This year the job market in Chile finally showed signs of weakness ass joblessness caught up to slower economic growth.
In recent years, despite dismal economic conditions striking Chile as a result of low copper prices and lack of investment, Chile’s job market remained impervious to the turmoil. This year, however, the first four months made sure unemployment caught up to the conditions of the market.
Unemployment went from 5.9% in February to 6.4% in April, and is expected to reach 7.5% by the end of the year.
Rising unemployment can only mean trouble for the Chilean economy, as it will have considerable impact on consumer demand.
Mario Marcel, of the Chilean central bank assured that the change does not come out of the blue, but is instead a delayed response to the economic downturn. “The labor market has been adjusting for a few months, the idea that the labor market was isolated from the economic cycle is not correct.” He said.
As jobs became harder to find, Chilean workers turned to self-employment, as street vendors and independent constructors, for example, not necessarily as start-up entrepreneurs. The change is not favorable, as these lines of work offer no benefits or social security.
Other estimates show a darker outlook for the Chilean job market, Universidad de Chile estimates the figure will escalate to 9.4% by the year’s halfway point.