Employment and development

LABOR OUTLOOK

Employment and development

During the last two decades, the Economically Active Population (EAP) grew 55% to reach 5.5 million people by 2015, which means more people able to work.
True sustainable development requires not only the pure and simple creation of wealth, but also a process of sustained development of the productive apparatus, intensification of external trade, diversification of production and the conquest of new markets. This results in the generation of new and diverse positions of formal employment, more productive and of higher quality, resulting in greater levels of social cohesion.
 
In Dominican Republic, the economic growth has been remarkable in the last 20 years. During the 90s of last century, this growth was around 6%, in the 2000s at a rate of 5%, and in the years 2011 and 2012 the average annual growth stood at 4%, while in 2015 it was 7%.
 
Given this reality, a report by the Center for International Development at Harvard University requested by the Ministry of Economy, Planning and Development (MEPYD), states the following: “The rate of growth in the last 10 years is not consistent with the vision of the country in the National Development Strategy. 75% of the jobs created (3 out of 4 jobs) have been informal, mostly in sectors of low productivity (other services, trade, transport); while high-productivity sectors (industries) have decreased in work posts “. According to the Ministry of Labor, in the end of January 2016, the number of jobs created amounted to 413.236 positions..

The reality of employment

Perhaps since the end of January 2016 to the end of the first quarter, around 30,000 to 35,000 new jobs could have been created, since the monthly average has been about 10,000 jobs posts.
 
In the Dominican labor market, specific aspects such as sustainability, quality and reliability of the jobs created and to be created are currently questioned.
 
Examinations are performed to define whether they are quality jobs, if they are sustainable and even if they are well paid. Credit actions initiated by the Government through Banca Solidarity, the Agricultural Development Fund (FEDA) and Fundación Reservas, have enabled the creation and strengthening of a little over 200,000 jobs, according to the figures provided by those entities.
 
A good proportion of these jobs correspond to the agricultural area and MSMEs, which are usually closely connected to the informal economy. Statistics provided by the Government shows that, via credits of Fundación Reservas, 61,000 jobs have been generated through surprise visits, another 100,000 related to financing of FEDA and via Banca Solidaria 52,000 jobs.

The challenge for the labor market

“Employment is important. However, employment must be analyzed from the sectoral point of view “, said economist Joel Santos, president of the Employers Confederation of the Dominican Republic (COPARDOM). Santos assumes the theory that the 400,000 jobs that have been created during the current government administration is an important figure, however, insufficient to reduce the unemployment rate in the country.
 
The business leader also proposes the measurement of the impact of wages in the economy and the labor market, “it should be understood that, to improve real wages we have to attack the unemployment problem, but the problem of unemployment is not attacked in a regular basis; it is attacked by sector. “
 
A recent report by CEPAL shows that between 2010 and 2014, the country unemployment´s fell at an average annual rate of 2.6%. The employment growth rate is lower than the economy´s indicator of expansion, measured by gross domestic product (GDP). The average annual growth of the last three years has been 7%.