labor market
I. Changes in principal employment variables
According to the results of the Permanent Household Survey (PHS) carried out in October 1999 the unemployment rate, measured in terms of the rate of unemployment among the economically active population, averaged 13.8% in the 28 urban conglomerates forming the basis for the survey. This level is lower than that recorded in August last, although higher than that for October 1998 (12.4%). A year-on-year increase in unemployment has been recorded in both Greater Buenos Aires, where the rate went up from 13.3% in October 1998 to 14.4% in October last, and in the centers in the interior of the country, where the rate went up from 11.3% to 12.8% (Table 3.1).
The rate of employment in the conglomerates, which measures the proportion of the urban population in employment, declined very slightly from 36.9% in October 1998 to 36.8% in the latest survey. In the Greater Buenos Aires region the rate of employment remained at the same level as in October 1998, while in the conglomerates in the interior of the country this rate has fallen slightly. If the current rate of employment is compared to that existing in August 1999 a slight increase can be observed, although over the last seven surveys the rate has remained very stable at between 36% and 37% of the total population.
The activity rate, which measures the percentage of the urban population that is economically active, has on the other hand recorded a slight year-on-year increase, rising from 42.1% in October 1998 to 42.7% in October this year. The increase in this indicator was recorded both in the Greater Buenos Aires region and in the conglomerates in the interior of the country.
When the two latest October surveys are compared there can be seen to have been an increase in the rate of underemployment involving those seeking additional work (demanding underemployed) while in the case of those not seeking another job (non-demanding underemployed) the underemployment rate is similar to that existing 12 months previously (table A.3.1 of the Statistical Supplement). table 3.2 shows the unemployment and employment rates for each of the urban conglomerates surveyed by the PHS.
II. Development of the Urban Population based on situation in the labor market
Table 3.3 shows an estimate of the evolution of urban population, the economically active urban population, and within this category the employed and unemployed population. The date of this estimate coincides with the months when the populations activity status was measured in the areas where the permanent household surveys are performed
1 .The series shown begin in April 1980 and run to October 1999, the date of the last PHS, and include Greater Buenos Aires (GBA), the 24 urban conglomerates covered by the PHS during the whole period and the rest of the urban locations in Argentina.
2 Activity and unemployment rates used in the estimates have been prepared by the INDEC. In the case of the "urban remainder" the average activity and unemployment rates for the 24 urban conglomerates surveyed by the PHS have been applied.3According to this information, in October 1999 the economically active urban population totaled 13,705 thousand, of whom 11,871 thousand were employed, and 1,833 thousand were urban unemployed.
In the case of the level of employment it is interesting to note that between October 1998 and October 1999, a period during which the country experienced a severe recession, the number of urban employed rose by 201 thousand. As during the same period the number of those economically active went up by 437 thousand, most were unable to find employment and became added to the number of unemployed, which was 235 thousand higher than one year previously.
II.1. Changes in the Economically Active Population in Conglomerates in the Interior
The application of the results of the Permanent Household Survey (PHS) carried out in October 1999 to urban population projections reveal significant discrepancies between the pattern for Greater Buenos Aires and the urban centers in the interior surveyed by the PHS.
For the first time this decade the most notable changes were to be found in the conglomerates in the interior.
The relative stability of the labor force participation rate (38.1% and 38.6% in 1998 and 1999, respectively) applied to a total population that increased 2.3% has implied growth in the supply of labor of more than 134 thousand (3.6% year-on-year). In other words, the supply of labor rose 1.3% more than the population of the conglomerates as a whole.
If consideration is given to the relationship between the change in the supply of labor and changes in the population, the conglomerates have performed in an uneven manner. The following three types of situation can be identified:
In a context in which participation in the labor market has exceeded the natural rate of growth, there have been some cities where this ratio was higher than the average for all conglomerates. These cities are Catamarca, Mendoza, Resistencia, Paraná, Santiago del Estero, Salta, Río Gallegos, La Rioja, Córdoba, Tucumán, Neuquén, San Salvador de Jujuy and Rosario (Table 3.4).
Although in most of these conglomerates the number of those employed has grown at a faster rate than the number of unemployed, the size of the growth in the supply of labor in each conglomerate has not been determined by the same factors. In particular, some special situations can be pinpointed:
Río Gallegos records a net fall in the number of unemployed, so that the additional increment is due exclusively to a rise in the number of those employed.
In Greater Rosario there has been a net fall in employment, so that the increase in employed workers has been lower than that in the number of unemployed.
Greater Catamarca and Greater Salta have recorded a similar rise for both employed and unemployed.
In Paraná and Santiago del Estero the increase in the number of unemployed has been greater than the increase in the number of employed.
There is a second group of cities showing falls of varying magnitude in the ratio of changes in supply and changes in their population (Table 3.5). Such cities record two types of behavior:
In San Luis, Posadas, Santa Rosa, Comodoro Rivadavia, Santa Fe and Corrientes there has been an increase in employment that has not been sufficient to absorb the increase in population.
In Bahía Blanca, La Plata, Formosa and Ushuaia-Río Grande on the other hand there has been a net drop in the supply of labor which in all cases coincide with net job losses.
Lastly, in Greater San Juan there has been an increase in the number of employed similar in size to the natural rate of growth. In this instance the increase in the number of unemployed was such that it absorbed a net loss of jobs.
III. Job and Compensation Indicators (Integrated System of Retirement and Pension Benefits). Third Quarter of 1999
The basic information used to prepare the statistical series presented in this section is taken from the returns filed by companies with the Integrated System of Retirement and Pension Benefits
4 (SIJP).In the third quarter of 1999 the monthly average number of jobs declared was 4,408,000 for the total of the Integrated System, 1.9% less than the number recorded in the same quarter of the previous year. Average remuneration for the period amounted to $ 866 (an increase of 2.1% compared to the previous year).
Goods-producing sectors reported a monthly average of 1,419,000 jobs declared (-8.5% in relation to 1998) with an average remuneration of $ 836, while service sectors reported 2,750,000 jobs (-3.3%) with an average wage of $ 882, (a rise of 3.1%).
Comparing these figures with those for 1995 (the first year in which information became available for the third quarter) the increase in the number of jobs declared has been 22.3%, while average remuneration has risen slightly (approximately 1%). This increase in employment has mainly taken place in the service-producing sector, where the number of jobs has risen by 25.8% over the same period, against 9.8% in the case of goods-producing sectors.
It should however be borne in mind that the series used until 1997 includes the steady incorporation of government workers that had been affiliated to provincial welfare funds transferred to the Nation
5 .As from 1996 the SIJP has recorded salaried workers in the agriculture sector previously covered by the Union Joint Responsibility Agreements. For this reason the Statistical Supplement shows information for a uniform sub-group since the introduction of the National System which is denominated "Private non-agricultural".
Table 3.6Evolution by sector of Economic Activity
Table 3.7 shows the year-on-year change of jobs declared and average earnings by sector of economic activity. These indicators have performed differently depending on whether activity was in the goods-producing or service sector.
In the goods producing sector the sharpest falls have been recorded by Fishing and in Manufacturing Industry. In the case of Fishing, restrictions on hake fishing have been extended, with an impact on the provinces involved.
Job losses in the fishing industry (-11.6%) have been less than the loss of added value recorded by the sector (-41.7%), while in industry job loss (-10.6%) has been greater than the loss in industrial output.
Jobs in the service sector, however, have had a more erratic performance, as in the case of Financial Intermediation and Real Estate, Business and Rental Services gains have been in excess of 3%. On the other hand, the sharpest decline has been recorded in Social Services, Health and Private Education (-8.3%) and Hotels and Restaurants (-7.5%).
Geographical jurisdiction
Between the third quarter of 1998 and the same period of 1999 jobs declared were lower for most jurisdictions nationwide, as can be seen from table 3.8.
Rises were recorded in Catamarca (18.7%), Tierra del Fuego (8.2%), Jujuy (3.3%) and the City of Buenos Aires (2.3%).
In each of these provinces the situation differed depending on the sector of activity:
In Catamarca, Agriculture, Livestock, Hunting and Forestry and Fishing and Related Services account for somewhat more than 30% of the change in employment. This can be explained by the introduction of tax deferral schemes that have had an impact on the area planted with certain regional products such as olives.
In Tierra del Fuego, over 38% is accounted for by the behavior of the construction sector.
The net increase in jobs declared by the private sector in Jujuy has been over 2,200, the result of 2,000 job losses declared by the private sector and a gain in public sector employment of almost 4,300.
In the City of Buenos Aires job increases were spread over various sectors, acquiring significance only in the case of Real Estate, Business and Rental Services (14%).
The provinces most affected by the reduction in the number of jobs declared have been Chaco (-17.9%), Santa Cruz (-16.4%), Formosa (-12.0%) and Chubut (-11.2%).
The situation has differed according to jurisdiction:
In Chaco, 22.6% of the drop in employment has been due to the performance of the Agriculture, Livestock, Hunting and Forestry sector, affected by the fall in cotton production.
In Santa Cruz, 22% of the job loss reported has been due to the performance of the Fishing and Related Services sector. It should be noted that in 1998 the fishing sector accounted for 20% of jobs declared nationwide, a proportion that has fallen to 10% in 1999.
In Formosa, 38.4% has been accounted for by changes in the level of employment in the Construction sector.
In Chubut, 36.5% has been due to the behavior of the Construction sector.
IV. Poverty Indicators in Greater Buenos Aires
This section includes data on poverty in Greater Buenos Aires from May 1998 to May 1999
6 .According to the poverty line approach 19.1% of households in the Greater Buenos Aires area, which includes the City of Buenos Aires and the Buenos Aires urban districts, were below the poverty line in May 1999 (1.4 percentage points more than in the previous survey in May 1998). In response to the tequila crisis poverty level indicators reached their highest values since the introduction of the economic reforms in 1991 in October 1996 (20.1%). Since then, in line with the rise in economic activity, poverty began to decline, affecting 18.8% of homes in May 1997 and 17.7% of homes in May 1998, although this decline was subsequently reversed. As regards the population of the Conglomerate, in May 1999 27.1% were below the poverty line, an increase of 2.8% compared to the survey in May of the previous year (see table 3.9).
In May 1999 the number of households below the indigence line reached 5.4%, 1.4 percentage points higher than in May 1998. In the May 1999 survey it was determined that 7.6% of the population of the conglomerate was below the indigence line, an increase of 2.3 percentage points compared to the survey in May the previous year (Table 3.10).
With respect to the geographical distribution of poverty, taking into account only the districts of Greater Buenos Aires, from May to May there has been an increase of 1.4 percentage points, with poor households accounting for 23.7% in May 1998 and 25.1% in May 1999. If poverty levels at inhabitant level are considered, there has been an increase of 2.7 percentage points, rising from 30.3% to 33% between the same dates. In the case of the number of households below the level of indigence, in the Greater Buenos Aires area a rise of 2.1 percentage points has been recorded between May 1998 and May 1999, which rises to 3% in the case of the size of the indigent population.
If only "Greater Buenos Aires 2"
7 is considered, 30.6% of households were below the line of poverty in May 1999, almost unchanged from the same month of the previous year (30.5%), while in the case of the population, the change between the two surveys has been one percentage point (38.5% and 37.5% respectively). The number of indigent households increased by 2 percentage points between May 1998 and May 1999. The indigent population has increased by three percentage points between surveys.The results for the May 1999 survey confirm a profile for households measured as poor that differs from that for households classified as being above the poverty level. Poor households have on average almost 2 persons more than the non-poor households, with a greater average of minors under the age of 14 and adolescents in poor households. There are also more adolescents in poor households. This results in a greater number of dependent minors and adolescents per adult and a greater number of non-workers.
In poor households there is an average of one worker (compared to 1.3 in non-poor households), 0.5 unemployed (compared to 0.2 in non-poor households) and 1.3 earners (1.7 in non-poor households).
From the point of view of household composition, although there is a predominance of complete family nuclei in poor households there is an increased number of extended families, while single person households diminish.
One of every four poor households is headed by a woman, a slightly lower proportion than in non-poor households.
Regarding the level of education attained by households, the weight of those not having completed secondary education is more than twice that of non-poor households. The number of those not having completed their secondary education is higher among poor homes (33% compared to 23.6%). However, two out of three poor adolescents attend an educational establishment (70.2%), a proportion that is somewhat lower than in non-poor households (75.8%), although this proportion falls to one in ten in the case of young persons between the age of 20 and 24 (compared to four out of ten in non-poor households).
The labor force participation rate for the heads of poor households is 81.4% (higher than that of non-poor households, where the rate is 73%). That of poor spouses is 33.2% (much lower than the 48% on non-poor spouses).
On the other hand however, unemployment reaches 26.5% of poor household heads (and 6.9% of non-poor household heads), 29.2% of poor spouses (compared to 11.6%) and 53.3% of poor young persons aged between 20 and 24 (compared to 20.2% of non-poor).
Table 3.101 These figures contain margins of error similar to those published by the INDEC for this Survey.
2 As from October 1995 PHS information has been available for Concordia, Mar del Plata and Río Cuarto. However, it was decided to continue to use the same urban conglomerates that were reported on previously as this classification into 24 conglomerates in the provinces and the urban remainder is the only one that can be sustained for the entire period under consideration.
3 This convention has been adopted because of the notorious differences that exist between the localities making up the urban remainder and the Greater Buenos Aires, and has been corroborated by the census results that indicate that the urban remainder has features similar to those of the conglomerates in the interior surveyed by the PHS.
4 A description of the SIJP was published in Economic Report No.16 in April 1996, and the retrospective series by geographical jurisdiction and sector of activity are shown in the Statistical Supplement.
5 These were the funds of the city of Buenos Aires and the provinces of Catamarca, Jujuy, La Rioja, Mendoza, Río Negro, Salta, San Juan, San Luis, Santiago del Estero and Tucumán.
6 As mentioned before, information from the Permanent Household Survey is influenced by a large percentage of income underreporting by the households surveyed. However, this information is useful to understand changes in poverty over time.
The poverty line refers to the share of households and persons whose income in the PHS is below the line of poverty and indigence. The line of indigence is the value of a family shopping basket containing goods able to adequately satisfy nutritional needs at a minimum cost. The poverty line is the line of indigence plus the value of a group of non-food goods and services consumed by households assumed to be the closest to the of poverty line based on the data provided by the Survey of Household Income and Expenses. The poverty line is calculated based on the differential consumption of the household members according to their age and gender, taking an adult male as the unit of consumption.
7 "Greater Buenos Aires 2" is the second industrial belt and is made up by the Almirante Brown, Berazategui, Esteban Echeverría, General Sarmiento, Florencio Varela, La Matanza, Merlo, Moreno, San Fernando and Tigre jurisdictions. These jurisdictions recorded the highest poverty rates and were the most recently developed.
Back