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August 22, 2014
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Employment safe from crisis (for now)

In first three months of 2014 rate increases from 6.4% reported in fourth quarter

Unemployment in the first three months of the year came in at 7.1 percent, according to the INDEC statistics bureau, marking a 0.8 percentage-point decline from the same period of last year. Yet the number of people out of work rose 0.7 points from the 6.4 percent registered in the last three months of 2013, according to official figures reported yesterday.

The 6.4 percent unemployment posted for the final quarter of 2013 was widely explained by economists as having stemmed not from greater employment, but from a significant 1.1 percent decrease in part-time employees seeking more hours — that is, fewer people were out hunting for employment in the job market.

In the last three months, underemployment surged back up to 8.1 percent from the 7.8 percent registered by INDEC for the last quarter of 2013 only due to the rise in unemployment, meaning that more people were actively looking for jobs.

The number of citizens underemployed thus rose to just over 1.5 million — with 956,000 wanting to work more hours — out of an economically active 18 million.

The news comes amid debate over whether the economy has entered recession as a whole, with industrial figures for the first quarter confirming at least partial stagnation.

On Friday, INDEC reported that economic activity fell 0.9 percent in March compared to the same month last year, amounting to a meager growth of 0.6 percent for the quarter.

The sector that suffered the sharpest drop in activity was industrial production, which contracted six percent compared to March 2013, meaning a 3.3 percent decrease during the first three months of 2014.

Looking through a more micro lens, the automobile sector has borne the brunt of the situation, strongly affected by the luxury goods tax hike at the start of the year, dwindling trade with Brazil, the absorption of pesos by the Central Bank that made credit lines pricier and the steep devaluation in January.

Such factors have led to thousands of temporary suspensions of workers by auto makers including Renault, General Motors and PSA Peugeot Citroën, primarily in Córdoba, the country’s vehicle production hub.

Among the areas with the lowest levels of unemployment were the cities of Santa Rosa, La Pampa, at 1.2 percent, the eponymous provincial capital of San Luis, at 1.5 percent, and the provincial capital of Formosa, at 2.1 percent

Seasonal rise

In the Greater Buenos Aires area, which includes this capital city, unemployment fell from 8.9 to 7.7 percent in the inter-annual first quarterly comparison, but rose 1.2 percent on the 6.5 percent posted for the final three months of 2013.

There was an inter-annual rise in the Patagonia area, however, were the jobless increased from 6.4 to 6.6 percent, also rising from the 5.5 percent registered during the first three months last year.

There was a general drop in unemployment in the country’s provinces — without including Buenos Aires — from 6.8 to 6.4 percent during the same first quarter comparison.

INDEC upheld its zero-percent unemployment figure for the Greater Resistencia area, in Cabinet Chief Jorge Capitanich’s home province of Chaco.

According to INDEC, only 18 percent, or fewer than one in five, registered workers in northern Argentina are employed by the private sector, compared to the 35 percent seen in Buenos Aires province and 44 percent in the capital.

Under-the-table

A further concern is that unregistered employment in the private sector stands at about 40 percent, and at 10 percent in the public sector. INDEC says that overall, 33.6 percent of workers are unregistered, which is progress on 2003’s 58.7 percent.

Registration and an end to under-the-table labour — characterized by arbitrary remuneration, excessive working days, the lack of health benefits, unsafe conditions and the lack of access to pension systems — have thus been widely demanded by unions across the board, regardless of their political affiliation.

The Labour Ministry reports that young people under the age of 24 account for 58.7 percent of precarious employment.

With regard to the effect of welfare programmes on the unemployment rate, beneficiaries of the Argentina Trabaja labour insertion plan are classified as employed, because in theory they are workers, as they are usually required to carry out social work.

INDEC’s employment figures are considered credible and regularly clock in relatively close to those issued by private consultancies. The latest report by the Argentine Catholic University’s (UCA) ODSA institute was 9.3 percent for 2012, compared to INDEC’s 6.9 for that year.

Herald staff

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