ASUNCION – Paraguay must maintain a 3.7 percent economic growth until the year 2030 in order to meet the demand for jobs by its future labor force, which is estimated to number almost 1 million workers by that year, according to a World Bank report presented Monday in Asuncion.
Data in the report “Paraguay Jobs Diagnostic: The Dynamic Transformation of Employment” show that an average of 66,000 jobs must therefore be created yearly, though at present that number is being surpassed with 72,000 net jobs being created every year.
To maintain that rhythm, the economy will have to continue growing at an average of 3.7 percent per year.
The lead economist of the Jobs Cross-Cutting Solutions Area of the World Bank and writer of the report, Elizabeth Ruppert Bulmer, said during the presentation that “the economy has the capacity to do it, but public and private policies are needed.”
Paraguay’s labor structure has changed recently, with more jobs being created in the services sector than in agriculture, stimulated largely by the private sector and the arrival of large multinationals, according to the report.
Between 2001 and 2015, 40 percent of new jobs were created in retail, followed by government services with 20 percent, manufacturing with 13 percent, finance, real estate and other services, each with about 10 percent, and construction with 8 percent.
The study also notes the improvement in labor productivity in most sectors, with an average of 2.3 percent per year.
Nonetheless, one of the challenges facing the nation in recent years, and which still needs attending to, is the formalizing of employment.
The World Bank understands as formal employment that of salaried workers who contribute to Social Security, as well as business owners and self-employed workers with registered companies.
The creation of formal employment increased by 68 percent between 2008 and 2015, up to 372,201 jobs, while the number of informal workers grew by 32 percent to 178,583.
Informal jobs declined in agriculture by 8 percent, and in transport and communications by 1 percent.
Wages have improved as well, though as Ruppert said, “not all incomes have improved equally.”
She said “women, young people, those less qualified and country folk are the ones who have less chance of finding formal work.”
Wage inequality is also related to geography, since wages are lower the farther workers are from Asuncion, the nation’s capital.