Economy & Trade, Headlines, Labour, Latin America & the Caribbean

ARGENTINA: Unemployment Declining at Two Different Speeds

Marcela Valente

BUENOS AIRES, Mar 12 2008 (IPS) - Argentine companies are competing for professionals and technically skilled employees, and are even hiring students who have not yet graduated, as demand for qualified workers exceeds supply. But the reverse is true among less-skilled workers.

Six years after the unemployment rate soared to over 20 percent in the wake of the worst economic crash in Argentine history, unemployment fell to 7.5 percent by late 2007, and the rate is expected to continue to drop this year, according to the National Institute of Statistics and Censuses.

The downward trend suggests that the country is coming close to achieving full employment, which experts say would be reflected by a structural unemployment rate (due to mismatch of location or skills of workers and jobs available) of between three and six percent. However, they warn that the average index hides problems that would invalidate such a conclusion.

“In the formal economy, full employment has already been reached,” sociologist Ernesto Kritz of SEL Consultores, a labour consultancy, told IPS. “The problem is with people working in the informal economy, where unemployment currently stands at around 15 percent.”

Carlos Fontana is 54 years old and has not worked in the last five years. He had a small service business which he was forced to close down, and since then he has been looking for paid work, without success. “The problem is my age,” he told IPS. But Fontana also lacks a high school diploma and has next to no computer skills.

Kritz said that even among people who are better positioned in terms of labour skills, those whose last employment was in the informal economy – that is, not registered for tax purposes nor for making social security contributions – are having a much harder time finding a job.

The experts who spoke to IPS agreed that unemployment has fallen significantly in the last few years. In the first quarter of 2003, the unemployment rate was 20.4 percent if people on unemployment subsidies were counted as employed. But if these people were excluded from the employment statistics, the unemployment rate stood at 26.6 percent.

Far fewer people are now receiving unemployment subsidies, and those who do receive them have been transferred to programmes that require the beneficiary to carry out some work in exchange.

And if those enrolled in such programmes are counted as unemployed, the current unemployment rate rises from 7.5 percent to just 8.1 percent.

“We estimate that by the end of 2008, the open unemployment rate will be 6.2 percent, close to the figure indicating full employment,” Marina Dal Poggetto, an economist at Estudio Bein, told IPS. That figure is very close to the average unemployment rate during the 1970s, when full employment was in fact reached.

However, she acknowledged that unemployment is falling at two clearly distinct speeds, because of the new demands of the labour market and the disparities in the labour supply. While some workers are highly qualified, others have low skills and qualifications.

“In some industrial sectors labour supply cannot meet demand, and companies are headhunting workers from each other, but apart from this, there is a pool of poorly qualified workers who have great difficulty finding jobs,” she said.

This is what Claudio Flores, head of the human resources firm Agein, sees every day. Companies come to his office looking for employees after searching fruitlessly in other firms, and they often leave without finding what they need.

“There is unmet demand that has remained constant for nearly two years, and is even increasing in some sectors. But I don’t think that one can say, because of this, that there is full employment, because we also see many people coming in over and over again, who are not finding jobs,” he remarked.

“When we advertise vacancies, we get far fewer applications than we did during the years of economic crisis, but they are from people who don’t have the right qualifications. These people are going around in circles. They lack educational qualifications, experience, or do not fit the profile of the candidates being sought,” he said.

Two years ago, the greatest demand was for workers to participate in the recovery of local industries. Technicians, heads of industrial plants, and professionals in the chemical, mechanical engineering, metallurgical, automotive, paper, textile, rubber, plastic or leather industries were sought after in great numbers. Companies were even offering jobs to students in the final years of their studies in technical schools.

Now the most sought-after workers are people who work with systems (systems analysts and developers, computer engineers, software programmers), marketing (business administrators, sales personnel, accountants), industrial and electromechanical engineering, and human resources specialists.

Some of the available applicants have professional qualifications, but need to upgrade their skills in order to become competent users of new technology. Others have been out of the labour market for too long, lack the right qualifications, have an employment record of moving frequently from job to job, or demand such high salaries that they exclude themselves from consideration, Flores said.

Dal Poggetto and Flores were both in agreement that with improved training and a better targeted job search, many unemployed people could gradually enter the labour market. However, that is not what is happening today.

“At the moment, we find 80 percent of the employees that companies have requested in other firms,” so that they are switching between similar jobs, said Flores, who added that “a much lower percentage of unemployed people are managing to get back into the labour market.”

Meanwhile, Argentine President Cristina Fernández reaffirmed her government’s economic model and stated its goals of cutting unemployment to five percent by 2010, and the poverty level to less than 10 percent.

“For the first time in 100 years, we have had five uninterrupted years of economic growth at rates of over four or five percent. If we grow again this year, we will have achieved the longest period of growth in our country’s history,” the president said at the Mar. 1 inauguration of the 2008 session of congress.