Unemployment Rises to Highest Figure In a Decade

SANTIAGO — Unsurprisingly, the latest employment figures, corresponding to the May-July period, look bad. Unemployment increased 5.6 percentage points in twelve months. This is the highest figure since 2010.

The National Statistics Institute’s (INE) latest employment report shows that unemployment in Chile reached 13.1 percent in May-July. This is the highest figure in a decade, even worse than the 9.2 percent seen  in 2010.

Chile has plunged into an economic crisis during the protests of 2019. According to Central Bank data, unemployment has been rising since Nov. 2019. In February, Labor Minister María José Zaldívar, blamed the social unrest for the rise.  And as Covid-19 hit the country, more businesses had to shut as result of quarantine measures, leading to yet higher unemployment.

According to INE, the workforce shrank by 15.6 percent during the quarter while the number of occupied persons fell 20.6 percent over 12 months. Daily Diario Financiero reported that would translate to 1.8 million jobs lost. Informal jobs nosedived with a 35.7 present reduction. Worst hit was the accommodation and food services sector with a drop of 49.5 percent, followed by construction with 34.8 percent and commerce with a 24.9 percent reduction.

Following the recommendations of the International Labor Organization, INE added a section on the impacts Covid-19 has had on the income of citizens. Of the seven million employed, 22.8% declared some loss of income, while 58.1% were able to maintain it. INE said of the 1.5 million informal workers, 50.6% experienced some loss of income in the past months.

Read more:

Congress Wrestles With Economic Effects Of The Pandemic

What’s the Government Doing?

The Minister of Economy, Development and Tourism, Lucas Palacios, told Diario Financiero that while the unemployment numbers are alarming, they still do not reflect the devastation in the labor market. Palacios said that in addition to 1.8 million jobs lost, 700,000 employees remain suspended. “More than 2.4 million people of working age are not working. The great challenge we face in the coming months is to create and recover the lost jobs,” he said.

Labor Minister María José Zaldívar told Argentine news outlet Infobae that “in terms of unemployment, of reduction in occupied workers, and in terms of people who are suspended, these are the worst figures in the history of our country.”

According to news outlet Cooperativa, Finance Minister Ignacio Briones said 2 million people are without a job. “The national priority that we all have to address, and that should unite us all, is employment.” Briones added that he is in talks with academics, economists, and parliamentarians to create an employment subsidy plan to bring back jobs.

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