Full Employment Declines in Q2

ECUADOR - In Brief 18 Jul 2018 by Magdalena Barreiro
President Moreno will be sending his veto to the recently approved economic law today. In the meanwhile, INEC published the latest employment information that shows a decline in the quality and number of jobs between Q2 2017 and Q2 2018.In fact, 161,689 full-time jobs (adequate employment) were lost as full employment falls from 49% to 47.6% in this period. On the other hand, underemployment increases from 45% to 47% but unemployment falls from 5.8% to 5.2% showing a migration from the stable and protected sector to the informal sector increasing social vulnerability. Cuenca is the city with the highest rate of adequate employment (66.5%) followed by Quito (59%), but Quito --mainly a bureaucratic city --has the highest rate of unemployment (9.8%). Some analysts have linked this decline to the contraction in public expenditure that falls around $600 million between Q2 2017 and Q2 2018. This is not good news for President Moreno who promised the creation of one million jobs during his presidential campaign of March 2017. If this evidence influences the presidential veto, we might see tax incentives for the private sector more closely tied to the creation of jobs.

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