More Uruguayans on unemployment benefits in July than at any point since November 2002

The number of Uruguayan workers receiving unemployment benefits increased significantly during July 2013 reaching 38,586 people, a 19.8% increase over July 2012.

More workers received benefits this July than at any point since 2002, when 41,154 workers received benefits. There were also fewer workers eligible for Uruguay’s benefits system in 2002.

The amount of workers receiving benefits increased 12.8% during the twelve months since July 2012 according to data from the Banco de Previsión Social (BPS) reviewed by the Uruguayan newspaper El País. July’s number also represented an increase of 14% over this June’s benefits numbers.

Workers from Uruguay’s industrial manufacturing sector made up a significant part of the increase between June and July. 3,864 industrial manufacturing workers started collecting unemployment benefits in July, a 64% increase over June and 13.5% over 2012.

The sector with the second most workers collecting unemployed was construction with 8,534, although that number has been stable through  2013.

In Montevideo, 18,489 workers collected unemployment benefits compared to 20,097 in the rest of the country. After Montevideo, the cities with the highest number of workers on unemployment were Canelones with 5,919, Moldonado with 3,970, Colonia with 1,356 Paysandú with 1,097 and San Jose with 1,011.

This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El Pais. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

Uruguay News Brief: Unemployment rate drops as more workers abandon the job search

Unemployment in Uruguay dropped significantly this summer: by 6.6% in July and 5.5% in August. However, this decline is not due to an increase in employment (which in fact fell to its lowest level since October 2010) but stems from a decrease in the number of people looking for work according to data released by Uruguay’s National Statistics Institute (INE).

The INE is reporting that there were 92,000 Uruguayans who met the technical definition of unemployed in August. That is 20,600 less than in July. However, this was not a result of increased hiring. Instead, the decrease was due to the large number of Uruguayans who gave up on looking for work (thereby no longer meeting the technical definition of unemployed). The INE estimates that far more than 21,000 workers dropped out of the labor force during August.

Work force participation in Uruguay fell from 63.3% to 62.1% in August. The employment rate fell from 59.2% to 58.7% its lowest point since October of 2010.

In additon, to the drecrease in workforce particpation Uruguay lost 10,848 jobs in August.

Unemployment dropped more in Montevideo than in the interior. However, Montevideo saw little change in its workforce participation rate (64.4% to 64.5%). Workforce participation fell 2.3% in August.

This Uruguay Business Reports news article is a translation of a news story that appeared in the Uruguayan newspaper El País. The original Spanish language article is available here. Uruguay Business Reports translation by Donovan Carberry.

In Uruguay’s construction industry unions and construction companies agree to peace to avoid a flight of investors

The Chamber of the Eastern Construction Industry (CICE) and Single Union of Construction and Annexes (SUNCA) agreed to open a dialogue to avoid drastic measures like occupying work sites.

The two sides are concerned about the realities affecting the construction sector, which has been hurt by Uruguay’s tax sharing agreement with Argentina and the foreign exchange crisis in Argentina, and so have agreed to head off an eventual crisis between management and workers that would produce a “run by some investors”.

The agreement was reached during a working meeting that both parties attended Tuesday night, June 12 in the CICE’s headquarters. “Neither of the two sides want a run by investors. It was a very productive meeting because we agreed on all the points we touched on”, the president of the CICE Miguel Corbo told El País.

“There were more points of agreement than disagreement. Some projects are moving extremely slowly. There are other projects that rumors say will not begin. We are eagerly waiting to see if they are true or not. They can not delay continue to delay the start of projects that have been advertised for before the end of the year” said Corbo.

“We agreed to continue meeting to analyze the topic that concerns us all which is maintaining a source of work and the theme behind that is not letting construction fall. Basically we are talking about conflicts. Both parties want to tone down conflicts now before the end of the year. Not stopping [work] but searching for decisions before making a decision to stop. It was an exchange of opinions so that we both could see how the other side views the situation. We agreed on the topic of combating the informal economy” said Corbo.

 The businessman also pointed out that the peace agreement seeks to avoid an investor, invoking “a force majeure” clause on delayed project to avoid delivering units on time or in correct form to willing buyers”. A stoppage or a strike in the sector could be used as an excuse by some developers. “We don’t want some investor to use it for their own benefit” Corbo emphasized.

There already are some Argentinean investors that because of their anxiety and problems getting dollars, have warned of a possible stop in investments.

This Uruguay Business Reports news article is a translation of a newsstory by Marcelo Gallardo which appeared in the Uruguayan newspaper El Pais. The original spanish language article is available here. Uruguay Business Reports translation by Donovan Carberry.

News Brief: Unemployment in Uruguay increased 6% during April

Although new jobs were created in April they were not enough to compensate for the increase in Uruguayans seeking work.

Uruguayan unemployment increased in the month of April, a result of a larger increase in the people entering the labor market than new positions.

According to data released this Tuesday by the National Institute of Statistics (INE), the unemployment rate increased from 5.3% of the economically active population to 6%  April, the last measurement.

Uruguay Business Reports news brief by Donovan Carberry.

Tension in Uruguay between businesses and unions over extending collective bargaining agreements

Given international uncertainty, the Chamber of Industry  proposed signing only one year agreements in 2012. However, unions are seeking medium length agreements.

In response to the Chamber of Industry’s proposal to negotiate one year collective bargaining agreements and its call for caution given international financial uncertainty, the unions signaled that they don’t agree and that for now such short-term agreements are not necessary since national production has not been affected.

Given the “moment of uncertainty” perhaps agreements shouldn’t be signed “for very long terms”, Washington Burghi, the Chamber of Industry president, told El País this Wednesday. He advised that the best thing would be making one year agreements.

“If we extend a lot, either of the two sides can have a false step and throw off the balance. This would not be good. If we make the terms smaller, perhaps we can bring ourselves closer. We are calling for prudence because the uncertainty is great” said Burghi.

In response to this the director of the PIT-CNT, Marcelo Abdala told El Observador that short-term agreements are “inefficient” because as soon as they finish negotiating one, they have to begin discussing the next. “Constructing collective bargaining agreements is a complicated and costly process, for that reason, its rational to arrive at medium-term agreements (two and half years)”, he said. He added that starting several years ago the agreements included safeguard clauses that allow modifications in the case the economic situation changes. The clauses “can trigger a renegotiation of the agreement”, for the businesses as well as the unions. “They guarentee that the parties can sign longer term agreements and if need be return to negociations” added Abdala.

He insisted that he still doesn’t see the needfor such short-term agreements when Uruguay’s GDP growth still “has not been questioned by the world economic crisis”.

Nevertheless the union leader said that Burghi’s proposal is not “a problem because the agreement’s duration depends on the specific agreement”. During the negotiation the length of the agreement is one of the aspects discussed and in some cases workers themselves propose shorter agreements. Regardless, he emphasized that in principle of the unions are inclined to negotiate medium term agreements.

For its part, the government intends to sign agreements that will be in effect until 2015, when the government of José Mujica ends.

In June, negotiations begin in the private healthcare sector and for private banks. In January, the rounds of negotiations begin for the rest of the sectors informed El País.

This Uruguay Business Reports news story is a translation of a news article which appeared in El Observador. The original news story is available here. Uruguay Business Reports translation by Donovan Carberry.

En junio comienzan a negociar el sector de la salud privada y la banca privada. En enero comenzará la ronda para el resto de los sectores, informó El País.