Guatemala

The global economic crisis increased from 5.3% to 5.9% unemployment rate in Guatemala, where 75% of the economically active population (PEA) is found in the informal economy. The PEA in Guatemala amounts to 4.9 million people, however, 75% of them are in the informal sector, that is, only one million have a formal employment in this Central American country. The informal economy affects poverty levels in the country, affecting more than 50% of the 13 million inhabitants, since the entry of a formal worker is about $250 per month, while a casual worker is $120. One of the causes of unemployment is that many companies do not want people over 35 years, considered unproductive, as a young man he can maintain a lower salary than a person with experience. Approximately 3 million Guatemalans are underemployed, that is, for every 100 economically active persons, about 65 job seekers, because they want to do more hours or other conditions.

Possible Solutions

There are many possible solutions to generate and produce new jobs; it’s not too difficult to structure a way to push jobs. Proposals:

 Foreign Investments: is an alternative, which many countries are inclined to develop, since foreign firms inject capital in the short term, the state doesn’t spend a penny and creates a vision of social welfare, which is very positive for a ruler who must face elections in very short periods.

 An incentive to industries and domestic firms is to reduce taxes on domestic companies to invest and create more new jobs in this way the unemployment rate will be reduced.

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