Million of Formal Jobs Lost in Coronavirus Lockdown in Colombia

The urban working population in May would be approximately 6.65 million people. That is 4.2 million fewer jobs than the previous year

297
The latest report from Bancolombia reveals a drop in formal payroll income in the country (EFE).

Spanish – The labor market report for April, presented by the National Administrative Department of Statistics, showed the repercussions of the lockdown and the fall in the price of oil on the Colombian economy: an unemployment rate of 19.8%.

In its latest Situation Analysis, Bancolombia, one of the country’s largest banks, shed light on how formal employment was affected. The information was collected using the number of payrolls paid through the bank’s transactional platform. The information confirms that the quarantine meant a large loss of formal employment in Colombia.

A downward trend in the annual variation of the formally employed population can be observed from March, the month in which the confinement began. In other words, people who work at a company registered with the Chamber of Commerce and Industry and contribute to the social security system.

The variation was -7 % in April and -12 % in the previous month. The biggest sectoral decline occurred during the month of May. The most affected sector was the mining sector, which saw a decline of 9% for April and reached 24% in May. The provision of professional services fell by 7% in April and by 15% in May.

Payroll income change on the Bancolombia platform (Bancolombia).

 

Trade and industry, the two largest employers in the country, saw a decline of 15% and 11% respectively compared to last year. Manufacturing had two periods of negative change: the first of 10% and the second of 12%.

The construction sector was particularly impacted as it represented one of the largest demands for unskilled labor. The payroll figure for construction fell the most among all sectors. In April, the decrease was the highest in the industry (-24%). Thanks to the gradual reactivation of its activities from the end of that month, its annual decline eased to 21% in May.

The report takes all sectoral information into account and estimates that the urban working population would be approximately 6.65 million people in May, or 4.2 million fewer jobs than in 2019.

Bancolombia estimates that despite the decline in activity and the sharp increase in the unemployment rate for May, the market shows signs of recovery after the resumption of operations by several sectors. A rapid recovery in employment (as is happening in the United States) is not expected due to the rigidity of the labor market in Colombia. However, lifting the quarantine could put a brake on the increase in unemployment in the country.

Subscribe free to our daily newsletter
Sign up here to get the latest news, updates and special reports delivered directly to your inbox.
You can unsubscribe at any time