Ecuador job market contracts in 2019 as more than 100,000 full-time jobs are lost
Although Ecuador’s official unemployment rate held steady in 2019 at 3.8 percent, the number of workers holding full-time employment dropped by more than one percent. According to the National Institute of Statistics and Censuses (INEC), 115,782 40-hour-per-week jobs were lost in 2019.
Labor Minister Andrés Madero said that most of those who lost full-time work found part-time jobs. “The problem is that, in many cases, these workers are no longer in the national social security system and lose access to health care and the accumulation of retirement benefits,” he said. “We are seeing growth in the informal employment sector, which often happens in times of economic stagnation.”
Madero says that underemployment in 2019 rose to 17.8 percent from 16.5 percent in 2018, reflecting the number of part-time workers looking for full-time employment.
Compounding the impact of full-time job losses is the demand for additional employment generated by population growth. The labor ministry estimates that the economy must generate 160,000 new jobs a year to keep up with demand. “Added together, the full-time jobs lost and the increased demand, we were down about 275,000 positions in 2019,” Madero said. “This obviously puts significant downward pressure on the economy.”
While Ecuador’s GDP growth was marginally positive, up .02 percent, Madero conceded that the overall economic picture is not good. “There are a number of factors affecting the outlook with low oil prices having the biggest impact,” he said. “The influx of Venezuelans into the country has put strains on the employment market, both formal and informal,” he said, adding that there are an estimated 400,000 Venezuelans currently in Ecuador. “The refugees need work and thousands are working informally.”
Of Ecuador’s three largest cities, Cuenca fared best in employment, showing no loss of full-time employment. A representative of the Cuenca Chamber of Commerce conceded, however, that little additional employment was added in 2019.