Peru has one million more informal workers than before the pandemic

Over 17 million people work in Peru, but most of them work in informalityThis is reported by the National Institute of Statistics and Informatics (INEI). This indicates that the country’s labor market has not yet recovered.

While President Pedro Castillo assured last month that pre-pandemic employment levels had already recovered, the claim is misleading, according to Antonio Castillo, manager of the National Society of Industry’s Economic Research Institute.

“To say that employment in Peru has generally recovered is not entirely true. Work Formally, yes, it has increased and we have grown by 2.9% by June, however this figure hides a situation in which there are people who work less than 35 hours and earn less than the minimum wage, ”said the SNI representative. .

Of the total workers in Peru, only 23.9% are formal and 76.1% are informal.

For the Foreign Trade Society of Peru, this figure means a pullback labor market at a level not seen since 2012, but what does the fact that nearly eight out of 10 employees in Peru mean are informal?

“The number of informal workers has increased to nearly 13 million jobs across the country. Informality involves sacrificing the benefits of the formal system in order to continue generating income. wages, and there is no mandatory recognition of benefits such as working up to 48 hours a week, participation in the health care system or pensions, among other aspects, ”explained Daniel Najarro, an analyst at Comex Economic Studies.

Until the middle of the year, it is clear that 1 million 54 thousand workers more than in 2019, and at least in urban areas, INEI indicates that informal activities affect women more as it affects 74.1% of working women.

Another group hard hit by the lack of employment opportunities are those under 25, as almost nine out of every ten young people with jobs are informal. but why is this group so affected?

“On the one hand, these are those who have just completed their studies, they do not have much experience and training. Lack of experience means they don’t have the opportunity. Business and the country’s institutions do not receive incentives from the government, as in other countries, they do not have public policies to stimulate youth employment,” said Maria José Gomez, director of the Forge Foundation.

Specialists warn that private investment is an important part of creating formal employment, but recent business forecasts are disappointing.

The latest data from the Central Reserve Bank (BCR) show that due to political uncertainty companies’ hiring expectations for the next three months are pessimistic, which further contributes to the precarious situation in the national labor market.