As the duration of the measures of confinement, the negative effects on the functioning of the economy worsen. On an intuitive level, the signs of the drop in activity can be read in closed establishments, in the acquaintance who fears losing their job, or in the proliferation of home businesses that are set up to get by.
But to know the effects of confinement on the economy, it is necessary to have a set of statistics that are general enough not to be focused on our immediate experience, and that have nothing to do with people who are in another situation. In that sense, the statistical information available is relatively little, due to the natural delays in its publication.
From the set of indicators collected by INDEC, industrial production shows a drop of 33,5% year-on-year in the month of April. Something similar occurs with the Monthly Economic Activity Estimator (EMAE), which registered a drop of 11,5% in March. Regarding the labor marketIn March alone, 117.940 formal jobs were destroyed compared to February. This implied a drop of 1,7% compared to the same month of the previous year.
The report that we have prepared in this edition goes a step back to ask what was the point prior to the implementation of quarantine measures, and that allows for a diagnosis of the economic situation of the population, especially with regard to the labor market and income distribution. In this note, we show a very brief summary of the general situation in Argentina and Greater Rosario, at the beginning of 2020.
Argentina
At the end of the IV quarter of 2019, the Argentine economy was unable to break the unfavorable situation recorded in previous periods. Although there were signs of a very slight improvement with respect to the rate of unemployment, it ended up registering a level of 8,9%. Furthermore, the observation must be qualified by an increase in pressure on the labor market, which turned out to be more than proportional to the fall in the unemployment rate.
Correspondingly, the activity and employment rates also register slight positive corrections for the same period, but with differences of no more than one percentage point year-on-year. Thus, the activity rate was 47,2%, while the employment rate registered a level of 43%.
When the population is analyzed by education levelIn general, higher levels of education are associated with a higher level of activity and employment, lower levels of unemployment rates and job seekers; as well as a greater proportion in formal jobs.
A synthetic measure that allows us to relate education, income level and labor market behavior is the salary premium, understood as the salary differential by educational level. At the beginning of 2020, this indicator shows signs of greater inequality. The two educational segments with the highest income level, university and complete tertiary, had been showing a gradual drop in the average of their premiums, but they returned to relatively high values at the beginning of 2020.
Is there a correlation between the greater differentiation of salaries by educational level with some measure of inequality? Everything seems to indicate that there is a relationship, but of a weak magnitude. The Gini coefficient for Argentina registers a value of 0,4365 in the IV quarter of 2019. That is, 1,02% higher than that registered in the previous year. Basically, in the pre-pandemic scenario, greater inequality is recorded, but derived from an extremely slight increase in year-on-year terms.
Gran Rosario Chipboard
In general terms, the AGR shows similar movements to those of the national aggregate, only that the levels presented by the indicators are better in comparative terms. In this regard, the AGR presented a pressure on the labor market of 28%, composed of an open unemployment rate practically similar to that of the national aggregate. The activity rate registered a level of 46,2%, while the employment rate was 42,2%.
Gran Rosario presents a particularity with respect to the national level with regard to the distribution of the unemployment rate by age group: the largest number of unemployed They concentrate on the youth and young adult segment. Given that first job searches are concentrated in this group, it is likely that the post-pandemic scenario will strongly affect this sector.
The above becomes more relevant when the population is analyzed by educational leveleither. Gran Rosario has a labor market with greater segmentation between professionals and non-professionals. For example, the employment rate of university students registers a ratio of 80,9%, while in the national aggregate it shows a value of 77,7%. However, the proportion of the population with a low educational level is approximately 26%, while at the national level it is 23%.
Is there a direct relationship between the composition of the population by educational level and the level of distribution? Apparently not. The Gini coefficient of the AGR is the lowest of the selection of agglomerates in this work, registering a level of 0,3996 in the IV quarter of 2019, which indicates that there is a lower concentration of income in said district.
How can both observations occur simultaneously? A plausible explanation is that the average per capita family income It is relatively low compared to other agglomerates. Measured in real terms, it was $15.230,66; while in the national aggregate the registered average was $16.564,24 in the same period.
In short, the pre-pandemic scenario finds the AGR in a situation of greater relative equality, a lower average level of salaries, and an employment rate above the national average; but with a potential problem regarding the employability possibilities of its young population.
Thoughtful and final
The reactivation after the pandemic will be something totally unprecedented in history, and for which no manuals have been written, or if they exist, they have not been read. All economies have been affected to a greater or lesser extent. So this is not a localized crisis. The effects The most visible aspects of the quarantine have to do with the disconnection from economic activity. However, the installed capacity and the possibility of producing remain intact in many sectors and, therefore, the possibility of recovering the supply. As expectations adjust to the future outlook, demand will resume its pace.
For the moment, the creation of new job positions, has been postponed and reduced. The sectors of the population that were unemployed or employed in the informal sector and seeking to become formalized, will see their situation prolonged. Who does it affect? This group has a strong component of youth and young adults, with low qualifications. And conditions get worse when controlling for gender.
In this context, households with unmet basic needs They are the most vulnerable. Because? Because this segment of the population is - generally - made up of a majority of young, low-skilled people. Therefore, it is expected that income concentration will increase, and state assistance programs will be necessary to avoid expanding the hard core of poverty.
It is difficult to make a statement about the sectors and workers directly affected. Everything will depend on the ability of families and companies to cover the shortfalls, whether by liquidating savings or liquidating capital. And, of course, the effective state capacity to help alleviate the problem. In any case, an increase in unemployment is to be expected in the short term.