out that after Peru, with 27.5% loss of working hours, Argentina was the second country in the region in this classification, with 21%, narrowly beating Colombia (20.9%) and Bolivia (20.5%).

Ecuador (17.6%); Costa Rica (17.5%); Chile (16.7%); Brazil (14.9%); Mexico (12.5%); Paraguay (11.4%) and Uruguay (11.2%) had lower levels of lost work hours during the coronavirus pandemic.

Although a directly proportional relationship cannot be made, the loss of working hours coincided with the fall in GDP in each country, considering that the countries with the greatest declines in this regard were also Peru and Argentina, with 11.1% and 9.9%, respectively.

The deterioration of output in 2020 of the rest of the selected countries was 1% in Paraguay, 4.1% in Brazil, 5.8% in Chile, 5.9% in Uruguay, 6.8% in Colombia, and 7.8% in Bolivia and Ecuador.

“In this context, the labor market was strongly affected with a loss of working hours 4 times higher than in the last financial crisis of 2009, with substantial job losses; reductions in labor income and persistent informality figures,” LyP indicated in its report.

In the Argentine territory, the drop in employment in 2020 was 9.2%, with 9.5% for men and 8.7% for women, although the ratio by sex of employment over the total remained at 56% for men and 44% for women.

In this regard, Motyl explained that the phenomenon occurred because the employment support measures implemented by the government “favored the reduction of working hours or even with no working hours at all” and that “the severance pay system discouraged work and placed a large backpack on the private sector.”

By type of occupation, the most significant drops were observed in the agriculture, forestry and fishing sector with a loss of employment of 56%; in Managers of 43%; in Plant and machine operators and assemblers there was a drop in employment of 36% and Professionals of 33%.

“These four activities account for more than 16% of total employment in our country”, warned LyP, which added that “the services sector had a 29.8% decrease and this sector alone accounts for more than 17% of total employment in Argentina”.

Another point highlighted by the entity was that the recovery of total employment in the region in the last period was driven by informal rather than formal employment: “Moreover, in Argentina, formal employment in the fourth quarter of 2020 was lower than the value of the second quarter of that year, contributing negatively to the net generation of employment in that period”.

In that sense, the Foundation warned that since before the pandemic, the country already presented high rates of informality and that already in 2010, the rate reached 49%, with a slight reduction of three percentage points in a decade.

“If we compare with the rest of the region, we see that the informality rate in our country is the highest in the region, after Peru (68%), doubling the informality rate in Chile, which is 25%”, said the entity.