Argentina’s unemployment rate rose by 0.9 percent inter-annual in the second quarter of 2018, hitting 9.6 percent, according to the latest report released by the Indec statistics agency on Thursday.
The figure represents roughly 250,000 new people who are unable to find employment and is the highest rate of the Macri administration so far. It is also the highest rate for the second quarter of the year since 2006 (it’s impossible to compare with data from when the Indec was taken over by former Domestic Trade Secretary Guillermo Moreno, since it stopped producing reliable statistics).
It is fair to make this distinction because, besides the general state of the economy, the market’s demand fluctuates throughout the year depending on the seasons and the existence of more temporary jobs.
Rather than the destruction of employment, the increase in the rate answers mostly to the fact that people entering the job market are unable to get one. In fact, the employment rate increased by 0.4 percent, from 41.5 to 41.9. These 400,000 people, however, were either hired to work on the informal side of the economy (89,000) or became self-employed (312,000). The formal side of the economy, in contrast, lost almost 3,000 jobs.
En consecuencia, el mercado laboral hoy es más precario. En el 2do trimestre de 2017, de cada 100 trabajadores, 50 eran asalariados en blanco. Un año más tarde, esa cifra cayó a 49. pic.twitter.com/tKr2bIsmj6
— Daniel Schteingart (@danyscht) September 20, 2018
This last chart illustrates the variation of the Argentine market between the second quarters of 2017 and 2018. The blue part represents those on the formal side of the economy, the orange part the ones on the informal one, while the grey part represents self-employed people.
Overall, the number of people unemployed rose from 1,258,000 to 1,850,000 people, if we are to extrapolate the Indec’s data to the entire urban population – the agency surveys 31 urban centers across the country – and close to 2 million if we add those living in rural areas. Moreover, the under-employment rate – that is, people working 35 or less hours a week and who are willing to work more – rose from 6.8 to 7.7 percent inter-annual, meaning that overall, 17.3 percent of the economically active population in Argentina has employment issues.
This figure increases substantially if we add the people who are employed but nonetheless are actively looking to change jobs: they represent 16 percent of the survey, compared to 15.3 percent in the first quarter of the year. Overall, then, a third of the Argentine jobs market is unsatisfied with their current employment situation.
The situation is set to worsen in the next reports, as they will include the negative effects in the real economy that the run on the peso and the sharp devaluation in Argentina went through, especially during the third quarter of the year.