Colombia’s unemployment rate stayed below the double digit mark in August, registering 9.3% according to a report published on Monday by Colombia’s department of statistics DANE.
“The unemployment rate was 9.3% [in August], falling 0.4 percentage points compared to what was registered in August of 2012 (9.7%),” read the statement.
Colombia’s unemployment rate has fallen below double digits over the last year, marking a new normal after experiencing 15% unemployment a decade ago.
Keeping unemployment low, a goal in line with the World Bank’s quest to pull millions around the world out of poverty, could be called a quiet triumph for Colombia’s current administration, which has found itself embattled by widespread worker strikes and violent urban and rural protests this year over the government’s economic policies. Approval ratings have dropped significantly for the way Colombians feel Mr. Santos is handling the country.
On top of all these challenges, how to resolve high levels of structural unemployment and making growth inclusive are the biggest questions Colombia has to answer.
Colombia is still growing at a fast clip. According to the World Bank, GDP reached 4.3% in 2012 and it is likely to touch 4% this year, outpacing the 2012 average (3%) for Latin America and the Caribbean. But according to the International Monetary Fund, inclusive growth is a major challenge that Colombia needs to address.
Though Colombia’s unemployment rate is better than it was 10 years ago, it is still well above its Latin American and Caribbean neighbors. The regional average is 6.5%. Added to that is the sore fact that more than 8% of Colombians live on less than $1.25 per day, what the World Bank considers the brink of extreme poverty. That is a greater proportion than Mexico (<2%) and Brazil (6.1%).
In a report published earlier this year the IMF said that “reducing the high rates of informality and structural unemployment, including… tax and pension reforms” is the main challenge Colombia’s policy makers sholuld turn their attention to in the medium term.
Informal sector challenges
That challenge is exemplified by the tragedy and fortune that Bogotano Martha Osorio has lived through.
Ms. Osorio was born into poverty and lived for 23 years in one of Colombia’s most notorious drug-and-crime-ridden urban neighborhoods: Bogota‘s Cartucho. After breaking her drug addiction, she put herself through rehabilitation and managed to turn her life around. She is now a street vendor.
“I live on about 400,000 pesos a month ($210),” she says. “And I can sustain myself with that… pay for all my services, my rent. But I make a little bit more than that… I have to save a little to buy for the things I’m going to sell next month.”
Martha’s income of just over $6 per day puts her a good way from the edge of poverty, in what the World Bank considers the vulnerable class: those living on between $4 and $10 a day. Vulnerable technically means someone like Martha is in danger of slipping back into poverty for severe lack of financial security, but Martha says she is saving her income for the future.
The question is whether or not she’ll be able to advance beyond selling pirated copies of CDs and DVDs on Bogota’s streets. Martha says she has now re-established a dignity she never had during 23 years of poverty. But advancing beyond her world of informal jobs, she says, looks like an impossibility for being someone with no education. Instead, she’s putting her focus on her kids.
“I have some projects… I want to have my own home, but really I’m trying to get my kids ahead and put them on the best path,” says Ms. Osorio. “One of them wants to be a police officer.”
- Principales indicadores para el mercado laboral – Agosto (DANE)
- La tasa de desempleo para el mes de agosto se ubicó en 9.3% (La Republica)
- Despite slower growth Latin America nears historic unemployment lows (World Bank)
- The New Vulnerable Class in Latin America (CFI Blog)
- Little Book of Data 2013 (World Bank)