While the Venezuelan economy is giving indubitable signs of recovery in its Gross National Product (GNP), automobile sales, construction materials, and credit portfolio (among other goods and services), so is unemployment.

Although the most recent employment figures are not worth jumping for joy, they at least indicate that after a turbulent period like 2002-2003, things could get back to normal.

The National Institute of Statistics (INE), recently reported that the unemployment rate in Venezuela dropped to 15.3% in July 2004, in relation to the 18.3% registered for the same month in 2003; a three point difference can not be overlooked.

These figures are the result of a Home Sampling Survey, a multiple purpose statistical research carried out in Venezuela since 1967. The variables studied generate several indexes: unemployment rate, layoffs, and percentage of workers in the informal economy, among others.

The INE also reported that the July unemployment rate, 1.84 million, was similar to the 15.5% rate of last June.
The labor force in Venezuela, with a population of 25 million, is around 12 million. The concept of employment in Venezuela, includes people of either sex, over 15 years of age, who have claimed to be working or to have a job during the week before the survey.

The employment rate is understood as the percentage of the economically active (employable) population that is actually employed.

Elías Juri,president of the INE, explained that “we verified an increase of 409,350; mostly male(240,098), in the number of employed persons between July of 2003 and July 2004.”
He added that employment in the formal sector of the economy was 50.5% by the end of July,2004; 3.5% higher than in July of 2003.

For the INE, a person is employed in the formal sector of the economy when the company he works in, either in the private or in the public sector, has five or more employees.

This INE definition also includes freelance university professionals.
On the other hand, the informal sector registered 49.5% employment; a little more than 5 million people.
Workers in the informal sector are those who are employed in companies with fewer than five employees (including the employer), housekeepers, non graduate freelance workers (salesmen, craftsmen, drivers, painters, carpenters, street vendors, etc.), and family member assistants who work more than 15 hours a week.

As for the informal sector by occupational categories and gender, among the male population, there was a 43,910 decrease in the number of “employers” and a 23,645 diminution among those classified as “family member assistants and non remunerated non family members”. There were no significant changes in the female population.

This year, Venezuela, the world’s fifth largest oil exporter began to recover from two years of deep economic contraction (8.9% in 2002, and 7.6% in 2003), amid the political turbulence that lashed the country.
In the first semester of the year, the GNP increased 23.1%, in relation to the same period in 2003, when the country was going through the consequences of the entrepreneurial and oil strike in demand of president Chávez’ demission.

The government estimates that the economy will grow between 10% and 12%, and that unemployment could continue to drop, down to 12% by yearend, with the additional help of greater public expense in infrastructure and social plans.

Eljuri said in August that these figures would imply a 2.6% reduction in relation to the 14.6% rate, registered in December of 2003.
“There was a downward trend in the unemployment rate in the first semester of the year, with a 15.5% at the close of June.” ,he said.
“Expectations are that this figure will continue its decrease, and even reach 12% by December, as a result of the effect of the works being carried out nationwide.”, he added.
The country, that has just gone through a referendum that ratified Chávez in power until January of 2007, had one of its highest unemployment rates in its history, with almost 20% in March.

Labor unions associated to the oppositionist Confederation of Workers of Venezuela, claim that the unemployment rate is rounding the 20% figure, and accuse Chávez of having ruined the country, despite the fact that he’s counted on historical oil price rises for more than five years in his tenure as president.

The International Organization of Labor(OIT), estimated at the beginning of the year that unemployment in Latin America would reach 10% in 2004, slightly lower than in 2003, when 19 million people were jobless in this part of the world.

The OIT said that, since 1990, it has detected a systematic increase in employment under precarious conditions, that is, without any social protection, and under contract terms that facilitate layoffs during slow economic growth cycles, all of which lowers labor costs, but does not increase productivity. The 0.7% drop in unemployment in the region, estimated by the OIT for 2004, is based upon an expected 3.5% regional economic growth this year.

Published in Quantum No 30

Maitane Larrañaga