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ECONOMY-ARGENTINA: Unemployment and Shortage of Skilled Workers Coexist

Marcela Valente

BUENOS AIRES, Apr 1 2011 (IPS) - Despite the fast growth of the Argentine economy, unemployment remains a tough nut to crack. While many areas face a dearth of skilled workers, a large number of unskilled workers find it impossible to land a job.

According to official figures, GDP grew 9.2 percent last year after the impact of the global financial crisis in 2009 cut short the high rate of economic growth – averaging more than seven percent a year since 2003 – in this South American country of 40 million.

In 2009, GDP grew just 0.9 percent. And while substantial improvement was forecast for 2010, last year’s growth ended up to be double the rate projected by the Economic Commission for Latin America and the Caribbean (ECLAC).

However, the labour market seems to be lagging, says an article on “the poor performance of the labour market in the face of economic recovery” published by the Centre for National Studies on Alternative Development (CENDA).

At the end of 2010, the National Institute of Statistics and Census (INDEC) reported that unemployment stood at 7.3 percent, nearly the same level as in late 2008, prior to the impact of the international crisis that broke out in the United States in mid-2008.

In 2010, official figures showed significant recovery of the Argentine economy after the effects of the global crisis had been felt, the CENDA article says. However, the dynamic growth had a weak impact on the labour market, it adds.

The analysts consulted by IPS said unemployment has declined steadily since late 2002, after Argentina’s economic and social meltdown, when unemployment climbed to 24 percent.

But they also expressed concern that the government’s economic policies are having a hard time bringing the unemployment rate down further and reaching the aim of full employment – the target set by the centre-left governments of the late Néstor Kirchner (2003-2007) and his widow and successor, President Cristina Fernández.

Economist Ernesto Kritz, director of SEL Consultores, a labour consultancy group, explained to IPS that while there is unmet demand for skilled labour, there is a large segment of the labour market that can’t find jobs.

“Most of the unemployed come from the informal economy and, even if employment were available, they would be unlikely to be hired,” he pointed out. “This has been the situation, without significant changes, since 2007.”

Kritz said the problem has become more acute in the last four years due to the increase in labour costs, which was not offset by rising productivity. His firm’s March bulletin reports that while wages are recovering, job creation is declining.

Wages have recovered since 2007 with respect to the rise in prices, but at the same time labour costs have gone up and the gap between pay and productivity is growing, which raises questions about the sustainability of wages, he said.

The expert said he worries that in order to confront the rise in costs, companies are restricting hiring. “You can see this not only in industry but everywhere: companies are getting by with the employees they have,” he said.

Claudio Flores, head of the human resources firm Agein, holds a similar view. “Unemployment has undoubtedly been going down since 2002, but not at the pace at which the economy is growing,” he said in an interview with IPS.

Requests from companies seeking skilled workers in chemistry, the oil industry, metal-working, mining, engineering and software development are piling up in Agein, but “there is no one available” to fill the posts, he said.

“In the area of computer systems alone, there are an estimated 50,000 available jobs, while at the same time there are a large number of unemployed people who don’t have the necessary skills, which is why there is no correlation between economic growth and unemployment levels,” he said.

The software industry is just one illustration of the situation in the labour market. There is basically zero unemployment in the sector, while a large pool of workers without training or skills is looking for jobs.

In the last six years, production in the software industry has grown nearly 280 percent and exports have increased, but there is a shortage of workers and companies are offering students work contracts even before they have completed their studies.