By Mario Valencia, EL ESPECTADOR, July 2, 2021
(Translated by Eunice Gibson, CSN Volunteer Translator)
The main problem that this country is suffering is the need to generate jobs. Believing in the reactivation through mining is opting for economic and social collapse. How can we reactivate the economy, but with growth in the labor market?
The petroleum lottery
It appears that an essential part of re-opening would be based on the mining/energy sector, one more time. In the last three decades, so-called macroeconomic stability has passed from the lottery to the petroleum lottery: the bonanzas of the decades of 1990 and 2000 will be replicated on a mini scale in 2021, which could rescue finances in the short term.
If the oil price prospects are maintained in 2021, the government’s treasury will gain an additional $3.8 billion pesos (a little over USD $1 million) which had not been expected at first. The same thing is happening on the coal side. Coal production increased 52% in the first quarter of 2021, with average prices of USD $96 per ton, and Glencore just sent a confident message with its acquisitions of BHP and Anglo American for USD $588 million.
The mining locomotive doesn’t stop; they think it’s salvation, at least that’s what the responsible Minister said, insisting that, “the mining sector is a fundamental piece for sustainable reactivation in Colombia.”
During the pandemic, the Colombian government has not shown even minimal capacity for reflection on the structural causes that have impeded better management of health agencies, as not one single structural reform of the economy has been implemented, or even considered. What they expect is that the recovery of the market for natural resources will reach this country, without any effort to establish serious policies for productive economic growth.
Create jobs, but, doing what?
The main problem that this country suffers is the need to generate employment. Believing in reactivation based on mining is betting on an economic and social collapse, because it has never generated more than 300,000 jobs in this country and it never will; besides that, neither is it a sector joined with other activities that would be capable of creating work force demand.
The economic deceleration that began years before the pandemic has had a powerful effect on the condition of the labor market. Between 2016 and 2019, the unemployment rate grew 1.3 percentage points, the jobs rate fell 1.7 points, but the working age population continued to grow at a rate of 0.2%.
The ambition of many industrialized countries to be able to rely on a work force available for production is dramatically unrealized in Colombia. The more people entering the labor market, the more inactivity increases. That panorama has gotten worse with the pandemic, and the possible solutions from the official point of view are disheartening.
For the March to May quarter of 2021, there were 1,465,000 more people of working age who were inactive than there had been in the same period of 2019; and 73% of those that were added to this category are doing domestic work and 93.2% are women. But it isn’t only gender discrimination, but rather the inefficiencies in dealing with the obstacles to connecting young people to the labor market. Youth are the population with the highest rate of unemployment.
Add to this two necessities that must be resolved. First: unemployment of women. They are the majority of the population; they have better academic preparation than the men, but the way that the economic system has developed relegates the majority of women to unpaid housework or to very precarious activities. On average, in 2019 there were twenty million women of working age; 10.6 million of them were inactive, 5.5 million were doing unpaid work, and 1.4 million were unemployed. Of the eight million that were employed, 52% were working in domestic employment, on their own, or doing unpaid work.
The situation got worse with the pandemic, as in May of 2021 there were 1,074,000 more people doing domestic work than in the same period of 2019. That considerably increased the probability of poverty, which is higher in female heads of household younger than 25 years of age, lacking education, unemployed, and without social security. Besides that, 76.9% of homes with three or more children were living in poverty.
Second: The “nini” youth. In 2019, on average, there were 12.3 million young people of working age (14-28), of whom 2.7 million were not working and were not going to school. Of the 5.7 million who were working, 41% were domestic workers, on their own, or unpaid. For the February to April quarter of 2021, there were 486,000 more “nini” youth. The fact that 53% of the youth population of working age neither worked nor attended school is the most consistent evidence of the failure of an economic policy that is oriented to extractivism and to financial parasitism.
The solution requires the government to make more funds available to finance public and collective programs for child care, for training in productive activities that would make it possible for women to leave housework and work at jobs that are more stable and better paid. Along with that, funds for educational programs and free job training for young people, with a prospect for connection with formal employment.
There have to be reforms.
Mining is not the answer to these problems. Mining activity consists in importation of heavy equipment and tools, extracting the resource with very little labor, and loading it onto a ship destined to the developed world, without any conversion or processing.
The most logical thing to do would be to take the revenue that the government earns from mining activity and invest it in training and direct subsidies to the payrolls of processing companies that are working intensively to build the work force. We ought to provide a monetary stimulus for the creation of processing jobs in farming and manufacturing, but also in services that are bound together with those. For example, the marketing of products made or assembled in this country should also receive the subsidy, but the one that imports finished products, no.
This proposal is founded on admitting that keeping youth and woman excluded from economic advancement is nonsense. It’s the best and only path to useful reforms for the reactivation.