The pandemic has deteriorated the labor market in Colombia; women and youth are two of the populations most affected by unemployment, and action is urgently required. Here we offer an alternative to reverse this economic crisis.
Unemployment in Colombia reflects a deep social crisis. The unemployment rate is 17 percent nationally and exceeds 20 percent in 20 cities. Women and youth have unemployment rates of 22 and 28 percent, respectively. Cities like Neiva, Ibagué, Popayán, Cúcuta and Florencia had rates of more than 30 percent. This tragedy affects millions of Colombians and their families, who today are without decent employment, without stable income and without opportunities. These conditions translate into more poverty, greater inequality, and a massive destruction of social and human capital.
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Unlike countries where the pandemic meant the end of an episode of employment expansion, in Colombia the deterioration of the labor market was consolidated. We have unemployment rates consistently above 10 percent. Furthermore, let us remember that close to half of the workers are informal and that same proportion earn less than the minimum wage.
We propose an emergency employment program guided by the following criteria: (I) an aggressive response to the dramatic effect of the current crisis, (II) an effective institutional articulation of the national, regional and local levels, and (III) the care of critical elements such as gender inequality and youth unemployment. This program builds foundations for the development of a long-term pragmatic strategy that integrates: productive development policies, recognition of regional diversity and capabilities, new labor and pension institutional frameworks, and an economy that gives construction a leading role. of a knowledge society.
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The program has two lines of action. The main one is the implementation of emergency employment projects.
1.4 million new jobs can be created through the development of 10,000 public emergency employment projects in two years.
A central characteristic of the program is the leadership of the municipalities and departments, which have explicit responsibilities in the design, articulation and execution, and the National Government supports the work of the local authorities.
The priorities are: (I) to generate formal employment of unskilled labor; (II) create jobs for women, young people, Afro and indigenous population. The projects must be developed in activities that promote regional development, the country’s food security, social inclusion, environmental sustainability and, in general, the construction of regional capacities for social transformation. Some examples are:
– Social and community services (public health, protection of children and the elderly or psychosocial care).
– Construction, repair and maintenance of local infrastructure such as schools, health centers, public spaces, parks, sports and cultural venues.
– Construction and repair of housing in neighborhood projects.
– Repair and improvement of tertiary roads.
– Programs with rural impact related to the expansion of local and community crops.
– Reforestation and protection of water sources, forest protection, ecotourism support and ecosystem restoration.
– Academic training programs that improve the population’s job qualifications.
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Each project has a budget of up to 3,000 million pesos and a maximum execution period of one year. At least 80 percent of the budget is allocated to salaries. These are high-intensity projects that can individually create 140 jobs: 100 full-time jobs (minimum wage), 20 part-time jobs (half minimum wage) and 20 jobs for young professionals (1.5 minimum wages).
The implementation of the 10,000 emergency employment projects can create one million jobs (minimum wage), 200,000 jobs for young professionals and 200,000 part-time jobs.
The first step in the program consists of allocating resources to each of the 32 departments and 23 cities and metropolitan areas. The allocation is made based on the current size of your unemployed population.
Once the resources have been allocated, the governorates open a public call for the municipalities to present their projects, designed at the municipal level and with a formulation that must meet the objectives of the program and the technical characteristics of the projects.
It is crucial to note that the design of the projects is done through participatory emergency budgets, which ensure the active and responsible participation of the communities. They are the ones who best know their needs and those who can ensure the transparent management of resources. These participatory budgets have the administrative support of the governments and the National Planning Department (DNP), on methodological issues and financial and accounting structuring.
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Likewise, the involvement of young professionals in this process is promoted. This allows them to put their educational training at the service of their municipalities and departments and to begin to participate early in the public management tasks that their communities need.
The selection of bankable projects will then be in charge of the departmental governments. These will classify the projects presented by the municipalities according to the prioritization criteria. The government must make the selection completely public and with the support of a technical committee in which universities, chambers of commerce and citizen associations participate, which help to guarantee transparency.
Transparency throughout this process is essential: the governorates will permanently monitor the execution with the support of the DNP. All projects must integrate an anti-corruption component with different types of controls and mechanisms for sharing information about the program. The management reports must be public and a platform must be created in which each community and any citizen can follow up on the projects of any municipality in the country. Good community management increases the effectiveness and social impact of projects and takes space away from the corrupt.
The design of the projects is done through participatory emergency budgets, which ensure the active and responsible participation of the communities
This proposal includes a second line of action, to generate employment in the private sector. This line consists of subsidies and credits assigned to companies, through a competitive call that prioritizes: (I) micro and SMEs, (II) the re-employment of workers who lost their job between March and September 2020 and (III ) the recruitment of women and youth. This line can support the generation of nearly two million jobs, and can optimize and target support to workers and companies most affected by job losses. We know, for example, that companies with fewer than 10 employees accounted for almost 70 percent of the job losses in August.
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The program is ambitious, and it has to be so to rise to the challenge that Colombian society faces. The maximum value for its two lines of action is 50 billion pesos (5 percent of GDP), with two phases of 25 billion pesos each.
The public resources of the ‘Emergency Employment Now’ program would be covered by a direct acquisition of TES from the Government by the Banco de la República or through international loans. Right now, the macroeconomic priority and the best investment is employment. Current conditions allow the activation of less conventional instruments of monetary and fiscal policy.
In the medium term, a tax policy based on more progressive taxes, elimination of inefficient tax exemptions, and capacity building to counter tax evasion and avoidance will have to be processed in the Congress of the Republic.
In no way can the financing of the emergency employment program result from sacrifices of social spending that is already underway.
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Sensible and reliable ideas
The ‘Emergency Employment Now’ program (www.compromisociudadano.com) can reverse the effects of the unemployment crisis and initiate longer-term plans to combat poverty and inequality with decent employment.
This program helps to regain national confidence, in the midst of the malaise that Colombia is experiencing, through sensible ideas and participatory mechanisms in the citizen construction of projects.
In this task we call on young people, seriously affected by the crisis; they are the first line of layoffs from companies; Thousands of young professionals cannot find a job in which they can develop their skills (they remain in the informal sector and in activities for which they were not prepared).
The program that we are presenting today is tuned to the ‘Students First’ program, which we presented three months ago and that starts from the premise that the best job for a young person is studying.
Finally, with this program we are taking an important step in building local capacities for economic reactivation and the recovery of the social fabric in Colombia. We can build a future with hope.
SERGIO FAJARDO, GONZALO HERNÁNDEZ, JOSÉ ANTONIO OCAMPO, MAURICIO OLIVERA, MARIANA FAJARDO AND GERMÁN BARRAGÁN ** Sergio Fajardo, professor and politician of Compromiso Ciudadano. Gonzalo Hernandez, Associate Professor of Economics and Director of Research at the Javeriana University. José Antonio Ocampo, professor at Columbia University. Mauricio Olivera, former Vice Minister of Employment and Pensions. Mariana Fajardo, biologist, Citizen Commitment. Germán Barragan, Manager of Education and Employment of the Corona Foundation