Increase in public employment in Ñuble has prevented reaching a higher unemployment rate – La Discusión 2024-07-10 13:53:48

In Ñuble, the number of employed people reached 222,180 in the February-April quarter of 2024, according to the INE in its most recent measurement. The figure represents an increase of 3.0% compared to the same period last year, which, although it has been valued by the authorities, has not been a large enough increase to absorb the increase in people who have entered the labor market in search of a job. In fact, the unemployment rate in February-April reached 9.6%, getting closer and closer to double digits.

In this sense, if it were not for the sharp increase in public sector employment, the regional unemployment rate would have already exceeded 10%.

According to the INE survey, in Ñuble it is estimated that there are 14,760 people working in public administration, excluding the areas of health and education. The figure represents an increase of 21.5% compared to the February-April quarter of 2023.

Likewise, the health and social assistance sector, which includes public and private sector workers, added 17,800 employees, recording an increase of 30.5% compared to the same period in 2023. Meanwhile, the education sector, which also includes public and private workers, totaled 18,830, showing a year-on-year drop of 8.0%.

National data

Similarly, at the national level, the INE estimated that the number of people in employment increased by 3.7% in 12 months, although in public administration the increase was 13.1%.

According to the Quarterly Report on Human Resources for the Public Sector, prepared by the Budget Directorate (Dipres), as of March 2024, the total number of Central Government personnel reached 488,153 effective positions, made up of 82.3% personnel who perform permanent functions (staffing) and 17.7% personnel who perform temporary functions (non-staffing).

Compared to March 2023, the total staff of the Central Government showed an increase of 42,060 positions, that is, 9.4%, mainly explained by: health services, which contributed half of the increase; local education services; and the increase in the rest of the public institutions, mainly the Education, Public Works and Health ministries.

Growing participation

According to the director of Didepro, of the Municipality of Chillán, Renato Segura Domínguez, “in Ñuble, the share of public jobs in relation to the total number of employed people in the economy is greater than in relation to the country. In fact, while at the national level the values ​​for the February – April 2024 quarter reach 6.3%, in Ñuble they reach 6.6%”.

The professional said that “wage rigidity and barriers to labour mobility have a negative effect on the productivity of local workers who, faced with the unequal remuneration observed in the private sector, choose to migrate to regions with salary levels in line with their work productivity.”

Segura added that, “although the growing share of public employment in the total number of employed people is justified by a redistributive argument and greater social justice in household income, at the level of economic activity, the effects are uncertain. In an environment of insufficient private investment, as occurs in Ñuble, a low-quality labor market in terms of salaries and productivity is deepened.”

“Experience shows us that emergency public jobs are effective in dealing with recessionary economic cycles. But they are always short-term measures, awaiting greater economic activity that allows for the creation of new jobs in the private sector. However, this virtuous cycle has been broken by the persistence of a growing share of employed people from the public sector. While during the first three reports of employed people in 2023 the share of public jobs was around 5.5%, in 2024 the figure reaches 6.6%,” reflected the director of Didepro.

Unemployment buffer

For her part, Daniela Catalán Ramírez, an academic from the Faculty of Economics and Government at the Universidad San Sebastián, explained that the increase recorded in Ñuble in the last 12 months “might be associated with several causes, such as the implementation of new public policies, the increase in government programs or a response to growing administrative and social needs in the region. This growth might be interpreted as an effort by the government to strengthen administrative capacity and improve public services in the region. However, it might also suggest the existence of an excess of personnel, which can lead to duplication of functions and a decrease in overall productivity, which would have a negative impact on both the efficiency of public bodies and the availability of resources for other equally necessary actions.”

He also acknowledged that public employment is largely supporting the increase in employment in the region, which has prevented the region from reaching a unemployment rate.higher employment.

“In my opinion, it can be said that public employment has played a crucial role in the increase in employment in the Ñuble region. Without this boost from public employment, the overall employment rate might have been lower, and the region might have faced a higher unemployment rate. Public employment, therefore, has acted as an economic buffer, sustaining employment in a possibly adverse context for the private sector. However, this situation is potentially dangerous and detrimental to the economy, since with a reduced budget or if this weak economic dynamism persists, in the short term there might be pressure on the unemployment rate due to the possible destruction of public jobs,” argued the USS professor.

Asked regarding the possible negative effects of this increase, Catalán said that “significant growth in public employment can increase government spending, which may not be sustainable in the long term without a corresponding increase in tax revenues. Therefore,or therefore, the creation of jobs of this type is not sustainable over time.”

Along these lines, the academic stated that, “if a region’s economy becomes excessively dependent on public employment, it may be more vulnerable to changes in government policy. Reductions in public spending or public employment in the future may have significant negative effects on the local economy. In this economic environment where we have low investment, little dynamism and uncertainty, in addition to climate changes that can destroy private jobs, I believe that, if there is no private incentive, at any time it might result in higher local unemployment.”

Long-term sustainability

AIn this regard, Bernardo Vásquez González, director of the Ñuble Labor Observatory -executed by the Faculty of Business Sciences of the University of Bío-Bío and financed by the Undersecretary of Labor-, stated that, “the increase in public sector employment over the last 12 months reflects a clear sign of greater investment in public administration services. This investment not only strengthens government infrastructure, but also translates into an improvement in the provision of essential public services. The expansion of social programs and the expansion of health and welfare services are key factors that have driven this hiring.”

Along these lines, he stated that this increase “is associated with the fact that the installation process in the Ñuble region has not yet been completed.”

He also acknowledged that “public employment has played a crucial role in sustaining the increase in employment.” in the Ñuble region.”

“The public sector has not only generated a significant number of new jobs, but has also contributed to job stability in the region. In particular, the 21.6% increase in public administration employees has been fundamental in maintaining the unemployment rate at 9.6%. This growth has prevented the region from facing a higher unemployment rate, demonstrating that strengthening public services is vital for the economic and social stability of Ñuble,” he argued.

However, Vásquez warned that, “while increasing public sector employment offers significant benefits, such as reduced unemployment and job stability, it is essential to address these increases with a vision of long-term sustainability. Excessive and unplanned growth in public employment can lead to fiscal challenges, such as“chronic public sector deficits and the need for greater budgetary resources.”

AFurthermore, he stated that “a strong dependence on the public sector can limit economic diversification, making the region more vulnerable to changes in fiscal policy. Therefore, it is essential to balance the growth of public employment with the promotion of private initiatives and innovation, ensuring comprehensive and sustainable economic development for Ñuble.”