Wages In Ecuador Are Below Pre-Pandemic Levels

The average income of the population in Ecuador is still lower than it was before the Covid-19 pandemic, despite the country's economic recovery and rise in the minimum wage, Primicias reported.

This evaluation was made in the International Labor Organization's (ILO) World Wage Report 2022-2023.

In real terms, the salaries that Ecuadorians receive in 2022 are 2% lower than in 2019, before the health emergency.

According to the report, this follows a significant decline in earnings of 15% in 2020 and 9% in 2021.

During 2022, salaries in Latin America fell by 1.7%.

According to the ILO, there are a number of reasons why Ecuadorians' average salaries cannot increase, but the stagnation of the creation of sufficient employment stands out.

62% of the country's population of working age is underemployed as a result, says the National Institute of Statistics and Censuses (INEC).

However, compared to levels before the Covid-19 outbreak, just 33.7% of people report enough employment.

Nearly 40% of people who were in the Economically Active Population (PEA) in 2019 held full-time jobs.

The lack of appropriate or full employment persists despite increases in domestic sales and exports from Ecuador.

The reason for this is the country's worsening business climate and the increase in the minimum wage, which force the productive sector to bear increased costs in the midst of the crisis (Cordes), according to a study by the Development Studies Corporation.

According to the OIT, Ecuadorian households also confront a deterioration in their purchasing power as a result of the rising cost of living, which further complicates their predicament.

In November 2022, in year-on-year terms, inflation reached 3.64%. According to the ILO, those from middle- and lower-class socioeconomic backgrounds are the ones who are most affected by inflation. This is a result of the fact that these populations devote a significant portion of their income to basic necessities, which see the biggest price rises.

In this context, the lack of employment and inflation have positioned themselves as two of the main concerns of Ecuadorians in 2022, maintains the market analysis firm Kantar.