BASIC PRIMARLY INFO.
What is it?
"When persons above a specified age are not in paid employment or self-employment and are currently available for work during the reference period."
-Organisation for Economic Co-operation and Development
To which kind of people is refered this therm?
To people who doesn´t have a job, and have a very unestable charge.
What are the main causes?
-The lack of competent companies in the country
-the arrival of immigrants
-lack of employment charges
-The advance of the technology
What are the main consecuences?
The political decisions, the expending public funds in efforts to stimulate the economy, economic output plummets as fewer people work and lose the ability to purchase goods and services, sleeplessness, anxiety and depression are constant companions for many out-of-work people, especially among men, self-esteem also plummets, particularly among men with little or no family support, children become depressed, often absorbing much more of the gloom and negativity of the parents than may be imagined, enormous stress, short financial resources for a home, deterioration of family ties for the constantly fights for change the way to get the bassic ressources, physical abuse of an unemployed man toward his children and wife and social breakdowns
https://www.sapling.com/7762708/effects-unemployment
Which are the ways to solve this problem?
•Ensuring political stability.
• Enhancing the educational standards.
• Control of population growth in the nation.
• Launch of new empowerment programs.
• Encouraging self-employment/ entrepreneurship.
• Ensuring access to basic education.
• Reducing the age of retirement.
• Avoid laziness.
https://content.wisestep.com/solve-unemployment-country-best-tips/
What do we think?
Our very smart staff, thinks that the unemployment is a very big problem for the society because it not only decrease the economical delpoment and the productiveness of a country it als deteriorates the relationships with the unemployed and the family and friends, generates more mental, physical and emotional problems and also brings social problems. So it's a very delicate issue that brings more consequences that we think and ruined families and lifes of thousands of people around the world.
-the arrival of immigrants
-lack of employment charges
-The advance of the technology
- fewer
jobs than applicants.
-
Competition in particular industries or companies can also cause the unemployment
-The
reduced mobility between sectors.
-The
submerged economy
-Very
Expensive products, which causes that few people buy there, and people losses
their job.
-Few stores
or places to workWhat are the main consecuences?
The political decisions, the expending public funds in efforts to stimulate the economy, economic output plummets as fewer people work and lose the ability to purchase goods and services, sleeplessness, anxiety and depression are constant companions for many out-of-work people, especially among men, self-esteem also plummets, particularly among men with little or no family support, children become depressed, often absorbing much more of the gloom and negativity of the parents than may be imagined, enormous stress, short financial resources for a home, deterioration of family ties for the constantly fights for change the way to get the bassic ressources, physical abuse of an unemployed man toward his children and wife and social breakdowns
https://www.sapling.com/7762708/effects-unemployment
Which are the ways to solve this problem?
•Ensuring political stability.
• Enhancing the educational standards.
• Control of population growth in the nation.
• Launch of new empowerment programs.
• Encouraging self-employment/ entrepreneurship.
• Ensuring access to basic education.
• Reducing the age of retirement.
• Avoid laziness.
https://content.wisestep.com/solve-unemployment-country-best-tips/
What do we think?
Our very smart staff, thinks that the unemployment is a very big problem for the society because it not only decrease the economical delpoment and the productiveness of a country it als deteriorates the relationships with the unemployed and the family and friends, generates more mental, physical and emotional problems and also brings social problems. So it's a very delicate issue that brings more consequences that we think and ruined families and lifes of thousands of people around the world.
Our Staff: Jacobo Pico, David Velilla, Antonio Jauregui, Pablo Gomez, Julian Perez
NEWS
1. Breaking with history: Why Colombia needs a more progressive tax system
December 17, 2012
This page in: English Español
Lars Christian Moller
Colombia Reports
Colombia is the seventh most unequal country in the world. Inequality here is very similar to countries such as Haiti, Angola and South Africa. The administration of President Juan Manuel Santos is uncomfortable about this and has taken a number of steps to reduce inequality, including a recent tax reform proposal.
Gini coefficient of income, country ranking
Why is the Administration right to be concerned about high income inequality? The first reason is democratic. Ordinary Colombians express concern about the high inequality they see every day and believe that it is the Government’s job to deal with it. Close to 85 percent of the population finds the income distribution unfair. More than 70 percent of Colombians believe that the Government should implement firm policies to reduce inequality, according to the 2010 LAPOP survey carried out by the University of Vanderbilt.
The second reason is poverty. While it is on the decline in Colombia, progress could have been much faster with a less unequal income distribution. Income poverty fell from 47.7 percent in 2003 to 34.1 percent in 2011. Poverty fell exclusively as a result of income growth as income inequality remained largely unchanged: the Gini coefficient was 0.55 in 2011 – the same as in 2003.Our calculations show that if Colombia had the same income distribution as Peru, poverty would have been ten percentage points lower than it is today, i.e. around 25 percent.
The third reason is stability. High inequality can be a source of distributive conflict and social tension. This tends to undermine the legitimacy of policies and institutions as well as their stability, and in particular weaken property rights, thus discouraging investment and thereby growth. While the decade long conflict in Colombia has many roots, most observers agree that the perception of inequality is an important factor.
Why is income inequality so high in Colombia? Since labor income is the largest component of household income, the performance of the labor market is critical in understanding income inequality. Colombia has the highest level of unemployment in Latin America (still above ten percent despite a healthy economy) and this contributes to inequality as the unemployed have lower incomes than the employed. Moreover, the labor market is segmented between formal and informal workers generating further income discrepancies.
" The personal income tax system in Colombia is regressive. This means that the richer you are, the lower is your tax effective rate. The Government proposes to overcome this problem by introducing a progressive tax system, i.e. to let the richer households pay a relatively higher effective tax rate. "
Lars Christian Moller
World Bank's Senior Country Economist for Colombia
Informality and unemployment are complex issues which economists grapple to understand. There is no doubt, however, that employers apply some economic logic when deciding to hire and fire workers. Few employers would hire a new worker if the expected extra earnings of doing so are lower than the wage. Formal labor in Colombia is very expensive for two reasons. First, because of the minimum wage which is equivalent to more than 70 percent of the average wage. Second, because of the high non-wage labor cost that the employer pays (amounting to 45 percent of the labor cost). Both are among the highest in the world, according to the OECD.
Bringing down the cost of formal labor, as proposed in the current tax reform, should therefore help reduce informality and unemployment, and therefore inequality. Employer contributions to SENA (a training institute), ICBF (a family welfare program) and health insurance will now be financed from a new equity tax (known as CREE) levied on firm profits and the Government has guaranteed full financing of these programs. Lowering the cost of formal labor, however, is not the only necessary remedy. Worker skills are equally important. High-skilled workers are attractive to firms because hiring them can increase profits. The other major challenge, therefore, relates to improving Colombia’s education and vocational training systems to ensure that workers become even more productive.
Colombia aspires to join the OECD. As mentioned by President Juan Manuel Santos, the OECD is a club of ‘good practices’. OECD countries have levels of income inequality that are considerably lower than in Colombia. These countries use their tax and transfer system effectively to achieve such results. They do so by taxing the rich households relatively more than the poor and by implementing monetary transfers to low-income households. Take the example of the United Kingdom. The distribution of incomes generated by the market is very similar to Colombia. However, when considering the effect of taxes and transfers, the United Kingdom has reduced inequality by 16 points on the Gini scale, while government intervention has no impact on inequality in Colombia.
Income equality before and after government intervention
The personal income tax system in Colombia is regressive. This means that the richer you are, the lower is your tax effective rate. The Government proposes to overcome this problem by introducing a progressive tax system, i.e. to let the richer households pay a relatively higher effective tax rate. The World Bank estimates that this intervention (known as the IMAN, or alternative minimum income tax) could potentially reduce the Gini coefficient by up to 2 points. This could bring inequality in Colombia to the level of Brazil – a country which used to be highly unequal, but which has reduced inequality substantially over the past decade. Achieving this goal, of course, requires appropriate implementation to ensure that taxes are collected as intended.
To reduce inequality further, Colombia could also consider raising more income tax and spending more on the poor. The country only collects 1.1 percent of GDP in personal income taxes compared to 1.8 percent of GDP in Latin America and 9.0 percent of GDP in the OECD. Moreover, one of the most cost-effective ways of reaching the poor and reducing inequality through the national budget is the Familias en Accion conditional cash transfer program. This program currently has a budget of 0.3 percent of GDP and 7.8 million beneficiaries. By comparison, the ‘pay as you go’ pension system, which costs 3.3 percent of GDP annually, and has 1.4 million (almost exclusively rich) beneficiaries. By taxing and spending more progressively, Colombia could potentially reduce inequality to levels similar to Chile or Costa Rica, even without raising taxation (though doing so could reduce inequality even further).
Undoubtedly, Colombia has a long way to go if it is to reach OECD levels of inequality. Not that this is an accession requirement, but it's a relevant benchmark. Experience shows that inequality is a very difficult social indicator to improve, so expectations should be managed accordingly. On the other hand, there is no doubt that the Government of Colombia has taken a big step in the right direction by attempting to tackle inequality via tax reform. For the millions of Colombians concerned about high inequality this represents a welcome development.
Author Lars Christian Moller is the World Bank's Senior Country Economist for Colombia
Published in Colombia Reports.
2. This is the strategy the Government to tackle unemployment
In the Colón theater, the Pact for growth and Employment Generation was signed. With this, the Government seeks to create more than one million jobs.
This is the strategy the Government to tackle unemployment This is the strategy of the Government to stop unemployment Photo: Presidency of the Republic
Increase exports and encourage national production, improving production chains is the government's strategy to generate new jobs , as Vice President Martha Lucía Ramírez said by presenting, together with President Iván Duque and the country's businessmen, the second Round of signing the 10 new pacts for growth and job creation.
On this occasion, the pharmaceutical, palm, fruit, milk, fishing and aquaculture, sugarcane, energy, mining, hydrocarbons and infrastructure sectors join the purpose of the Government of President Duque.
Vice President Ramírez said that “the government is to facilitate, to promote, to promote, not to offer more tax reforms tailored to a sector of a company, much less; we were clear, if the expectations were to look for changes in the tax legislation, we are not in the corresponding conversation. ”
"The expectations are how we can make a leap in growth, how to identify and solve the bottlenecks facing entrepreneurs, to increase investment, employment and exports ," the vice president added.
For his part, President Iván Duque highlighted “the entrepreneurial and entrepreneurial vocation of many Colombians who started with a small business and today travel the world with their products offering jobs, giving hope and generating optimism.”
The National Government agreed 327 actions, of which 63% are in charge of the public sector and 37% are assumed by the private company , after August 5, 2019, signed 12 agreements with the cocoa, meat, agroforestry industry sectors , tourism, BPO, Orange Economy, software, fashion, construction, motion industries, processed foods and chemicals.
In the event on behalf of the businessmen, the president of the National Trade Council, Sandra Forero, who gave full support to the initiative intervened, considering that “it is important to have the executive to reach consensus on the pillars of the business agenda, the national situation, economic growth, employment, formality and development of Colombia. ”
“We remain purposeful and focused on building trust in institutions and proposing strategies to improve the quality of life and well-being of Colombians. Pacts for growth and the generation of employment is the result of a coordinated exercise of great value in building trust and sets a path with a long-term agenda, ”added the union leader.
Finally, Forero expressed support for all actions that lead to institutional strengthening and invited all the actors who want to be part of the construction of the country and want to be agents of social change follow the path of legality and institutionality, we respect the protest social peace and all forms of expression that invite dialogue, debate and build.
3. Unemployment fell in December, but 2019 closed with an increase of 0.8 points
The indicator for all of 2019 was 10.5 percent, compared to 9.7 percent in 2018.
The unemployment rate has been growing since April 2018.
By: Economy and Business January 31, 2020, 09:19 pm
For the first time in 21 months unemployment fell last December, and stood at 9.5 percent compared to 9.7 percent in December 2018, closing a year in which the average of the 12 months rose to 10.5 percent , compared to the previous year.
In the last month of last year there were 73,000 less unemployed people in Colombia than in December 2018, and the unemployed, in turn, were 2,398,000 people, according to the National Administrative Department of Statistics ( Dane ).
In the first branch, the contributions of retail trade of food (food in general), beverages and tobacco in specialized establishments (2.1 percentage points ) were highlighted ) and the sale of prepared foods at the sales site (1.6 percentage points).
By gender and age ranges, this decrease was concentrated in men between the ages of 20 and 24 (142,000 people); Yin women, between 25 and 54 years old (129,000). However, there was an increase of 81,000 men employed between 25 and 54 years, and 41,000 women employed between 10 and 24 years.
For the economists of the Bancolombia Group, "the demand for work begins to show signs of improvement, due to a greater number of employed persons and the strengthening of the unemployment rate."
"We believe that the acceleration of the growth of the economy to rates closer to potential is becoming more palpable in demand for work," they say.
However, the reduction registered during December in unemployment, this was not enough to reduce the unemployment rate for the whole year, since the indicator for all of 2019 was 10.5 percent, compared to a 9.7 percent reported in 2018 . Jaime Alberto Cabal, president of Fenalco, said that for merchants, the fact that the unemployment rate remains up is not worrying for the whole year.
"It is important to record a downward trend in border cities such as Riohacha and Cúcuta as positive, but others that have a lower unemployment rate in 2018 are of concern but saw unemployment increase a year later," said the spokesperson national merchants, who insisted that this is one of the sectors that demand more labor in the country, but that due to the current situation and the barriers in labor costs it is necessary that a comprehensive labor reform be carried out.
For Luis Fernando Mejía, director of the Fedesarrollo Economic and Social Research Center, what the Dane report shows is that in the seasonally adjusted figurestwo months of reduction of the unemployment rate are completed, going from 10.7 in October to 10.2 percent in December 2019.
And he adds: “The unemployment rate for young people, while still high, was reduced to 16 percent in the last quarter, compared to 16.4 percent in the same quarter of 2018. All this indicates that if the economy manages to accelerate its pace towards growth of 3.5 percent this year, unemployment figures they should be reduced throughout 2020 ”.
Concerns are raised by others who had a lower unemployment rate in 2018 but saw unemployment rise a year later
Indicator by cities
By cities, according to the Dane, the highest unemployment rates in the October-December quarter were in Quibdó , with 18.9 percent; Ibagué, with 17.6 percent, and Valledupar, with 15.9 percent.
But Santa Marta, with a record of 12.9 percent, had the worst performance by increasing its unemployment rate by 4.9 percentage points compared to the same quarter of 2018.
On the other end are cities such as Cartagena, Barranquilla and Pereira , where the unemployment rate was below the national average.
Thus, according to the information provided this Friday by the Dane , in these urban centers that rate was 6.7; 8 and 8.3 percent, respectively.
ECONOMY AND BUSINESS
Higher growth causes rates to remain
The Banco de la República kept its reference interest rate unchanged, as higher economic growth and core inflation deter the monetary authority from joining other emerging markets in an increase in monetary stimulus.
The members of the board of directors of the Issuer voted to keep the rate at 4.25 percent , completing 21 consecutive months, said Juan José Echavarría, bank manager, at the end of the first meeting of 2020.
The International Monetary Fund indicated This week he expects the Colombian economy to grow 3.5 percent this year, driven by an expansive monetary policy, migration from Venezuela and the effect of tax reform.
The peso has weakened 4 percent this year, amid mass sales in emerging markets. That, combined with the minimum wage increase of 6 percent, can increase inflationary pressures in the coming months. Consumer prices rose 3.8 percent last year.
BLOOMBERG
4. Labor and unemployment
by Colombia Reports February 1, 2020
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Colombia has traditionally had of the highest unemployment rates in the hemisphere, which has worsened over the past few years and accelerated in 2019.
Unemployment rate
The most recent rise in unemployment followed a global commodity crash in 2014 commodity crisis that hit many economies around the world, and particularly South America. Unlike the rest of the region, Colombia has yet to recover from this crisis in regard to employment.
Annual unemployment rate
Source: World Bank
Colombia’s youth unemployment rate
Unemployment is particularly high among young Colombians younger than 24 years old. More than one in four young Colombians are unemployed, often disregarding their level of education.
Source: International Labor Organization
Unemployment among men and women
Unemployment among women in Colombia was 70% higher than among men in 2019. This is particular dramatic among young women under 28 whose unemployment rate rose to 25.2% last year.
Source: International Labor Organization
Urban vs rural unemployment
Colombia’s mass displacement and consequent urbanization in the 1990s and beginning of this century have caused a major disparity between unemployment in the country’s 13 largest cities and the countryside.
The current government’s economic policy to prioritize agro-industrial projects has boosted rural unemployment.
Source: DANE
Regional distribution of unemployment
Source: DANE
informal employment rate
Until 2019, the majority of Colombians who are employed are not formally employed and thus not receiving the social security benefits that come with formal employment. It is unclear what created last year’s statistical blip.
Until 2019, the majority of Colombians who are employed are not formally employed and thus not receiving the social security benefits that come with formal employment. It is unclear what created last year’s statistical blip.
Source: World Bank
Underemployment rate
Another major problems with Colombia’s labor market is underemployment. Colombia’s statistics agency considers you employed if you work one hour a week, which is clearly not a living wage.
Source: DANE
Colombia’s labor force
Colombia’s entire population, including minors and retirees, was supported by an economically active labor force that in 2019 consisted of half the population.
Source: DANE
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