Formal employment rises but remains below pre-pandemic levels, government says

Jan 29, 2022 | 4 comments

The National Institute of Census and Statistics reports that formal employment rose to 33.9 percent of the working population in December 2021, up from 30 percent early in year, at the height of the Covid-19 pandemic.

The government says employment is rising but only 34 percent of the working population has a formal job.

“We are recovering the lost jobs but the gains are coming slowly,” says INEC director Roberto Castillo. “In February 2020, before the beginning of the pandemic, we registered 38.8 percent employment in the formal sector, which means the portion of the population subject to income tax and Social Security membership.”

He said that December estimates are that 350,000 are unemployed, almost 100,000 more than in December 2019.

Castillo said that the number of informal workers who are not registered with the Internal Revenue Service remains near 60 percent. “This figure is similar to that in other Latin American countries and is one of the reasons that the region lags other areas of the world in prosperity and growth. Because they are off the books, these workers do not receive Social Security benefits, such as pensions and free medical care, which leads to higher levels of poverty.”

Castillo said that improvement in the pandemic health outlook should lead to greater employment in coming months. “Based on the information we have received from the Ministry of Health, we expect continued economic recovery this year, which means improving employment opportunities.”

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